ITV (LON:ITV) and Imperial Brands (LON:IMB) are among today’s UK share prices to watch, having fallen to the bottom of the FTSE 100 leaderboard with their respective results disappointing the market. Investors also have a lot to look forward to tomorrow, with BT Group (LON:BT.A) and Wm Morrison Supermarkets (LON:MRW) set to continue the ongoing earnings season.
ITV and Imperial Brands weigh on FTSE 100
Shares in ITV have expectedly fallen in the red as the blue-chip broadcaster revealed that its total external revenue had fallen four percent in the first three months of the year, with the company blaming economic and political uncertainty, as well as the timing of Easter. While the FTSE 100 company had cautioned on advertising revenue, Proactive Investors reports that the decline came as a surprise to Liberum which had previously expected ITV to outperform its initial forecasts following better-than-expected results in the first quarter for Scottish broadcaster STV Group, which holds the license for the ITV 1 in the region and provides a read-across for ITV’s main channel.
“There are many things to be positive about ITV, especially on its viewing performance, and the shares are undoubtedly cheap but, with an uncertain political environment and a continuing pattern of downgrades, it is hard to push a buy case now,” the broker pointed out, as it trimmed its rating on the shares from ‘buy’ to ‘hold’. ITV share price is more than five percent down in London trading intraday, weighing on the FTSE 100 index which stands about 0.3 percent lower.
Downbeat results are also weighing on Imperial Brands, with the group reporting a fall in tobacco volumes for the first half of its financial year. Reuters meanwhile noted that the group’s sales were only in line with analysts’ estimates. Imperial, however, reassured investors that it was on track to deliver growth in revenue, adjusted earnings per share and cash conversion in line with full-year expectations. Imperial Brands shares are trading nearly five percent in the red.
Shares in Direct Line Group (LON:DLG) have also come under pressure as the company revealed a 4.2-percent fall in gross written premiums in the first quarter of the year, while the group’s chief financial officer and incoming CEO Penny James pointed to a ‘tough trading environment’. Direct Line’s share price is about two percent worse off, also underperforming the broader UK market.
J Sainsbury (LON:SBRY) is also in the doldrums, trading nearly two percent lower, following a downgrade to ‘neutral’ at Bank of America Merrill Lynch. Sharecast quoted the broker as commenting that while the grocer’s recovery plan was ‘encouraging,’ the recent underperformance versus the market was a concern and growth plans carried an execution risk. The analysts further noted that the stock trades at a 22.5-percent discount to the sector average, which, they reckon, fairly reflects the risks around delivery from the recovery plan. The comments come after the UK competition watchdog recently rejected Sainsbury’s proposed merger with Walmart’s Asda.
UK share prices to watch on Thursday
BT will be in focus tomorrow as it posts its full-year results. IG reports that the company is expected to report headline earnings per share of 25.9p, down 6.7 percent over the year, and £23.7 billion revenue, marking a drop of 1.6 percent from a year earlier. The telco’s payout to shareholders will be of particular interest after a report in The Telegraph suggested that there was a split into the company’s board over whether the company should cut its dividend.
“At present, the dividend yield of near seven percent is beginning to look excessive, but a cut to the payout would risk denting shareholder confidence,” Chris Beauchamp at IG commented in a recent note, adding that at present, the telco’s profits covered its payout to shareholders by around 1.7 times, meaning that for now BT was not paying dividends out of its cash reserves.
Morrisons is also among UK share prices to watch tomorrow as it prepares to post its first-quarter trading statement. City A.M. reports that analysts at Barclays are forecasting total like-for-like growth of 3.1 percent during the quarter, compared with 3.8 percent in the previous three months. The results will come after Kantar Worldpanel disclosed recently that the blue-chip supermarket had grown sales by 0.6 percent in the 12 weeks to April 21. The grocer’s market share stood at 10.3 percent during the reported period.
RSA Insurance (LON:RSA) and Barratt Developments (LON:BDEV) are also reporting tomorrow. UK share prices set to be under pressure during Thursday’s session will include Admiral (LON:ADM), BP (LON:BP), Centrica (LON:CNA) and Hiscox (LON:HSX), all of which are going ex-dividend.
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