Yahoo Finance Trending tickers: Shell l Nvidia l Entain l Games Workshop Group
A look at the stocks making headlines on Wednesday
Shell (SHEL.L)
Shares in Shell edged lower on Wednesday after the company announced it was boosting its dividend and cutting its future spending ahead of an investor day in New York.
It's all part of new chief executive Wael Sawan’s efforts to “simplify” the energy giant and increase investor confidence.
Shell revealed plans to increase shareholder distributions to 30-40% of cash flow from operations, up from a previous target of 20-30%.
The FT reported that the group will start with a 15% increase in its dividend from the second quarter and at least $5bn of share buybacks in the second half of the year.
Read more: FTSE 100: Shell to cut spending and raise dividends
Shell also said it will be reducing capital spending in 2024 and 2025 to $22-25bn a year, down from a planned $23-27bn in 2023.
“One area of initial disappointment may be on the dividend,” RBC analyst Biraj Borkhataria said in a note. “From our conversations into the event, we believe market consensus was for around a 20% increase,” Bloomberg reported.
Victoria Scholar, head of investment at Interactive Investor, said the oil giant also reiterated its climate targets including becoming net-zero by 2050.
“But it is keeping its oil output unchanged until 2030 and is aiming to retain its spot as the world leader in LNG,” she added.
Scholar also noted that Shell’s shares have been modestly lower over the past 12 months.
“They peaked in March and have largely been under pressure ever since. Underlying oil prices have been weakening with brent crude shedding around a third over the past year, weighed down by concerns about the weaker global demand outlook.”
Nvidia (NVDA)
Shares in Nvidia were up nearly 4% in the US after the company closed on Tuesday with a $1tn valuation for the first time.
The computer chip designer first reached the huge milestone on 30 May when its shares passed the threshold level of $404.87, but were unable to close above that mark until Tuesday.
It puts the company in the elite club with Apple, Amazon, Microsoft, Alphabet, Meta (then known as Facebook) and Tesla, whose stocks have also all achieved $1tn valuations.
Nvidia has become one of the biggest winners of the artificial intelligence (AI) boom, with its graphics processing units, or GPUs, critical to generative AI platforms like OpenAI’s ChatGPT and Google’s Bard, making the company a key supplier for companies trying to build something with AI.
Read more: UK economy returns to growth with 0.2% expansion in April
Moreover, its last quarterly earnings report noted over $2bn in profit in three months. Significantly, the company forecast $11bn in sales for the second quarter of fiscal 2024 alone.
Matt Britzman, equity analyst at Hargreaves Lansdown, recently told Yahoo Finance that Nvidia is arguably the most high-profile benefactor of the recent AI craze.
“Nvidia has long been a leading player in the chip business, traditionally making graphics cards for gaming. But the AI revolution has revealed a new use, and it's much more lucrative. Amped-up versions of its chips are essential for powering AI and machine learning systems – ChatGPT, a popular example, runs on Nvidia chips. These next few quarters will be vital, if competitors don't get their acts together, we could quickly see Nvidia build somewhat of a monopoly in this segment, and that's what investors are hoping for,” he said.
Entain (ENT.L)
Shares in Entain were down nearly 10% on Wednesday putting it at the bottom of the FTSE 100 index after after the betting company announced a deal to buy Poland-based sports betting operator STS holdings.
Late on Tuesday the company said it will pay 24.8 Polish zlotys ($5.97) for each STS share in a £750m ($946m) deal.
It comes as the Ladbroke-owner faces a hefty fine from Her Majesty's Revenue & Customs (HMRC) following a four-year investigation into bribery allegations, relating to a former subsidiary in Turkey.
The sports betting and gaming firm, which owns brands such as bwin, Coral, Ladbrokes, PartyPoker and Sportingbet, said at the beginning of the month that it was in deferred prosecution agreement (DPA) negotiations with the Crown Prosecution Service (CPS) and is working towards achieving a resolution on the HMRC investigation.
Entertain has acknowledged that historical misconduct involving former third-party suppliers and former employees of the group may have occurred.
"While the company cannot say at this stage what the consequences of the investigation will be, it is likely that they will include a substantial financial penalty which is yet to be determined," the company said in a statement.
Games Workshop Group (GAW.L)
Shares in Games Workshop Group got a boost of nearly 5% in early trade on Wednesday after the company reported that it expects its revenues and profits to grow in the year 28 May 2023.
The board game manufacturer and retailer said in a trading update that it expects revenues to be no less than £440m, up from £387m the year prior. It also said it expects pre-tax profits to be no less than £170m compared to £157m 12 months earlier.
However, it said it expects licensing income to fall by about £3m to £25m.
The company said it has paid roughly £11m in cash payments to staff in recognition of their contribution to the results.
Games Workshop Group also highlighted that it has paid £136m in dividends in the year at 415p per share, compared to £93m at 285p per share.
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