FTSE 250 movers: Weir whacked after warning, regulatory hopes lift Indivior
By Conor Coyle
Date: Tuesday 31 Oct 2017
(ShareCast News) - The FTSE 250 index was flat in afternoon trading on Tuesday as London's mid-cap companies continued to report quarterly results on the last day of October.
Shares in Weir Group were the biggest fallers during the session after the engineer sounded a warning on full year profits during its third-quarter earnings release due to higher costs in its minerals arm.
With Weir citing additional incremental investment and further costs due to reconfiguring operational capacity as volumes increase, broker Peel Hunt said it viewed these cost as "a fact of life" rather than something more structural "and therefore it has no bearing on how we view the stock going forward". Analysts upped their target price to 2,300p from 2,100p and said a fall the shares was "a buying opportunity given the momentum in the order book".
Following behind was Royal Mail, after it was hit by a downgrade from Credit Suisse, which lowered its recommendation to 'underperform'. The Swiss bank said it expects worsening letter revenue trends and a costly labour deal to render 2018 earnings unsustainable, and, cutting its estimates for the next three financial years, said it does not expect free cash flow to cover dividends from 2021.
Also hit by a downgrade from a broker was Rotork, after Goldman Sachs said recent outperformance had limited the engineer's upside and moved to 'neutral' from 'buy' on the stock. Goldman analysts recommended investors choose Weir or Smiths Group instead.
Pharmaceutical company Indivior was lifted by expectations that the US Food & Drug Administration is about to approve a depot-based injection to treat opioid use disorder. The firm charged over 7% higher on Tuesday afternoon.
Food delivery firm Just Eat was gobbled up by investors after it increased its full-year revenue guidance off the back of solid numbers in the third-quarter. Given the strength of its SkipTheDishes arm, management hiked revenue guidance for the full year to £515-530m from £500-£515m, keeping its forecast for adjusted operating profits of £157-163m.
Wizz Air was lifted as rival budget airline Ryanair issued a bullish trading update.
Having fallen to 12-month lows in September, insurer Lancashire continued to climb ahead of its trading update on Thursday. UBS forecast a "messy quarter driven by natural catastrophe losses", with the company having estimated $106-212m of losses and analysts at the bank assuming the mid-point, but expecting "commentary around the outlook is likely to be bullish."
FTSE 250 - Risers
Indivior (INDV) 370.10p 7.18%
Just Eat (JE.) 775.00p 4.73%
Lancashire Holdings Limited (LRE) 754.00p 4.00%
Wizz Air Holdings (WIZZ) 3,283.00p 3.93%
IWG (IWG) 216.20p 3.89%
Inmarsat (ISAT) 615.50p 3.53%
Provident Financial (PFG) 930.00p 3.51%
Hiscox Limited (DI) (HSX) 1,440.00p 2.49%
Capital & Counties Properties (CAPC) 265.30p 2.43%
Stagecoach Group (SGC) 167.60p 2.38%
FTSE 250 - Fallers
Weir Group (WEIR) 1,944.00p -7.25%
Royal Mail (RMG) 372.50p -4.41%
Hochschild Mining (HOC) 220.40p -3.84%
Rotork (ROR) 263.40p -3.27%
Drax Group (DRX) 275.40p -3.10%
Genus (GNS) 2,360.00p -2.88%
Centamin (DI) (CEY) 138.90p -2.59%
IP Group (IPO) 144.80p -2.56%
Renishaw (RSW) 4,906.00p -2.27%
Tullow Oil (TLW) 181.70p -2.21%
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