FTSE 100 movers: IAG flies high but British Land hit by downgrade
London's FTSE 100 was up 0.4% at 7,233.40 in afternoon trade on Friday as investors eyed more Sino-US trade talks after US President trump lifted tariffs on $200bn of Chinese goods.
British Airways and Iberia parent International Consolidated Airlines was a high flier even as it said that profit more than halved in the first quarter as it was buffeted by rising fuel costs and stiff competition.
George Salmon, equity analyst at Hargreaves Lansdown, said: "It’s not every day you’ll see a company’s profits fall so sharply but the shares still rise. But when your competitors have slipped into a loss, it’s perhaps not a surprise.
"The main factor holding back profits is increased fuel prices, which have been compounded by a rise in the US dollar. The group is confident it can offset these macro headwinds with cost efficiencies elsewhere, such that profits come in level with last year. That would be an impressive achievement in the current climate."
On the downside, British Land was under the cosh after Barclays cut its stance on the stock to 'underweight' from 'equalweight' ahead of the company's full-year results next week.
The bank also cut its price target on British Land by 14% to 500p. In the same note, it trimmed its price target for Landsec by 4% to 755p while retaining its 'underweight' rating on the stock.
Barclays said that while it was taking a slightly less negative view on the London office market given the observed underlying resilience, it expects further, and accelerated, weakness in the retail portfolios to put further pressure on both earnings and NAV estimates.
"We now expect flat earnings growth for British Land and Landsec going forward as positive contributions from the development pipeline are offset with a more bearish outlook on rental growth for retail," it said.
Auto Trader was knocked lower by a downgrade to ‘neutral’ from ‘buy’ at Citi, as it said the risk/reward is now more balanced.
The bank, which lifted its price target on the stock to 580p from 494p, noted that the shares have performed very strongly in the last 15 months and are now trading at a premium to peers, and notably, recent takeout multiples in the space.
FTSE 100 - Risers
Ferguson (FERG) 5,539.00p 3.34%
International Consolidated Airlines Group SA (CDI) (IAG) 500.20p 2.23%
Intertek Group (ITRK) 5,116.00p 1.83%
Rentokil Initial (RTO) 386.10p 1.82%
Morrison (Wm) Supermarkets (MRW) 215.30p 1.70%
RSA Insurance Group (RSA) 555.20p 1.61%
Burberry Group (BRBY) 1,930.00p 1.61%
Ashtead Group (AHT) 2,035.00p 1.50%
Hargreaves Lansdown (HL.) 2,307.00p 1.41%
Mondi (MNDI) 1,661.00p 1.40%
FTSE 100 - Fallers
British Land Company (BLND) 565.20p -3.22%
Bunzl (BNZL) 2,143.00p -2.15%
Land Securities Group (LAND) 897.40p -1.69%
British American Tobacco (BATS) 2,850.00p -1.23%
Imperial Brands (IMB) 2,205.00p -1.01%
AstraZeneca (AZN) 5,768.00p -1.00%
Smurfit Kappa Group (SKG) 2,229.00p -0.98%
Fresnillo (FRES) 721.00p -0.85%
Auto Trader Group (AUTO) 576.00p -0.76%
Centrica (CNA) 93.52p -0.72%