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Market Report: Rolls-Royce hit turbulence | Market Report: Rolls-Royce hit turbulence |
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Rolls-Royce hit turbulence yesterday as Goldman Sachs called the top of the aircraft engine maker’s market ascent. | Rolls-Royce hit turbulence yesterday as Goldman Sachs called the top of the aircraft engine maker’s market ascent. |
The broker removed the embattled FTSE 100 engineer from its list of European stocks to buy and instead gave it a neutral rating. “Following recent outperformance, we believe the current multiples for Rolls-Royce adequately reflect the group’s medium-term growth prospects,” Goldman said after a 37 per cent surge from the shares in a month. That followed heavy falls as Rolls-Royce racked up five profit warnings in less than two years. | The broker removed the embattled FTSE 100 engineer from its list of European stocks to buy and instead gave it a neutral rating. “Following recent outperformance, we believe the current multiples for Rolls-Royce adequately reflect the group’s medium-term growth prospects,” Goldman said after a 37 per cent surge from the shares in a month. That followed heavy falls as Rolls-Royce racked up five profit warnings in less than two years. |
The downgrade came as the company, which last week gave US activist investor ValueAct a seat on the board, shed another 150 management jobs. Rolls dived 18p to 682p. | The downgrade came as the company, which last week gave US activist investor ValueAct a seat on the board, shed another 150 management jobs. Rolls dived 18p to 682p. |
European Central Bank president Mario Draghi sent stocks yo-yoing yesterday. After initially giving them a boost by saying the ECB is topping up its monthly bond-buying programme, he then said he did not anticipate further interest rate cuts, causing the FTSE 100 to end down 109.62 points at 6,036.70. | European Central Bank president Mario Draghi sent stocks yo-yoing yesterday. After initially giving them a boost by saying the ECB is topping up its monthly bond-buying programme, he then said he did not anticipate further interest rate cuts, causing the FTSE 100 to end down 109.62 points at 6,036.70. |
Whitbread, up 7p at 3,708p, avoided the sell-off as investors warmed to the Costa Coffee owner. They listened to advice from Jefferies, which claimed the recent share slump does not now factor in a potential spin-off of the café chain and raised its rating to hold. | Whitbread, up 7p at 3,708p, avoided the sell-off as investors warmed to the Costa Coffee owner. They listened to advice from Jefferies, which claimed the recent share slump does not now factor in a potential spin-off of the café chain and raised its rating to hold. |
Car insurer Esure also dodged the carnage, unchanged at 263p as it emerged that Toscafund has increased its stake in the Sheilas’ Wheels owner to above 5 per cent. Earlier in the week, Esure revealed that underlying pre-tax profits slumped 23 per cent last year to £83m. | Car insurer Esure also dodged the carnage, unchanged at 263p as it emerged that Toscafund has increased its stake in the Sheilas’ Wheels owner to above 5 per cent. Earlier in the week, Esure revealed that underlying pre-tax profits slumped 23 per cent last year to £83m. |
Ukraine-focused iron ore firm Ferrexpo, a former FTSE 100 constituent, was left 5.5p lighter at 33p after its annual results. Profits and revenues both took a hit, as expected, but a rise in net debt to $868m (£607m) was the big concern for shareholders. | Ukraine-focused iron ore firm Ferrexpo, a former FTSE 100 constituent, was left 5.5p lighter at 33p after its annual results. Profits and revenues both took a hit, as expected, but a rise in net debt to $868m (£607m) was the big concern for shareholders. |
Alarm bells rang when Sprue Aegis, the AIM-listed smoke alarms maker, said it now expects a lower annual operating profit of £8.3m, after agreeing to pay its supplier DTL more to help it deal with higher labour costs in China. Sprue fell by 28p or 10 per cent to 264.5p. | Alarm bells rang when Sprue Aegis, the AIM-listed smoke alarms maker, said it now expects a lower annual operating profit of £8.3m, after agreeing to pay its supplier DTL more to help it deal with higher labour costs in China. Sprue fell by 28p or 10 per cent to 264.5p. |