FTSE 100 Closes Down 1.2% as Sentiment Remains -2-

1144 GMT - Premier Inn owner Whitbread's strong 1H shows U.K. margins were back to prepandemic levels, allowing for further upgrades, Liberum analysts Anna Barnfather and Nishant Dahad say in a note. This prompts the analysts to upgrade adjusted pretax profit forecasts for FY 2024 to GBP550 million from GBP474 million, as confidence in the outlook for the rest of the year is underlined by continued strong U.K. room rate growth, maintained occupancy, and food & beverages growth. "Supply dynamics should remain favorable for longer and support demand growth across Premier Inn's diverse customer base. This should also begin to translate into a rebuilding UK pipeline," the analysts say. Liberum rates the stock buy and raises its target price to 4,580 pence from 3,990 pence. ([e-mail])

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McBride Shares Looks Cheap After Strong 1Q Update

1126 GMT - McBride delivered substantial profit upgrades in its first-quarter earnings update, sending shares higher and driving rating upgrades, Peel Hunt says. The U.K. supplier of household and personal-care products has benefited from a change in market conditions, and current trends--like private-label products taking increasing market share as consumers look to offset the rise in the cost of living--should sustain the company, Peel Hunt analysts Charles Hall and Andrew Ford say in a research note. "In our view the [share price] is ridiculously low, given the improved profits and balance sheet," the brokerage says. Peel Hunt raises its rating to buy from add and its target price to 85 pence, from 50 pence. Shares are up 22% at 39.9 pence. ([e-mail])

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European Stocks Fall After Asia Losses; US Set to Drop

1120 GMT - European stocks fall after downbeat Asia trading and ahead of an expected slightly lower U.S. open as Middle-East unrest continues to dampen sentiment. The Stoxx Europe 600 drops 0.7%, the FTSE 100 retreats 0.8%, the CAC 40 backtracks 0.6% and the DAX slips 0.2%. Oil stocks lose some of their recent gains as Brent crude falls 1.3% to $90.28 a barrel. Markets in Australia, mainland China, Japan and South Korea dropped more than 1% and Hong Kong stocks tumbled 2%. IG futures data show the Dow opening at 33657, versus Wednesday's close of 33665. "Among the U.S. companies reporting today is American Airlines, while weekly jobless claims and September's existing home sales figures are also set for release," IG analysts write. ([e-mail])

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Shell, TotalEnergies Look Strongest Across Oil Sector Ahead of 3Q Results

1116 GMT - Shell and TotalEnergies are the top picks among major oil companies due to having the most diversified source of cash-flow strength into 2024 and beyond, Bank of America analysts write in a research note ahead of 3Q results kicking off next week. The oil sector should see more beats than misses--with Repsol and Galp as the only laggards--as consensus earnings estimates carry a 5% average upside, the U.S. lender says. Higher oil prices and refining margins are expected to have boosted earnings across the sector, although working capital outflows will have hampered cash conversion and depleted most upside to cash flow from operating activities consensus, BofA says. "We expect more earnings beats than cash flow beats," it says. TotalEnergies reports on Oct. 26, while Shell reports Nov. 2. ([e-mail])

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Man Group's Reassuring Flow Mix In Line With Trend

1111 GMT - Man Group's third-quarter flow mix is reassuring, Citi says in a note. The investment management firm's figures back up its comments at its first-half results on strong continued demand in the face of investor worries about a weaker mix, analysts say. Given the better mix posted for the quarter, Citi analysts expect low single-digit consensus upgrades to management-fee earnings. However, they note this may be offset by weaker October trading in key strategies from its diversified quantitative investment manager, Man AHL. Citi rates the stock buy with a 280 pence target price. Shares are up 1.5% at 217.5 pence ([e-mail])

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AJ Bell's Performance Stands Out as Peers Struggle

1056 GMT - AJ Bell looks like the wealth-management sector's stand-out performer after the U.K. investment platform posted better than expected closing assets under administration for fiscal 2023, Panmure Gordon says. Peers have struggled to report net flows in the quarter given challenging market conditions, it notes. "Despite the cyclical headwinds, AJ Bell continues to grow at a leading rate within a structurally growing sector, and performance shows no sign of that changing," analysts Rae Maile and Ross Luckman write. They point out that the company's increased marketing focus is continuing to pay dividends as its platforms kept a consistent level of flows compared with previous quarters. Shares, which are down 25% year to date, rise 5.9% to 269.4 pence. ([e-mail])

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Dunelm's 1Q Shows Sustained Growth Momentum

1036 GMT - Dunelm's 1Q performance showed an improvement in gross margin despite the group's reputation for focusing on value-offerings over its products, Interactive Investor's head of markets, Richard Hunter, says in a note. The U.K. soft-furnishing retailer reported a margin growth of 1.2% over the period, partially supported by foreign-exchange tailwinds and reduced freight cost, while sales for the period rose 9%. The group has also launched a new marketing campaign for the autumn and winter ranges and is taking care of its digital business, which now represents 35% of overall sales, Hunter adds. "Dunelm's star remains in the ascendant, with future expansion planned to maintain momentum," it said. ([e-mail])

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(END) Dow Jones Newswires

10-19-23 1211ET