Yahoo Finance Trending tickers: Intel l TSMC l Bellway l Centrica l Ashtead
A look at the stocks making headlines on Tuesday
Intel Corporation (INTC)
Shares in Intel were up nearly 3% on Tuesday after closing up nearly 6% the previous day as it was reported that the US tech giant is in talks with SoftBank Group Corp's Arm to be an anchor investor in the chip designer's initial public offering (IPO).
A source "familiar with the matter" told Reuters that Arm plans to sell its shares on the Nasdaq later this year, seeking to raise between $8bn (£6.36bn) and $10bn.
Arm’s designs are used in the manufacturing of chips that are made by many top semiconductor companies, including Intel and Nvidia.
The chip designer filed for a US stock market listing in April, which would set the stage for one of this year's largest IPOs.
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In other Intel news, the FT reported on Sunday that its request for higher subsidies for its €17bn chip plant in Germany has been refused by the country’s finance minister on affordability grounds.
Intel was due to receive €6.8bn in government funding for its new chip-making complex in the city of Magdeburg. However, due to higher energy and construction costs, it is now demanding about €10bn, the newspaper said.
The new site is part of the group’s $88bn investment drive across Europe.
Taiwan Semiconductor Manufacturing Company (TSM)
Investors will also be keeping across TSMC stock, up again today by 1.35%, following a report that increased AI-related orders from Nvidia (NVDA) have allowed the semiconductor manufacturing company to increase use of its capacity significantly.
Meanwhile, Bloomberg reported on Tuesday that the company is set to regain its $500bn market capitalisation as investors ramp up bets on a bottom in the memory chip market.
“Asia’s most valuable company is less than $1bn away from that milestone after hitting that level intraday on Tuesday. A 32% gain this year has placed TSMC among the world’s 10 biggest companies by market capitalisation after overtaking Visa Inc. in late May,” Bloomberg said.
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Moreover, investor excitement in the artificial intelligence (AI) sector has also helped a rally in tech shares.
“Whatever your view on Artificial Intelligence, it has certainly captured the media’s attention and more companies with exposure to AI are significantly gaining in anticipation that it will lead to productivity breakthroughs and benefits for society as a whole,” Giles Coghlan, chief market analyst consulting for HYCM, recently told Yahoo Finance.
Meanwhile, Morgan Stanley has raised its price target for TSMC, citing higher demand for energy-efficient and low-cost AI custom chip designs.
Bellway (BWY.L)
Shares in Bellway were down nearly 3% on the FTSE 250 on Tuesday after the British housebuilder reported renewed slowdown concerns as a further climb in mortgage rates and broader cost-of-living pressures suppressed demand in the sector.
The company said in a trading statement that a lower reservation rate during the trading period from 1 February until 4 June has resulted in a reduced forward order book of £1.71bn, compared with £2.40bn a year earlier.
Oli Creasey, equity research analyst at Quilter Cheviot, commented on the latest update from Bellway.
“Not much has changed for Bellway since it reported its half year results, and management have reiterated core guidance for the full year: 11,000 completions, slightly down on 2022, and an average sale price of £300k. That sale price is -5% compared to the average for 2022, and the average in the first half of the year, but this fall in sale price is largely driven by a change in house types being sold (ie: more social houses) rather than a significant fall in house prices overall.
“However, despite trading holding up fairly well, like the rest of the housebuilding industry, Bellway has suffered at the hands of the current economic picture.”
Creasey also noted that Bellway has beaten expectations regarding its balance sheet, with the forecast that the company will end its full-year 2023 (FY’23) with around £200m of cash on the balance sheet being ahead of analyst’s expectations.
Centrica (CNA.L)
Shares were also lower in Centrica on Tuesday, by 1.41%, despite the UK’s biggest energy supplier reporting that it expects “significantly higher” first-half adjusted operating profit than in previous years.
The British gas owner said in a company statement ahead of its annual general meeting that its performance over the first five months of the year has been strong overall.
As a result, Centrica said it expects its full-year group adjusted earnings per share to come near the top end of a predicted range between 16.5 and 24.7 pence per share.
"Uncertainties remain over the balance of the year, including the impacts of weather, commodity prices, the economic environment, any changes to regulation or government policy, asset performance and the competitive backdrop for our energy supply businesses," Centrica also said in the statement.
The company will publish its interim results on 27 July.
AJ Bell investment director Russ Mould, commented: “Unlike some utility suppliers, Centrica has been spared much pain during the energy crisis because it benefited from its wholesale business.
“The company has done some things well during the period – the performance of its energy-producing assets has been good and this has made up for the easing of gas and electricity prices this year.
“Before 2022 the British Gas operation saw significant churn amid strong competition, yet much of that competition has now exited the market, putting Centrica in an enviable position. The question now is whether political and regulatory pressure will intervene to upset the apple cart.”
Ashtead Group plc (AHT.L)
Shares in Ashtead Group were also trading lower on Tuesday despite the industrial equipment rental company, based in London, reporting higher annual revenue and profit.
It said adjusted profit before tax increased to $2.27bn from $1.82bn a year earlier, while overall revenue rose 24% to $9.67bn.
The FTSE 100 company, which trades under the name Sunbelt Rentals, said it was helped by strong demand from businesses looking to rent its construction and industrial equipment, especially in the US, where its revenue rose by 27% to $8.22bn in the year ended 30 April.
Russ Mould also commented: “Record levels of revenue and profitability are proof that Ashtead’s business model continues to work wonders, benefiting from the structural growth of customers preferring to rent rather than own equipment.
“The company has taken advantage of significant infrastructure spend across the US and this trend looks intact for the foreseeable future.
“However, if one were to pick holes in its results it would probably be declining profit margins in the UK and Canada. Investors are also nervous about a potential dip in demand should the US enter recession, hence why the share price has been volatile this year,” he said.
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