FTSE 100 Analysis: Direct Line gets double upgrade to Buy

FTSE 100 futures

FTSE 100 futures are up just 2.7pts this morning at 7,643.3, having retreated from three-week highs yesterday.

Top UK stock news

AstraZeneca (AZN) said a Phase III trial evaluating a combination of Lynparza, Imfinzi, chemotherapy and bevacizumab demonstrated a ‘statistically significant and clinically meaningful improvement’ in survival for people with certain types of ovarian cancer compared to what is on offer from just chemo and bevacizumab.

Entain (ENT) has acquired sports media business 365scores for $150 million, with another $10 million due if it hits certain milestones. 365scores has over 15 million active users and provides scores and sports information.

Direct Line (DLG) has received a double upgrade from Citi to Buy from Sell on the belief that the insurer has bottomed-out after falling 35% since the start of the year. Citi hiked its price target to 188p from 136p.

RS Group (RS1) said like-for-like sales growth stalled to just 1% in the fourth quarter covering the first three months of 2023 as demand dropped in the Americas and Asia Pacific. RS Group blamed soft demand for electronics, with sales of industrial products soaring 10%. It said gross margins improved and that this should see its annual profit come in ‘slightly ahead’ of consensus.

Hilton Food Group (HFG) reported a 16.5% rise in annual revenue to £3.8 billion, just short of the £3.97 billion forecast, thanks to the boost provided by acquisitions and new markets. However, inflationary pressures saw adjusted pretax profit slump over 17% to £55.5 million, but this was better than anticipated. It also announced it has appointed Steve Murrells as its new CEO from July 3, replacing Philip Heffer.

QinetiQ (QQ) said a contract that sees it help with the UK Royal Navy’s submarine programme has been extended for ten years, worth some £259 million for the company. The Maritime Strategic Capability Arrangement has been prolonged with an option to be extended for another five years.

EnQuest (ENQ) said revenue soared 39% in 2022 to $1.8 billion thanks to higher production and prices, smashing the $1.5 billion forecast. EnQuest sank to a surprise loss after tax of $41.2 million because of the profit levy placed on UK producers. Production will fall this year, which could limit revenue growth.

HICL Infrastructure (HICL) has agreed to buy a minority stake in Altitude, which in turn owns a controlling stake over the largest independent wholesale fibre network in France. The investment will represent about 2% of HICL’s portfolio and is being funded using its existing credit facility, but it is planning to divest from another asset to free up cash.

UK Commercial Property REIT (UKCM) has found tenants for three new lettings of industrial and warehouse space at a combined weighted premium of 40% to previous passing rent. Car parts supplier Webcon, the South West Ambulance Service and a Kentucky Fried Chicken have taken on the sites.

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