UK share prices watch: Tobacco shares rise
Imperial Brands (LON:IMB) and British American Tobacco (LON:BATS) have been among today’s UK share prices to watch, as the former announced buyback plans. Elsewhere in the London market, International Consolidated Airlines Group (LON:IAG) is flying lower amid prospects for a hefty fine for its British Airways unit following last year’s customer data theft.
Monday’s notable risers and fallers
Imperial Brands has been one of today’s most notable UK share prices, rallying after updating investors on its capital allocation and shareholder distributions policy, pledging progressive dividend after the current financial year ending September 30. The cigarette maker further unveiled plans to return surplus cash, and announced a buyback of up to £200 million.
“Imperial Brands’ large, stable and growing dividend has been the stock’s main attraction for decades. Recently though that hasn’t been enough to support the share price, which is down over 50% since 2016 despite dividends rising by 10% a year,” Nicholas Hyett, an equity analyst at Hargreaves Lansdown, commented, as quoted by Proactive Investors, adding that with the group’s “dividend yield now over 10%, management have clearly decided enough is enough, and while payments to shareholders will continue to grow going forwards, share buybacks and debt reduction have moved up the list of priorities”.
Imperial Brands’ share price has gained about 2.8 percent in early afternoon trade, compared with about a 0.07-percent gain in the benchmark FTSE 100 index. Shares in blue-chip peer British American Tobacco meanwhile are changing hands nearly two percent higher.
British Airways and Iberia parent IAG is underperforming the broader London market as it disclosed that the Information Commissioner’s Office was planning to fine it as much as £183.4 million over the theft of customer data from the British flag carrier’s website last year. The company, which also owns Ireland’s Aer Lingus and low-cost carriers Level and Vueling, said that it was planning to “defend the airline’s position vigorously, including making any necessary appeals”. IAG’s shares are trading about 1.5 percent in the red.
In smaller London-listed stocks, Cineworld (LON:CINE) is trading higher as RBC Capital Markets reaffirmed the company as a ‘top pick’ and a price target of 400p. Sharecast reports that while the broker has pencilled a slide in first-half earnings for the cinema chain, it expects the company to benefit from a far stronger release schedule in the second half.
“The falling share price, caused by the film release schedule that is driving short-term earnings weakness, suggests the stock would be better vehicle for investors with a longer-term time horizon,” RBC analysts Julian Easthope and Christine Zhou pointed out, adding that they believed that “the weak film slate in the first half offers a fantastic buying opportunity for investors and PE alike”. Cineworld’s shares are up by more than three percent intraday.
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UK share prices to watch tomorrow
Tuesday is likely to bring some excitement on the corporate front with Ocado (LON:OCDO) which is scheduled to update investors on its half-year performance. Chris Beauchamp, chief market analyst at IG, commented in a note last week that while the average move for the shares on results day is five percent, at present options pricing points towards a move of 3.4 percent.
“Volatility in the share price has been relatively consistent since May 2018, with the 14-day average true range oscillating around 38p,” the analyst pointed out. The online grocer’s shares, however, have come under pressure today and are down by more than three percent in early afternoon trade.
Marks & Spencer Group (LON:MKS) is also likely to be among tomorrow’s UK share prices to watch, with the company set to hold its annual general meeting (AGM) during the day. The AGM will come after the high street retailer posted a fall in full-year revenue and profits in May, and announced a rights issue as it looks to finance its joint venture with Ocado. The company, however, managed to keep its spot in the benchmark FTSE 100 index following the benchmark’s latest reshuffle.
Blue-chip software specialist Micro Focus (LON:MCRO) is also reporting its interims tomorrow and Proactive Investors reports that UBS are expecting the software specialist to unveil sales of around $1.6 billion, down six percent organically year-on-year, with underlying earnings (EBITDA) of $684 million.
Smaller London-listed companies reporting tomorrow include Bovis Homes (LON:BVS), TP ICAP (LON:TCAP) and Dechra Pharmaceuticals (LON:DPH).
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