FTSE 100 movers: Micro Focus lifted by GS upgrade; miners retreat
By Michele Maatouk
Date: Wednesday 14 Nov 2018
(Sharecast News) - London's FTSE 100 was up 0.2% to 7,065.70 in afternoon trade on Wednesday as investors awaited the outcome of Theresa May's Cabinet meeting.
Micro Focus International was the standout gainer as Goldman Sachs upped the stock to 'buy' from 'neutral' and lifted the price target to 1,700p from 1,300p, saying the risk/reward is now skewed to the upside.
GS said that following a period of significant M&A execution risks which led to turbulent sales growth in FY18, the dust is starting to settle at Micro Focus.
"We see early indications that the business is stabilising after an in-line trading update implying that revenue declines are not deteriorating any further which we view as a positive," it said.
GVC Holdings and Paddy Power advanced even as it emerged that the cut to the maximum bet on fixed-odds betting terminals will be implemented from April rather than October 2019.
Elsewhere, energy firm SSE advanced despite posting a 41% drop in interim profit and expressing doubts over the completion of its merger with Npower, as it announced the creation of a renewable energy business.
Global technology company Smiths Group rallied after saying it expects to meet full year expectations and announcing plans to separate Smiths Medical from the group and concentrate on growing as an industrial technology group.
Russ Mould, investment director at AJ Bell, said: "It feels like the market has been speculating about a break-up of industrial conglomerate Smiths Group for more than decade and we're finally seeing some traction.
"The decision to separate out the medical division shouldn't come as a surprise, it didn't really fit with the rest of the engineering group whose interests range from airport security scanners to components for the aerospace and construction industries."
On the downside, Rio Tinto was hit by a downgrade to 'sell' from 'hold' by Liberum, which said iron ore indicators are looking "shaky" and steel prices are faltering.
More generally, miners were on the back foot as copper prices fell following disappointing Chinese loan growth and retail sales data.
Ferguson, formerly Wolseley, was under the cosh after a downgrade to 'neutral' at Bank of America Merrill Lynch.
FTSE 100 - Risers
Micro Focus International (MCRO) 1,417.00p 8.42%
GVC Holdings (GVC) 836.50p 7.59%
Paddy Power Betfair (PPB) 7,140.00p 7.05%
SSE (SSE) 1,204.50p 6.45%
Smiths Group (SMIN) 1,397.50p 6.27%
ITV (ITV) 159.55p 5.98%
BT Group (BT.A) 259.85p 2.99%
Reckitt Benckiser Group (RB.) 6,421.00p 2.97%
Melrose Industries (MRO) 182.35p 2.96%
Royal Mail (RMG) 349.80p 2.88%
FTSE 100 - Fallers
Rio Tinto (RIO) 3,720.50p -3.26%
Evraz (EVR) 520.20p -3.24%
Ferguson (FERG) 5,061.00p -2.43%
Antofagasta (ANTO) 752.40p -2.36%
BHP Billiton (BLT) 1,546.20p -2.29%
Experian (EXPN) 1,836.50p -1.97%
DCC (DCC) 6,145.00p -1.92%
London Stock Exchange Group (LSE) 4,133.00p -1.81%
Wood Group (John) (WG.) 638.60p -1.78%
Ashtead Group (AHT) 1,910.34p -1.76%
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