Yahoo Finance Market report: QinetiQ rises high on analyst upgrade
Defence contractor QinetiQ shouldn’t be tarnished with the same brush as profit warning-hit rival Ultra Electronics, analysts at Berenberg warned, putting a rocket up the former’s shares and lifting it off a two-and-a-half-year low.
QinetiQ was dragged down along with the rest of the UK defence industry after Ultra admitted that it will miss sales and growth targets.
QinetiQ, whose shares crash-landed in the summer after warning of its own orders slowdown, has been unjustifiably oversold, analyst Charlotte Keyworth argued in her upgrade to “buy”.
She added that a buying opportunity has been created after a spate of shorting activity against UK aerospace and defence stocks following Ultra’s 29pc plunge over two days. Keyworth’s comments boosted QinetiQ 16.5p, or 8.2pc, to 218p.
Elsewhere, Sage’s move to cloud-based subscription services sent shares in the UK ’s second-largest tech firm sky high.
A 41pc jump in pre-tax profit marked the end of a two-year transformation plan, but after climbing as much as 4.3pc in intraday trade, shares drifted back down to just a 7p gain at 782p.
Waste management specialist Biffa nudged up 4.8p to 255p after reassuring investors that it will continue its spending spree with between £25m and £30m to be set aside every year to snap up firms and a “healthy pipeline” of acquisitions already lined up.
Royal Mailgained 12.1p to 411.4p after Morgan Stanley gave a less gloomy assessment of the embattled deliverer’s letter and parcel volumes ahead of the crucial festive period. Analyst Penelope Butcher warned that the FTSE 250 firm’s fate still lies in the macro outlook and the outcome of its bitter pensions dispute with unions.
Another former state monopoly, BT, rose 1.7pc after its mobile arm EE scored a court victory over Ofcom. The regulator may have to return hundreds of millions of pounds in spectrum licence fees to operators after the Court of Appeal ruled against its 2013 decision to treble bills.
Elsewhere on the mid-cap index, catering company SSP wooed investors with a special dividend.
Its shares jumped 51p to 658p despite admitting that growth will slow. London’s precious metal miners soared as gold and silver prices climbed in anticipation of more cautious minutes from the US Federal Reserve’s latest policy meeting.
Acacia Mining surged 15.7p to 197.7p while Mexico-based producer Fresnillo climbed 56p to £13.49.
The wider blue-chip index pared early gains to finish just 7.68 points higher at 7419.02 as the global rally on markets took a breather and the pound brushed aside the OBR’s grim outlook for the UK, rising 0.4pc against the dollar to flirt with the $1.33 mark.
