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FTSE 250 movers: Ultra Electronics boosted by upgrade; Hammerson hammered
London's FTSE 250 was up 0.4% to 19,856.46 in afternoon trade on Friday, with broker notes providing most of the action.
Ultra Electronics was the standout gainer as Berenberg upped the stock to 'hold' from 'sell', lifting the price target to 1,440p from 1,300p.
It said Ultra has weathered a difficult few months following the profit warning last November, the departure of the chief executive, and termination of the planned acquisition of US-based Sparton.
However, the market has now digested these developments and priced in Ultra's inherent risks, as evidenced by the selloff of around 25% in the share price since October, Berenberg argued.
Melrose Industries was also lifted by a broker note, as Goldman Sachs added the buy-rated turnaround specialist to its Conviction List. Goldman said the stock is "fundamentally undervalued" and that its share price materially underestimates potential future value creation.
"On our analysis, we highlight that GKN could be circa 40-60% earnings accretive to Melrose under a range of GKN margin scenarios by 2020," the bank said, as it reiterated its 12m sum-of-the-parts price target of 320p, which remains premised on 120p value creation from inorganic growth opportunities in addition to a 200p valuation for Melrose's existing assets."
On the downside, Hammerson slumped as French real estate investment trust Klepierre said it does not intend to make an offer for the company after its second approach was rebuffed. Klepierre said it was abandoning its pursuit "after careful consideration" as Hammerson "did not provide any meaningful engagement with respect to the increase proposal".
TalkTalk was hit a downgrade to 'sector perform' from 'outperform' by RBC Capital Markets, which cut its price target to 125p from 140p. While TalkTalk has performed well since its equity placing, the bank is concerned that BT is about to reboot its consumer strategy with a primary focus on convergence.
"Having stepped back from a converged strategy using an mobile virtual network operator, we think TalkTalk is relatively defenceless against any aggressive BT bundling, which could lead to heavy subscriber losses," RBC said.
Wood Group also took a hit on the back of a broker note, as Morgan Stanley cut the stock to 'equalweight'.
Risers
Ultra Electronics Holdings (ULE) 1,425.00p 5.95%
Hunting (HTG) 767.50p 5.21%
Capita (CPI) 148.45p 5.17%
Greene King (GNK) 552.40p 4.62%
IP Group (IPO) 133.00p 3.74%
Kier Group (KIE) 1,020.00p 3.71%
Centamin (DI) (CEY) 152.85p 3.38%
Contour Global (GLO) 248.00p 3.33%
Melrose Industries (MRO) 225.00p 3.26%
TI Fluid Systems (TIFS) 258.00p 3.20%
Fallers
Telecom Plus (TEP) 1,094.00p -11.06%
Hammerson (HMSO) 465.60p -10.46%
WH Smith (SMWH) 1,918.00p -4.96%
Cairn Energy (CNE) 215.60p -2.27%
TalkTalk Telecom Group (TALK) 121.50p -2.10%
Greencore Group (GNC) 154.00p -1.88%
Hiscox Limited (DI) (HSX) 1,476.00p -1.80%
Fidelity China Special Situations (FCSS) 236.50p -1.66%
Dunelm Group (DNLM) 560.98p -1.58%
Wood Group (John) (WG.) 549.00p -1.44%