FTSE 250 movers: Contour falls again while Dixons' shares dialed up

Wed 10 Oct 2018

LONDON (SHARECAST) - (Sharecast News) - London's FTSE 250 was down 0.38% at 19,474.60 in afternoon trading on Wednesday.
Power generation business Contour Global retained its status as the biggest faller from Tuesday, dropping by over 7% to a new all-time low below 165p as it approaches the first anniversary of its arrival on the market next month.

Hungarian budget airline Wizz Air fell alongside even as Numis reiterated a 'buy' rating with a target price of 3,291p, though the broker updated its estimates to reflect recent changes in oil prices and FX, which it expected to result in a slowing of the company's capacity growth.

Numis scaled back its estimates for Wizz's profits after tax in 2019 and 2020 by 5% and 21% respectively but still argued that the current share price undervalued the airline and its "market share of an under-penetrated market and increasingly competitive cost base".

"Given the number of inefficient carriers that still operate in CEE, WIZZ's c.20% share of capacity and its "extremely competitive" deal with Airbus, we believe WIZZ is well positioned in the event of a sector shake-up," the broker said.

Dixons Carphone was the top gainer of afternoon trade after being upgraded to 'buy' from 'hold' at HSBC, with the target price set at 195p, reasoning that the company's new chief executive Alex Baldock is more ambitious than the current share price suggests.

"Dixons Carphone is a strong market leader with a well advanced multichannel platform and right-sized property portfolio. This arguably makes it lower risk than many stocks in the sector. We have been impressed with the new CEO's performance so far [ . . .]  and expect the strategy update in December to be positive," said a note from HSBC.

The note added that the current share price reflected much of the bad news of the new strategy, but none of the good, with the shares well supported by even the low end of free cash flow targets.

Sophos climbed after having launched its Endpoint Detection Response suite for the identification and analysis of malicious code at a customer event in London on Tuesday.

The security software firm's shares had dropped last month amid investor fears that pricing pressures from increased competition would see a cut in full year guidance being tacked onto the release of the company's third quarter results later in October.

Lancashire Holdings started to recover after Numis reiterated a 'buy' rating and target price of 730p, with the broker citing signs of the business starting to "grow modestly" after having shrunk over the past four years.

The broker said that better pricing, new hires, competitive dislocation in certain segments and the rise in all prices prompted it to model net earned premium growth of 32% for Lancashire over the next two years.

"Although we don't expect the spate of large losses in Q3 to materially change the big picture, we think the losses will help ensure catastrophe re/insurance rates remain stable and we think the large marine losses could prompt sector-specific rate rises," said a note from Numis.

Before Wednesday the insurer had dropping sharply for two days after reporting that it expects to report third-quarter net losses following hits to its marine portfolio and exposure to natural disasters including US hurricane Florence, and Asian typhoons.

Market Movers

FTSE 250 (MCX) 19,474.60 -0.38%

FTSE 250 - Risers

Dixons Carphone (DC.) 161.25p 5.05%
TP ICAP (TCAP) 281.70p 4.33%
Daejan Holdings (DJAN) 5,970.00p 4.01%
Card Factory (CARD) 193.10p 3.76%
Sophos Group (SOPH) 448.40p 3.65%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 109.50p 3.30%
CLS Holdings (CLI) 217.00p 3.09%
Vivo Energy (VVO) 123.94p 3.08%
Lancashire Holdings Limited (LRE) 545.50p 2.92%
Just Group (JUST) 80.75p 2.87%

FTSE 250 - Fallers

Contour Global (GLO) 163.00p -7.02%
Bodycote (BOY) 804.50p -5.58%
Vesuvius (VSVS) 590.00p -5.22%
Electrocomponents (ECM) 654.80p -4.30%
Victrex plc (VCT) 2,892.00p -4.24%
Synthomer (SYNT) 498.20p -3.82%
TI Fluid Systems (TIFS) 207.00p -3.72%
Wizz Air Holdings (WIZZ) 2,403.00p -3.69%
Games Workshop Group (GAW) 3,430.00p -3.52%
Kaz Minerals (KAZ) 497.00p -3.50%
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