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Key stats
Market capitalisation £85,287m
No. of shares out 2,294m
No. of shares floating 2,213m
No. of common shareholders 115,842
No. of employees 55,761
Trading volume (10 day avg.) 3m
Turnover £19,564m
Profit before tax £7,829m
Earnings per share 1,360.26p
Cashflow per share 1,408.44p
Cash per share 146.32p

BAT could benefit from e-cig clampdown, says Liberum

The US regulatory crackdown on e-cigarette sales to young people could benefit British American Tobacco (BATS) as people switch back to tobacco, says Liberum.

Analyst Nico von Stackelberg reiterated his ‘buy’ recommendation and target price of £41.00 on the shares after the US Food and Drug Administration (FDA) announced ‘historic action’ against 1,300 retailers and five manufacturers for encouraging the teen use of e-cigarettes.

‘This increases the probability that key culprits of the epidemic may lose their ability to sell their pod-based products and/or certain youth appealing flavours,’ said von Stackelberg.

‘The profits are in cigarettes so this announcement is a slight positive as addicted e-cig consumers may switch back to tobacco products.’

Key stats
Market capitalisation £6,229m
No. of shares out 2,368m
No. of shares floating 2,357m
No. of common shareholders
No. of employees 105,487
Trading volume (10 day avg.) 9m
Turnover £17,262m
Profit before tax £872m
Earnings per share 13.02p
Cashflow per share 30.53p
Cash per share 13.88p

Morrison faces pressure, says AJ Bell

Morrison (MRW) is doing ‘a very good job’ of growing earnings in a competitive market, says AJ Bell, but there are questions over how long the trend can persists.

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The supermarket’s latest results show increasing profit, dividend growth and a special dividend, as well as net debt falling.

Analyst Russ Mould said the business was ‘on a roll’ but questioned how long its run could last, especially given the planned merger of Sainsbury’s and Asda would weaken its position.

‘Latest figures from Kantar Worldpanel show that Morrisons has a 10.4% market share, bigger than Aldi and Lidl but much less than Tesco, Sainsbury’s and Asda,’ he said.

Key stats
Market capitalisation £15,076m
No. of shares out 5,960m
No. of shares floating 5,842m
No. of common shareholders
No. of employees 7,570
Trading volume (10 day avg.) 12m
Turnover £40,491m
Profit before tax £3,087
Earnings per share 26.26p
Cashflow per share 27.79p
Cash per share 317.52p

L&G pension deals equal profit boost, says Shore Capital

Legal & General (LGEN) has completed a £4.4 billion pension buy-in for the British Airways pension scheme, which Shore Capital said was just one of a strong pipeline of deals.

Analyst Paul De’Ath has his recommendation ‘under review’ as the insurer wrote the largest ever bulk pension deal, and expects there is another £27 billion of pension risk transfer deals to be done.

‘L&G remains the market leader in pension risk transfer and is able to utilise the strengths of its asset management and capital development businesses to generate long-term assets well matched to the liabilities it takes on,’ he said.

‘This potentially makes the deals more profitable for L&G than its peers.’

He added that the delivery of more pension deals ‘should provide a strong earnings boost for 2018’.

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Key stats
Market capitalisation £6,111m
No. of shares out 578m
No. of shares floating 559m
No. of common shareholders
No. of employees 2,657
Trading volume (10 day avg.) 2m
Turnover 797.91m EUR
Profit before tax 199.46m EUR
Earnings per share -0.07 EUR
Cashflow per share 0.38 EUR
Cash per share 0.89 EUR

Numis bets on strong momentum at GVC

Online gambling company GVC (GVC) has strong momentum and can benefit from US opportunities, says Numis.

Analyst Richard Stuber retained his ‘buy’ recommendation and target price of £13.76 on the stock after ‘broadly in line’ first-half results that showed third quarter trading was ‘encouraging’ despite the fact management expects excess returns to be reinvested.

‘GVC shares are up 14% and now trade on 10x full-year 2019 enterprise value / earnings, which we consider attractive for a company with strong online momentum and which is well placed to benefit from opportunities in the US,’ he said.

‘GVC remains a key pick in the gaming sector, driven by strong trading momentum, earnings support form cost synergies, medium-term US opportunities and its undemanding valuation.’

Key stats
Market capitalisation £165m
No. of shares out 65m
No. of shares floating 63m
No. of common shareholders
No. of employees 1,134
Trading volume (10 day avg.) 0.02m
Turnover £71m
Profit before tax £19m
Earnings per share 7.96p
Cashflow per share 16.90p
Cash per share 8.57p

Peel Hunt: markers of success at Ten Entertainment

Bowling operator Ten Entertainment (TEG) has all the ‘hallmarks of ongoing success’, says Peel Hunt.

Analyst Dougal Jack retained his ‘buy’ recommendation and target price of 325p on the shares after a presentation from the group.

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He said the presentation ‘contained all the hallmarks of ongoing success: strong, experiential-orientated demand growth, supply control, new innovation, and reflecting Ten’s ability to drive footfall, landlords rewarding commitment and investment’.

The ‘enhanced food menus and refurbishment’ also points towards ‘ongoing strength’, said Jack.

‘Market demand is forecast to grow at a 4% compound annual growth rate, to £250 million in 2021… Management argues the barriers to successful entry are high, and that all the demand/supply growth in the market is deriving from the top two operators, Hollywood Bowl and Ten Entertainment,’ he said.



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