FTSE 100 Ends Monday Down on Commodities Weakness

The FTSE 100 ended Monday down 0.22%, as a weaker commodities sector weighed on the index. Weakness in basic resources and energy acted as the main drag on the FTSE 100, though there also appears to be an element of profit taking at play, says CMC Markets UK chief market analyst Michael Hewson in a market comment. This hit the miners after a broker upgrade inspired gains on Friday, with miners Anglo American and Antofagasta slipping back Monday. BP and Shell also dragged down the index on the back of further weakness in oil and gas prices, Hewson says.

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COMPANIES NEWS:

Titon Expects to Report a Widened Pretax Loss

Titon Holdings said that it expects to report a wider pretax loss for fiscal 2023 than previously expected following a continued drop in profits at the South Korean business due to tax and other adjustments, and despite the U.K. and Europe business exceeding expectations.

MARKET TALK:

Future PLC's Growth Hindered by Lack of Investment

1058 GMT - Future PLC long-term organic growth is expected to suffer, with the group lacking investment in higher quality content to retain and attract new users, Jefferies analysts write in a note. In addition, the use of AI chatbots will cause higher risk of disintermediation which will lead to lower revenue over time, they say. Organic growth is unlikely in fiscal 2023-25, with the specialist media company's online audience remaining flat over the past three years, the analysts say. Jefferies downgrades its rating on the stock to underperform from hold, and lowers the price target to 730 pence from 910 pence. Shares are down 1.3% at 834.50 pence. ([e-mail])

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DS Smith Shares Look Cheap, Says Barclays

1037 GMT - DS Smith shares look cheap, Barclays says, upgrading the London-listed packaging and paper group to overweight from equal-weight. Smith is one of the cheapest stocks in global packaging and a volume recovery looks set to boost its valuation, Barclays says. From full-year 2024/25, free cash flow looks likely to be ahead of dividends and if Smith reins back growth capital spending, FCF would be significantly ahead of dividends and it could consider share buybacks, Barclays says. "We believe DS Smith should cut capex to maintenance-capex levels and hope it doesn't engage in expensive M&A and instead focuses on optimizing its portfolio and operations," Barclays analysts write, raising their price target to 360 pence from 310p. Shares rise 2% to 303p. ([e-mail])

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Diageo Unlikely to be Reach Growth Targets

1019 GMT - Diageo's revenue and profit growth goal is too high given the adverse operational environment and lower margin, RBC analysts James Edwardes Jones and Emma Letheren say in a note. The liquor maker's previous guidance was already excessive despite unexpected issues in Latin America, they say. The 5%-7% revenue-growth target is also higher than what has previously been achieved, except during the 2021-23 period, which was boosted by the pandemic and tequila, they say. Added to that, the liquor maker could face excessive inventory in the supply chain, a concern aggravated by an executive variable remuneration policy based on organic sales growth, they add. This means that remuneration is heavily weighted to sell in--sales to the retailers--rather than sell-out--retailer sales to end customers--they say. Shares are down 0.1% to 2,813 pence. ([e-mail])

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European Airlines Should See Capacity Rise in 2024

1014 GMT - The European airline sector will likely see capacity rise in 2024 while demand should stay strong too, Deutsche Bank analysts write in a research note. The analysts expect the U.S. economy notably weaker than this year, while the EU economy has yet to endure any serious pain in the labor markets. "In light of this, we continue to prefer to invest cautiously via low-cost carriers with strong balance sheets and attractive valuations," they say. They rate Ryanair and easyJet stocks buy, and downgrade Wizz Air to sell from hold. Shares in Ryanair are down 0.1% at EUR17.99, easyJet shares are down 0.4% at 470.70 pence and Wizz Air shares are down 0.8% at 1,9231 pence. ([e-mail])

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Wizz Air 3Q Traffic Could Slightly Miss Views, Goodbody Says

0930 GMT - Wizz Air's November traffic growth implies 3Q--ending Dec. 31--will come in slightly below Goodbody's estimates, analyst Dudley Shanley at the Irish brokerage says. Assuming the budget airline posts a similar growth rate in December, passengers carried in the quarter will come in around 15.5 million, slightly trailing Goodbody forecasts. "However, as always, the unknown here is the strength of yields and we remain comfortable with forecasts for FY24," Shanley says. Shares are down 1.1% at 1,926 pence. ([e-mail])

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(END) Dow Jones Newswires

12-04-23 1213ET