Vodafone (LON:VOD) and Pearson (LON:PSON) are among this Friday’s most notable UK share prices, rallying with investors reacting positively to their respective updates. Next week is set to provide yet more excitement, with results the FTSE 100 banking reporting season kicking in.
Vodafone and Pearson rally on Friday
Vodafone has spiked to the top of the FTSE 100 leaderboard, even as it reported a decline in revenue for the first three months of its financial year. The blue-chip telco’s chief executive said, however, that the company had seen “significant quarter of commercial activity,” and expected its gradual recovery in its service revenues to continue.
Vodafone further said that it is planning to separate its European tower infrastructure into a new organisation, and that it is planning to monetise a substantial proportion of the new company over the next 18 months, with options including an initial public offering or the sale of a minority stake.
“Vodafone’s latest quarterly update has given investors somewhat of a reprieve as shares of the telecoms giant have risen by over 7%,” Helal Miah, an investment research analyst at The Share Centre, commented, as quoted by Proactive Investors. Reuters meanwhile quoted analysts at Citi, who have a ‘buy’ rating on Vodafone, as noting that the better top line and the decision to separate the towers and look at monetisation should be well viewed.
“The group’s service revenues, which have been under pressure, showed significant improvements against the prior quarter coming in materially ahead of the markets expectations.” Vodafone’s share price is up by a little more than nine percent in early afternoon trade in London, contributing to about a 0.6-percent gain in the benchmark FTSE 100 index.
Pearson has been another prominent blue-chip riser as its interim update signalled that the group’s shift to digital is starting to bear fruit. The education publisher posted a rise in six-month revenue, having seen growth in all divisions, and said that it was on track to at least stabilise revenue this year and return the company to top line growth from next year. Pearson further upgraded its adjusted earnings per share guidance. The group’s shares are up by 4.6 percent.
In smaller UK share prices to watch, Sports Direct (LON:SPD) has been volatile as it failed to release its preliminary results for the period ended April 28. The company had previously warned that the report would be delayed beyond July 18, and would come out between July 26 and August 23.
“A delay on top of a delay does not look good. Investors will take it as a bad sign although we’re not sure if it’s just a technical glitch or something more serious,” Markets.com analyst Neil Wilson said as quoted by Reuters. Sports Direct’s shares are currently up by 0.6 percent, outperforming a 0.2-percent gain in the mid-cap FTSE 250 index, having posted a four-percent fall earlier in the session.
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UK share prices to watch next week
London-listed lenders will take the centre stage next week, with Lloyds Banking Group (LON:LLOY) set to kick off the FTSE 100 banking reporting season on Wednesday. The lender’s results will come after it emerged that the company will have to pay £140 million Standard Life Aberdeen (LON:SLA) to settle a dispute over a £100-billion asset management contract.
Barclays (LON:BARC) will follow with its interims on Thursday, amid its ongoing battle with activist investor Edward Bramson over its investment banking division. Royal Bank of Scotland Group (LON:RBS) reports on Friday, as it continues to search for a new chief executive, with outgoing CEO Ross McEwan having recently been appointed to the top job at the National Australia Bank.
Interactive Investor quoted UBS this week as commenting that the UK domestic banks are attractively valued at about seven times 2019 earnings per share (EPS) and much more compelling than European counterparts.
“Though we expect concerns around Brexit to remain a significant stumbling block to a near term re-rating we think these banks offer good absolute and excellent relative value compared with most eurozone peers,” the broker’s analyst Jason Napier commented, as quoted by the newswire.
Other UK share prices to watch next week include Centrica (LON:CNA), Reckitt Benckiser (LON:RB), BAE Systems (LON:BA), Direct Line (LON:DLG), Royal Dutch Shell (LON:RDSA), British American Tobacco (LON:BATS), International Consolidated Airlines Group (LON:IAG) and BT Group (LON:BT.A), all of which are reporting next week.
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