London-listed airlines have again made the list of notable UK share prices, suffering in the wake of Lufthansa’s (FRA:LHA) profit warning earlier in the week. Broader market sentiment meanwhile remains subdued, with investors staying on the sidelines in anticipation of the Federal Reserve policy decision which is due out later today, after the UK market closes.
London-listed airlines under pressure
British Airways and Iberia parent International Consolidated Airlines Group (LON:IAG) has tumbled to the bottom of the blue-chip leaderboard this Wednesday, pressured by this week’s profit warning at German peer Lufthansa.
“We are increasingly cautious towards European airlines […] expect many will follow Lufthansa’s profit warning,” HSBC analysts wrote, as quoted by Reuters, further forecasting weakness in long haul and corporate travel demand in Europe. IAG’s shares have given up nearly four percent in early afternoon trade, as compared with about a 0.3-percent fall in the benchmark FTSE 100 index. Low-cost carriers easyJet (LON:EZJ), Ryanair (LON:RYA) and Wizz Air (LON:WIZZ) are all down by between one percent and three percent each.
Elsewhere in the travel sector Saga (LON:SAGA) is again under the cosh after announcing in an annual general meeting statement that while trading for the period from February 1 to June 18 had been broadly in line with expectations, the company’s Tour Operations business was “being impacted by current political uncertainties”. The news marks another blow for the cruises-to-insurance group for the over-50s which booked a £310-million charge this year, and trimmed its payout to shareholders. Saga’s share price has given up more than 13 percent this Wednesday, weighing on the mid-cap FTSE 250 index which is little changed with a 0.04-percent fall.
Whitbread (LON:WTB) has reversed morning losses, with investors digesting its first-quarter update. The company announced that its UK total accommodation sales had declined 1.5 percent in the first quarter of its financial year, due to weak trading conditions.
“Whilst we are cautious about short-term market conditions, we are confident in our plans given the significant growth opportunities in the UK and internationally,” the company’s chief executive Alison Brittain commented in a statement. Whitbread’s shares are up nearly 0.8 percent intraday.
Berkeley Group (LON:BKG) is trading in the red after reporting a 5.9-percent fall in operating profit for the financial year ended April 30. The blue-chip housebuilder’s shares are down by about one percent in early afternoon trade.
Just Eat (LON:JE) has been another notable FTSE 100 faller as UBS trimmed its price target on the online food delivery service from ‘buy’ to ‘neutral’. Proactive Investors quoted the broker as commenting hat, after leveraging five data sets from the UBS Evidence Lab, many of the supportive signals they had expected did not come through.
“Three surprises drive our more cautious view: negative trends for JE UK brand perception, a re-acceleration of UK share loss, and worrying search trends in many markets,” the broker pointed out, adding that its main concern was that the company was “not investing enough at a time when capital is flowing into the industry and customer acquisition costs are rising”. Just Eat’s shares are changing hands about two percent lower.
Mulberry (LON:MUL) is rallying despite revealing that it had made a loss before tax of £5 million for the 53 weeks ended March 30, having delivered a profit of £6.9 million in the prior-year period. The company, however, maintained its payout to shareholders and said that it anticipates that its International and Digital sales will continue to grow. Mulberry’s shares are up by nearly three percent.
UK share prices to watch tomorrow
In London-listed companies reports, investors will eye Dixons Carphone’s (LON:DC) annual results. IG reports that the company is expected to report pre-tax profit of £299 million, down from £382 million a year earlier, while revenue is expected to have climbed slightly higher, to to £10.55 billion from £10.53 billion in the 2018 financial year.
“Dixons Carphone currently trades at 6.2 times earnings, which is well below the five-year average of 10.2. However, the valuation has barely moved over the past two years, with a brief rebound in 2018 seeing it hit 10 times earnings,” IG’s chief market analyst Chris Beauchamp commented in a note last week, adding that a yield of 8.1 percent would “be tempting for investors, but such a high level should be viewed with caution, since management might be tempted to cut the payout in order to save cash”.
Blue-chip UK share prices set to come under pressure tomorrow include those of Compass Group (LON:CPG), Land Securities (LON:LAND) and United Utilities (LON:UU), with the companies going ex-dividend.