Must read: trade deal optimism, ITV, Reckitt Benckiser

GLOBAL MARKETS

Optimism towards a US-EU trade deal is lifting market sentiment with the DAX and CAC 40 in the green. The FTSE 100 is also rallying, up around 0.5% driven partly by Reckitt Benckiser Group (LSE:RKT) which has soared to the top of the basket thanks to its strong earnings report. BT Group (LSE:BT.A) is also among the top gainers, on the back of earnings and the appointment of a new CFO. ITV (LSE:ITV) is at the top of the FTSE 250 leaderboard, gaining over 7% on forecast topping results.

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Markets await a slew of flash PMI readings in Europe for July as well as the latest European Central Bank interest rate decision at lunchtime when it is expected to keep interest rates unchanged. 

In the US, futures are pointing to a mixed open, with the Nasdaq set to gain while the S&P 500 hugs the flatline. Tesla Inc (NASDAQ:TSLA) shares sank 6% after Elon Musk warned of ‘rough quarters’ ahead and the electric vehicle giant reported disappointing profits and sales. Alphabet Inc Class A (NASDAQ:GOOGL) closed higher by 2% after reported a beat on the top and bottom line in the second quarter.

ITV 

ITV reported first half group revenue down 3% to £1.85 billion. Group adjusted EBITA (profit) fell 31% to £146 million from £213 million. However, its first half performance came in ahead of expectations and ITV said it is on track to meet 2026 financial targets, lifting shares to the top of the FTSE 250. 

ITV also announced another £15 million in cost savings, taking total 2025 non-content cost savings to £45 million. Within ITV Studios, it kept it outlook unchanged for full year margin to come within the 13-15% range. While ITV Studios revenue grew by 3%, adjusted EBITA was down 21% to £107 million.

This was always going to be a tricky set of earnings for ITV to deliver because of the strength of H1 2024 on the back of the Men’s Euros football tournament which made for an unflattering year-on-year comparison. Within that context ITV fared very well, delivering a smaller-than-expected drop in total ad revenues (down 7% vs forecasts for an 8% drop) and forecast topping earnings and revenue. Amid the broad, structural decline in linear TV advertising and changing TV viewing habits, ITV is pursuing a digital focussed strategy aiming to continue to deliver growth in digital ad revenues. 

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Its guidance looks upbeat too – strong viewership for programmes like Rivals with season 2 upcoming and Love Island likely to provide a boost helping the business meet its 2026 financial targets and its 2025 ITV Studios outlook remains unchanged. ITV’s recent partnership with Disney means both streamers can offer a selection of each other’s programmes in a reciprocal deal. That should help both platforms compete with the likes of the streaming behemoths like Amazon.com Inc (NASDAQ:AMZN) and Netflix Inc (NASDAQ:NFLX). 

M&A speculation seems to have gone quiet around ITV at least for now following reports earlier in the year the French production company Banijay was exploring a possible takeover. Nothing has materialised so far, but any further speculation could provide some support for ITV’s shares. 

Shares in ITV are up around 13% so far this year, but are down by just shy of 1% over the past 12 months. According to Refinitiv, analysts aren’t overly optimistic towards the stock with two sell recommendations, six holds and two buys. A softening stance from analysts with the potential for some price target upgrades could be on the cards for ITV however in light of today’s update.

RECKITT BENCKISER 

Reckitt Benckiser shares are soaring after quarterly net revenue growth and operating profit surpassed expectations. It also raised its revenue guidance and announced a £1 billion share buyback programme. 

Despite weakness in North America and Europe, strong sales in emerging markets like India and Latin America boosted sales for the consumer goods giant. Reckitt has been focusing on streamlining its portfolio, restructuring away from some of its non-core brands to focus on its best performers or ‘powerbrands’ like Dettol, Durex and Nurofen. It recently sold a majority stake in Essential Home, which owns Cillit Bang and Airwick, as part of this shift. 

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Last year was a mixed period for Reckitt, but today’s update provides reason to believe its strategy is paying off. Geographical diversification also means Reckitt is well positioned to navigate any US and European economic weakness amid the US tariff uncertainty, allowing it to return cash to shareholders with today’s buyback. 

Shares have soared towards the top of the FTSE 100, up over 8.5%, landing the stock up over 12% so far in 2025 and up over 20% in the past 12 months.