Interactive Investor

FTSE 100 shares round-up: Auto Trader, AstraZeneca, B&M, Flutter

It’s been a good day at office for the FTSE 100 index, bouncing almost 100 points from the morning low. Our City writer runs through the best and worst blue-chip performers.

9th November 2023 15:45

by Graeme Evans from interactive investor

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A turbocharged performance by Auto Trader Group (LSE:AUTO) today led a robust session for the FTSE 100 index as investors also welcomed a return to form for AstraZeneca (LSE:AZN) shares.

London’s top flight ended this week’s lacklustre run of form by improving 0.8% to 7,462, with NatWest Group (LSE:NWG), Taylor Wimpey (LSE:TW.) and Burberry Group (LSE:BRBY) among other stocks doing well.

The biggest share price casualties were Flutter Entertainment (LSE:FLTR) and B&M European Value Retail SA (LSE:BME), even though both outlined strong growth ambitions alongside their latest results.

The market-leading performance by Auto Trader saw shares jump 58.4p to 693.8p, continuing the rebound for the online car marketplace after starting the year near 520p.

However, Bank of America sees further to go after raising its price target by 3% to 790p in the wake of today’s interim results. It pointed out the valuation is still near five-year lows relative to peers.

Today’s revenues of £280.5 million came in 4% stronger than City forecasts, leading to operating profits 10% higher at a better-than-expected £164.6 million. An interim dividend of 3.2p a share totalling £29.5 million is due to be paid on 26 January, up from 2.8p previously.

Within the results, retailer numbers were broadly in line with expectations at 13,710 and the key benchmark of average revenue per retailer grew 12% year-on-year at £2,683.

Boss Nathan Coe remains confident in long-term prospects, adding that buyers have been spending more time and completing more of their car buying journey on Auto Trader.

He added: “We are working in partnership with record numbers of retailers and manufacturers, who are turning to our platform as the most effective and efficient way to source, price and sell their vehicles.”

Numis Securities increased its full-year earnings forecasts to reflect “a strong set of interims with encouraging outlook”. It now forecasts a dividend for the year of 9.2p a share compared with 8.8p previously, while it has reiterated a “buy” recommendation and 760p target.

Among other strong results-day performers, AstraZeneca rose 380p to 10,550p after the pharmaceuticals giant upgraded full-year guidance.

The rebound for the London market’s second biggest stock follows a 14% decline since April. In today’s figures it reported product sales of $11 billion (£9 billion) in the three months to September, a 4% rise on a year earlier that met City forecasts.

UBS, which has a “buy” recommendation and 13,000p price target, noted that Astra achieved sales beats for cardiovascular treatment Forxiga and Imfinzi in oncology.

Astra’s chief executive Pascal Soriot highlighted a strong growth trajectory in the third quarter, leading to his new guidance for underlying revenues to grow by a low teens percentage and earnings per share by at least a low double digit figure.

On the fallers board, Flutter Entertainment dived 1,365p to 12,335p after third-quarter revenues of just over £2 billion came in short of the City’s £2.15 billion forecast.

The performance was negatively impacted by recent customer-friendly sports results and a declining Australian racing market.

This means the Paddy Power and Betfair group now expects its non-US operations to achieve adjusted earnings for the year of about £1.44 billion, compared with previous guidance for up to £1.6 billion.

In the US, where the company’s FanDuel business continues to perform well, Flutter is on track for the mid-point of revenues guidance at £3.75 billion.

Chief executive Peter Jackson pointed to “great progress” in the US, having become the sector’s first online operator to achieve structural profitability. He reported an excellent start to the NFL season, with the “sports rich” months of November and December still to come.

Flutter expects a dual New York listing by the first quarter of next year, providing it with access to the world's deepest and most liquid capital markets.

At B&M European Value Retail, shares fell 29.6p to 508.2p after half-year adjusted earnings of £269 million came in slightly short of City expectations. The bottom end of new full-year earnings guidance of between £620 million and £630 million also offered disappointment.

In the first six weeks of the company’s so-called Golden Quarter, B&M reported like-for-like sales growth of 1.6% but with momentum particularly strong in the last three weeks.

New guidance for the estate will now see not less than 35 stores in the 2023/24 financial year, up from 30 seen previously, and no fewer than 45 a year in 2025/26.

This is expected to mean 20% additional UK sales space over the next three years, while the group has also raised its UK medium-term target to not less than 1,200 stores compared with previous guidance above 950. This represents a 70% upside from 712 stores currently.

Bank of America has a price target of 675p, adding that a special dividend announcement in January could be the next catalyst for shares. It notes the stock trades on 13 times forecast earnings, with a 7% dividend yield.

The bank said: “We reiterate our Buy on B&M which offers strong earnings growth, superior cash conversion, and dividend upside.”

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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