Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

The Expert View: GlaxoSmithKline, WPP and Ashtead

Our daily roundup of analyst commentary on shares, also including Superdry and Carpetright.

Click on the arrow to the right of the picture to view the slides. The arrows to the top right then allow you to move back and forth between them.

If you have any trouble accessing the slides, click here to view them all on the same page.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Click on the arrow to the right of the picture to view the slides. The arrows to the top right then allow you to move back and forth between them.

If you have any trouble accessing the slides, click here to view them all on the same page.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Dividend yield 5.4%
Market capitalisation £74,041m
No. of shares out 4,961m
No. of shares floating 4,949m
No. of employees 98,462
Trading volume (10 day avg.) 14.2m
Turnover £30,186m
Profit before tax £10,488m
Earnings per share 52.82p
Cashflow per share 104.61p
Cash per share 78.88p

 

GSK is cheap, says Jefferies

GlaxoSmithKline (GSK) is the cheapest large cap pharmaceutical stock in Europe and is being underestimated by the market, says Jefferies.

Analyst Peter Welford retained his ‘buy’ recommendation and increased the target price from £15.80 to £17.50. The shares rose 1.6% to £14.93 yesterday.

‘GSK is the cheapest EU large cap pharma on 2020-2021 price/earnings… and also offers the highest dividend yield, which our model suggests is sustainable,’ he said.

Although Welford is ‘not enamoured’ by the deal to acquire biopharmaceutical firm Tesaro, he does now see an 11% earnings per share compound annual growth rate ‘from the 2019 trough’.

He also thinks the market is underestimating the sales of shingles vaccine Shingrix, with consensus being ‘too conservative’.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Dividend yield 7.5%
Market capitalisation £10,667m
No. of shares out 1,262m
No. of shares floating 1,217m
No. of employees 134,413
Trading volume (10 day avg.) 3.7m
Turnover £15,804m
Profit before tax £2,590m
Earnings per share 126.24p
Cashflow per share 169.96p
Cash per share 188.31p

 

WPP strategic shift a sound plan, says Hargreaves

A new strategy at advertising giant WPP (WPP) will see it shift focus to technology, which Hargreaves Lansdown says will simplify the business for the better.

The company will make disposals and unify several strands of the business, spending £30 million in the process, in order to become leaner and more focused on technology, as well as save £275 million a year by 2021.

‘Simplifying a business that had become sprawling, to put it mildly, while simultaneously focusing on helping clients work with new retail giants like Amazon and Alibaba seems a sensible strategy to us,’ said analyst George Salmon.

‘However, whether the new approach will be enough to counter the severe disruption facing the business is another question entirely.’

The shares rose 5% to 845p yesterday.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Dividend yield 2.1%
Market capitalisation £8,151m
No. of shares out 479m
No. of shares floating 469m
No. of employees 16,318
Trading volume (10 day avg.) 2.5m
Turnover £3,706m
Profit before tax £1,861m
Earnings per share 117.86p
Cashflow per share 266.19p
Cash per share 3.90p

 

Interactive Investor: Ashtead share price drop a ‘conundrum’

The Ashtead (AHT) share price slump is a ‘conundrum’ given the equipment rental company’s earnings and profit growth, says Interactive Investor.

Analyst Richard Hunter said ‘on the face of it, the company is riding the wave of an economic boom’ especially in the US but more recently has been plagued by a downturn in US construction.

This coupled with its market’s cyclical nature and the shares ‘have been pounded even if the company’s performance is painting a different picture’.

‘It may well be that Ashtead’s fortunes remain largely welded to prospects in the US, yet the share price performance over the last year has not reaped the benefit of earlier economic success, having fallen 20%, as compared to a 10% drop in the wider FTSE 100,’ said Hunter.

‘Even so, the general view of the company is rather more reflective of both performance and outlook, with the market consensus coming in at a strong “buy”.’

The shares rose 5.8% to £17 yesterday.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Dividend yield 5%
Market capitalisation £468m
No. of shares out 82m
No. of shares floating 59m
No. of employees 3,286
Trading volume (10 day avg.) 0.3m
Turnover £872m
Profit before tax £142m
Earnings per share 63.33p
Cashflow per share 113.48p
Cash per share 92.86p

 

Superdry should be doing better, says Liberum

Growth at fashion brand Superdry (SDRY) has fallen ‘significantly’ but Liberum says it should be doing much better than it is.

Analyst Wayne Brown retained his ‘hold’ recommendation and reduced the target price from 900p to 700p on the stock, which fell 7.9% to 572p yesterday.

‘Since the launch of the new strategy in September 2017 growth rates have fallen significantly,’ he said. ‘Even with difficult market conditions trading has been poor.’

Brown said that discussions with the ex-chief executive and founder have ‘provided weight to a few concerns’ and raises questions about the current strategy.

‘The brand has the flexibility and identity to truly capture the global online opportunity and should be doing much better than it is,’ he said.

 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Dividend yield 0%
Market capitalisation £12m
No. of shares out 68m
No. of shares floating 64m
No. of employees 3,206
Trading volume (10 day avg.) 0m
Turnover £458m
Profit before tax £27m
Earnings per share 1.01p
Cashflow per share 18.64p
Cash per share 18.41p

 

Carpetright restructure comes at the wrong time, says Shore Capital

A restructuring at Carpetright (CPRC) has come at the wrong time but Shore Capital says the group is still well placed to face the challenges the market brings.

Analyst Phil Carroll retained his ‘hold’ recommendation on the stock after interim results showed the first half of the year had been a challenge and the ‘financial performance does not paint a pretty picture’.

‘The restructure unfortunately comes at a time of increased uncertainty for the UK consumer, with the process around the exit from the EU ongoing,’ said Carroll.

‘This is especially unhelpful in what was already a challenging market. However, the transition plan is on track and management see itself as well placed to deal with the challenges ahead. With visibility for the business getting into the position to deliver sustainable profitability remaining very limited we retain our “hold” stance.’

The shares rose 5.2% to 17.2p yesterday.

 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Citywire 20: Investec's du Toit on managing the 'jerk factor'

Citywire 20: Investec's du Toit on managing the 'jerk factor'

Investec boss Hendrik du Toit believes he has become far more decisive over the last 20 years, especially when it comes to managing 'jerk' factor.

Play Citywire 20: Hugh Young's bleak lesson

Citywire 20: Hugh Young's bleak lesson

In the latest video to mark Citywire's 20th birthday, Aberdeen Standard Investments Asia head reminisces about one of the toughest periods in his career.

Play IWD 2019 video: fund and wealth figures define diversity

IWD 2019 video: fund and wealth figures define diversity

To mark International Women's Day, we have spoken to a variety of top fund houses and wealth managers about their definition of diversity, and how they hope to achieve a more inclusive workplace.

Read More
Your Business: Cover Star Club

Profile: Richard Whitehead - 'In my 20s, I was very difficult to work with'

1 Comment Profile: Richard Whitehead - 'In my 20s, I was very difficult to work with'

Dart Capital boss Richard Whitehead is at a pivot point for the business, and looking back to assess where he is, as much as he is looking forward

Wealth Manager on Twitter