Market report: Tuesday close
MARKS & SPENCER moved 11p higher to 598p today after Goldman Sachs became the latest broker to throw its weight behind the resurgent retail giant.
After upgrading its earnings forecasts, Goldman has added M&S to its strong-buy list, with a 691p price target. It says first-quarter sales figures next week should show 10% like-for-like sales growth for general merchandise and 10.5% for food.
The World Cup and rising demand for healthy and premium foods are expected to have helped, and better clothing ranges should enable M&S to continue building market share, the broker says. Yesterday, ING raised earnings forecasts for M&S and reiterated its buy rating.
Despite M&S's advance and a 78-point rise in the Dow yesterday, the FTSE 100 closed 0.9 points lower at 5883.5. With Wall Street closed for Independence Day today, there will be no fresh market signals from the US.
Index heavyweight Vodafone was up 1¼p at 119p after Deutsche Bank switched its stance on the shares to buy from hold on the grounds that the current valuation provides 'material upside. It has upped its target by 2p to 130p.
AstraZeneca fell 45p to 3219p, after ING cut its rating on the drugs company in the wake of the recent share-price rally.
Payment card issuer Retail Decisions up 25p at 176p, said it has received an indicative takeover approach - one of several unsolicited approaches.
Insurance broker Jardine Lloyd Thompson, 6½p lower at 407p, confirmed that it is in 'early-stage' discussions that could lead to an offer for Heath Lambert, another insurer.
Drax advanced 7½p to 835½p after Merrill Lynch said its betterthanexpected first special dividend of up to 80p helps set the scene for strong continuing cash returns - in excess of 20%. The broker has retained its buy recommendation, with a price objective of 875p.
Share dealings started in Nationwide Accident Repair Services, which operates 69 UK repair centres for insurers and fleet operators. The company placed 15.8m shares - 35% of the firm - at 111p a share, valuing it at £50m.
Nationwide says the crash-repair market in the UK is highly fragmented and claims is well-placed to take part in its consolidation. The shares were at 116½p.
Transport company Go-Ahead, off 22p at 1952p, said it has traded in line with its own expectations for the year to 1 July, but admitted that wage inflation and increased fuel costs have hit its deregulated bus business. Nevertheless Oriel Securities has retained its add stance because of strong cashflow and the company's attractions to trade and private-equity buyers.
IT services company CODASciSys, off 3¼p at 567p, is to demerge, with one share in the company morphing into one share of SciSys and three shares of Coda, whose retail and leisure clients include JJB Sports and Louvre Hotels.
CODASciSys shareholders will receive a 25p special dividend, for a total payout of £6.4m. Teather & Greenwood says a sum-of-parts valuation for the divisions as independent entities will have a combined worth of 630p per current share.
South China Resources leapt 3¼p to 25p after the miner was granted business and exploration licences for its flagship China copper project.
Dim sum restaurants group Tasty floated on Aim after a placing at 52p a share, valuing it at nearly £12m. The company, trading at 81½p, has three London-based restaurants but will use the proceeds to open at least six more.
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