This Week’s Trading Updates: Broker and Tipster Sentiment

It’s been a busy week in the markets, with a number of big names announcing their latest figures. In this week’s article, we cover broker and tipster reaction to a handful of trading updates that have attracted our attention over the last seven days.

Broker and Tipster Sentiment (Last Seven Days)

Big Sofa Technologies Group (BST)

3 tips; 100% Sell.

Share price since update: -50.7%

With a market cap of £3 million it’s one of the smaller companies reporting this week, but the firms latest update – on the same day it announced a capital raising – was a disaster according to tipsters. Tom Winnifrith (ShareProphets) warns that “after [the recently announced] dilution there is no way this stock will return to former glories or even its IPO price”, while Nigel Somerville (ShareProphets) rates the company as “a very disappointing sell”.

DFS Furniture (BST)

1 tip; 100% Buy.

Share price since update: -3.6%

Broker Peel Hunt remained positive towards the furniture group despite an “exceptional downturn in market demand” during its fourth quarter, which the company attributed in part to the UK summer heatwave.

EasyJet (EZY)

8 tips; 50% Buy, 37.5% Hold, 12.5% Sell.

Share price since update: -9.6%

The latest update wasn’t received well by the markets – the share price has dropped almost 10% since EasyJet published its numbers – yet the response from brokers and tipsters has been mixed.  For Royston Wild (The Motley Fool), the “bright quarterly update last week affirmed my bullish viewpoint” and Chris Bailey (ShareProphets) think it is “time to think about booking one of its flights as well as buying some of its shares”. Meanwhile, broker Berenberg slapped a sell rating on the airline’s shares and three other brokers offered a ‘hold’ rating.

Electrocomponents (ECM)

4 tips; 50% Buy, 25% Hold, 25% Sell.

Share price since update: +4.1%

The distributor’s latest update drew a mixed reception from the broker and tipster community. Miles Costello (The Times) finds the prospects “extremely good” and advised that readers buy based on the “promise of more growth and operational efficiency”. In contrast, broker Shore Capital sees the company as a Sell, and two other brokers consider the shares a ‘hold’.

Ferguson (FERG)

7 tips; 28.6% Buy, 71.4% Hold.

Share price since update: -8.4%

A majority of brokers and tipsters took a cautious stance towards the building materials distributor. Liberum Capital was the only broker to rate the shares as a buy, with four others offering ‘hold’ ratings. Asfter the announcement, Roland Head (The Motley Fool) was “happy to continue holding and might consider topping up”.

Iomart (IOM)

3 tips; 100% Buy.

Share price since update: -6.7%

Buy ratings all around for the IT firm, although that sentiment wasn’t shared by the market. Brokers Shore Capital and Peel Hunt reiterated their positive recommendations, while Peter Stephens (The Motley Fool) thinks the company has a “bright future” and offers “investment potential after a strong first half of the year”.

Revolution Bars (RBG)

5 tips; 80% Buy, 20% Sell.

Share price since update: +2.1%

The small-cap bar chain’s latest preliminary results went down well with brokers; it received four ‘buy’ ratings from Numis, amongst others. However, Kevin Godbold (The Motley Fool) offers a contrarian view; the tipster found the full-year results to be “grim reading” and found other pub operators such as J.D. Wetherspoon (JDW) to be a more attractive investment.

Royal Mail (RMG)

4 tips; 100% Sell.

Share price since update: -25.7%

The effect of GDPR was one of a number of factors that led to disappointing results from Royal Mail this week. Shares have subsequently lost over a quarter of their value, and the tipster community isn’t optimistic about the company’s future prospects either. Miles Costello (The Times) finds “…the group’s problems are plain for all to see, despite any attempts to wrap them up in prospects for growth”. Chris Bailey (ShareProphets) offers some kinder words, but sees EasyJet (EZJ) as a better pick.

Tesco (TSCO)

6 tips; 100% Buy.

Share price since update: -9.3%

From one end of the sentiment spectrum to the other, brokers and tipsters are unequivocally optimistic about Tesco’s future. This, despite the shares sliding nearly 10% since the latest earnings were announced. Four tipsters and two brokers all offered buy ratings, with Peter Stephens (The Motley Fool) considering it potentially “worth buying for the long term, with its recovery not yet complete”.

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Disclaimer: The contents of this article should not be considered financial advice. All information displayed as at 4th October 2018.