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FTSE 100 shares round-up: Unilever, Sainsbury’s, LSE, RELX

It’s been a busy day for some of the UK’s biggest companies as the FTSE 100 index extended its rally to reach another record high. City writer Graeme Evans talks through the catalysts.

25th April 2024 13:42

by Graeme Evans from interactive investor

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Unilever played its part driving the FTSE 100 index to a new record today as a quartet of heavyweight blue-chips put the London market in the global spotlight.

The consumer goods giant touched its highest level since last autumn after first-quarter results showed signs of progress in the margin-focused strategy of new CEO Hein Schumacher.

The Knorr and Hellmann’s business, which is London’s fourth-largest stock by market value, was joined on the risers board by takeover target Anglo American (LSE:AAL) as well as Barclays (LSE:BARC) and AstraZeneca (LSE:AZN) after their updates also pleased investors.

The heavyweight combination propelled the FTSE 100 index as high as 8,103, meaning the value of London’s leading benchmark has rallied more than 4% since 16 April.

Today’s performance was put into context by declines of at least 0.6% for leading benchmarks in Europe and futures trading pointing to a weaker start on Wall Street after last night’s post-bell 15% reverse for shares in Facebook owner Meta Platforms Inc Class A (NASDAQ:META).

The tech giant’s first-quarter earnings came in slightly ahead of expectations but guidance for the current quarter disappointed investors, as did the increased forecast for capital expenditure between $35 billion and $40 billion in 2024.

The earnings season continues tonight with figures by Microsoft Corp (NASDAQ:MSFT) and the Google owner Alphabet Inc Class A (NASDAQ:GOOGL), while on this side of the Atlantic traders have just had their busiest morning of the first-quarter results season so far.

Unilever (LSE:ULVR) was one of the best received after it reported underlying sales growth of 4.4%, driven by a 6.1% jump for its power brands such as Dove, Knorr, Rexona and Sunsilk.

The headline performance, which was split equally between price and volume growth, comfortably beat City expectations for a figure of 3%. Unilever stuck by full-year guidance of 3%-5% as it focuses on a commitment “to do fewer things, better and with greater impact”.

Under the strategy of its new boss, Unilever recently announced a plan to demerge its ice cream business alongside a productivity drive impacting about 7,500 office-based roles.

Schumacher said today: “Unilever's transformation is at an early stage, but we have increasing confidence in our ability to deliver sustained volume growth and positive mix as we accelerate gross margin expansion."

Shares rose 228p to 4,091p but Deutsche Bank has a price target of 4,600p after noting an improvement in the consistency of performance.

Unilever, which is due to pay an unchanged quarterly dividend of 42.68 euro cents a share on 7 June, trades on 16 times forecast 2025 earnings compared with the wider staples sector on a multiple of 20.3 times.

Among other blue-chips reporting today, London Stock Exchange Group (LSE:LSEG) shares recovered from an initially negative reaction to first-quarter figures.

UBS said: “While net revenues were mostly in line with consensus, the mix was weak as LSE’s recurring revenue businesses - Data & Analytics, subscriptions in FTSE Russell and Risk Intelligence - all missed.”

LSE boss David Schwimmer called the performance “another quarter of solid growth” and said the company’s Microsoft partnership had made strong progress, with a number of products either at external pilot stage or set for general release in the current half year.

Shares in RELX (LSE:REL) have been one of the best-returning FTSE 100 stocks of the past 40 years, although this month’s weaker performance has cut this year’s growth to 7%.

The shares fell slightly today despite the legal publisher and risk intelligence business forecasting another year of strong underlying growth in revenue and operating profit.

Looking longer term, it said the trajectory continued to be driven by the ongoing shift in business mix towards higher growth analytics and decision tools.

The shares reached lunchtime at 3,273p but Bank of America reiterated a price target of 4,100p after today’s AGM update.

It said the shares traded at a 20% discount to US peers and that the recent moderation for shares looked an enhanced buying opportunity ahead of a potential AI-enabled acceleration for the Legal division in 2024.

Elsewhere in the FTSE 100, shares in supermarket Sainsbury (J) (LSE:SBRY)’s continued their recent choppy run by falling 6.8p to 261.2p in the wake of full-year results.

Chief executive Simon Roberts said the core food operation had been “firing on all cylinders” after record market share gains and volume growth that accelerated every quarter.

Higher grocery volumes have fed into profit and free cash flow above the top end of the company’s guidance, offset by softer General Merchandise trading.

Underlying profit rose 1.6% to £701 million, with shareholders due to get an unchanged final dividend of 13.1p on 12 July. Roberts continues to see growth in grocery volumes ahead of the market in the current year but with a lower profit contribution from financial services.

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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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