Home > UK share prices watch: Johnson Matthey dips

UK share prices watch: Johnson Matthey dips

July 17, 2019 By Tsveta Zikolova

With the summer earnings season gaining traction, investors have a lot of UK share prices to watch this Wednesday, including specialty chemicals group Johnson Matthey (LON:JMAT), whose shares are taking a beating as the company flagged lower profit at one of its units. Tomorrow is set to bring more excitement on the mid-cap front, with both easyJet (LON:EZJ) and Royal Mail (LON:RMG) scheduled to post results.

Johnson Matthey and Fresnillo fall

Johnson Matthey is deep in the red as it reported in its annual general meeting statement that it expects operating profit from its Clean Air business to be slightly below the prior year on the back of higher-than-anticipated short term costs. Reuters reports that the business provides the lion’s share of its earnings.

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The company, however, noted that at current foreign exchange rates, translational foreign exchange movements for the year ending March 31, 2020,  are expected to benefit sales by £75 million and  underlying operating profit by £12 million. Johnson Matthey’s shares are down by more than five percent in early afternoon trade, as compared with about a 0.2-percent fall in the benchmark FTSE 100 index.

Fresnillo (LON:FRES) is another blue-chip in the doldrums after it reiterated that it expects the current year to be challenging, noting that as a result, it had decided  to lower its full-year production guidance. Fresnillo’s shares are changing hands about 2.5 percent in the red.

Anglo-Australian miner BHP (LON:BHP) has been steady as the company disclosed that it had finished its 2019 financial year with 11-percent increase in quarterly production, and that it was in a position to deliver higher volumes in the 2020 financial year. IG quoted Royal Bank of Canada as saying in a research note this morning that BHP had mildly exceeded most of its production estimates, while also meeting production estimates across petroleum, copper and iron ore.

“We continue to prefer BHP over its key Australian peer RIO given relative valuation,” the broker pointed out, adding that “BHP’s more diverse portfolio mitigates the potential impact of falling iron ore prices”. Shares in the company are changing hands about 0.25 percent higher.

Burberry (LON:BRBY) has extended the previous sessions gains, with the shares rallying in the wake of the luxury goods retailer’s first-quarter update. The company’s stock is about 2.7 percent better off this afternoon.

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“Much as we remain supporters of Burberry’s management strategy, we think the stock now prices in a very optimistic scenario and trades at a significant premium to peers in the absence of a very strong 2020-21 performance (i.e. needs close to double digit like-for-like sales growth to even justify this today),” Jefferies said, as quoted by Proactive Investors.

Mid-cap UK share prices to watch include SAGA (LON:SAGA), whose shares are in demand as activist investor Elliott disclosed a stake in the cruises-to-insurance group for the over-50s. The move comes after the company disclosed that political uncertainties are weighing on its tour business.

“We have good and open relations with all of our shareholders and expect to be in contact with Elliott shortly,” a spokeswoman for the company said, as quoted by Reuters. Saga’s shares are up by more than nine percent, compared with a 0.03-percent fall in the mid-cap FTSE 250 index.

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UK share prices to watch on Thursday

easyJet is reporting tomorrow and Proactive Investors reports that Berenberg expects the mid-cap airline’s revenue per seat to have dropped 5.5 percent versus the prior-year period, while cost per seat is forecast to have improved during the reported period, reflecting fewer strikes.

“We expect the company to set its FY 2019 [pre-tax profit] range below the most recently guided c£435-million level,” the broker pointed out. “We estimate £408 million, slightly below the current consensus of £417 million. Our estimate implies a c£90 million H2 improvement year-on-year.”

The results will come amid ongoing turbulence in the sector and will come after earlier this week, Ryanair (LON:RYA) cautioned that as a result of  the current uncertainty over the Boeing 737 MAX deliveries, it was cutting its 2020 growth rate from seven percent to three percent.

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Royal Mail Group (LON:RMG) will also be among tomorrow’s UK share prices to watch, with a trading update due. Proactive Investors reports that analysts at Jefferies forecast a three-percent rise in first-quarter revenue. Other London-listed companies reporting tomorrow include Anglo American (LON:AAL) and SSE (LON:SSE).

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