FTSE 100 movers: Scottish Mortgage bounces back; Vodafone hit by downgrade

Fri 13 May 2022

LONDON (SHARECAST) - (Sharecast News) - London's FTSE 100 was up 2.3% at 7,400.33 in afternoon trade on Friday, recovering at the end of a volatile week.

Tech-heavy Scottish Mortgage Investment Trust was the standout gainer on the index, having tanked a day earlier.

Coca-Cola HBC fizzed higher after an upgrade to 'buy' from 'hold' at Jefferies, which said said that although there is still no visibility on the endgame for Russia/Ukraine, it has more confidence in the underlying earnings prospects of the business.

The bank noted that with Russia and Ukraine accounting for around 20% of profits, CCH has been hit hardest within European beverages, down 31% since the invasion.

"If we remove Russia/Ukraine and assume that the underlying business can grow mid single digit, we believe the shares are trading on calendar 2023 price-to-earnings 13.8x versus 5-year average multiple 19.3x. On our 20 price target this implies shares are on 16.8x. As guidance is reinstated, consensus will firm up, investor confidence should build and the shares should re-rate."

Vodafone was on the back foot, however, after a downgrade to 'hold' from 'buy' by Jefferies, which pointed to intractable headwinds.

The bank said Vodafone is in a tight spot that necessitates cautious guidance next week. It said that while it recognises the defensive attractions of large-cap telco, Vodafone's credentials are "undermined by forecast risk and a strategic plan not playing out".

"On 17 May, Vodafone will issue new FY22/23 guidance against a backdrop that is getting more challenging," it said.

"There is no competitive let-up in most markets, and a high profile attempt to lead industry price indexation is not getting far. Vodafone has been driving efficiency programmes hard for many years. Its lean cost base lacks the obvious inflation safety valves that may be available to incumbent peers (overstaffing, duplication, legacy)."

Market Movers

FTSE 100 (UKX) 7,396.28 2.25%
FTSE 250 (MCX) 19,815.98 1.72%
techMARK (TASX) 4,302.81 1.90%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 802.40p 6.87%
Flutter Entertainment (CDI) (FLTR) 8,910.00p 5.22%
Entain (ENT) 1,362.00p 4.73%
Prudential (PRU) 957.20p 4.66%
Coca-Cola HBC AG (CDI) (CCH) 1,763.00p 4.51%
Intermediate Capital Group (ICP) 1,416.00p 4.42%
Dechra Pharmaceuticals (DPH) 3,276.00p 4.07%
Smith & Nephew (SN.) 1,268.00p 3.98%
Whitbread (WTB) 2,671.00p 3.81%
Ocado Group (OCDO) 803.20p 3.77%

FTSE 100 - Fallers

Pearson (PSON) 738.80p -2.17%
Vodafone Group (VOD) 117.30p -1.20%
London Stock Exchange Group (LSEG) 7,146.00p -1.02%
Aveva Group (AVV) 2,132.00p -0.33%
Antofagasta (ANTO) 1,337.00p -0.22%
Admiral Group (ADM) 2,240.00p -0.22%
Next (NXT) 6,414.00p -0.22%
Informa (INF) 531.00p -0.19%
Howden Joinery Group (HWDN) 677.20p -0.18%
Avast (AVST) 498.60p -0.02%
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