Here's a look at what industry experts have been saying about various shares this week.
1. Lloyds Banking Group – HOLD
It’s been a good week for Lloyds. It cheered the market by announcing its biggest annual profits for a decade.
The pre-tax figure was up to £4.2 billion from £1.6 billion after a significant drop in provisions for PPI compensation.
Analyst Helal Miah at stockbrokers The Share Centre said: “Record annual profits beat analyst expectations. The bank also expects the acquisition of MBNA, which was made in December 2016, will give a boost to its profits margins.”
2. Barratt Developments – HOLD
The UK’s largest housebuilder has unveiled an 8.8% rise in pre-tax profits to £321 million for the second half of 2016 – even though it actually built thousands fewer homes than the corresponding period the year before.
Analyst Clyde Lewis at Peel Hunt has the company down as a Hold.
“There was a nice surprise in the form of an increased dividend commitment, which will see the shares yield over 8% in CY17 (calendar year),” he said.
3. HSBC Holdings – BUY
Shares in HSBC fell after the bank reported a worse-than-expected fall in annual profits with the pre-tax figure coming in at £5.7 billion – down a whopping 62% on the level achieved the previous year.
However, Helal Miah at The Share Centre is upbeat. “It’s still our preference in the banking sector,” he said.
“Despite a surprise drop in Q4 revenues and profits, it expects growth to be driven by emerging markets and portrayed confidence in its outlook.”
4. Hotel Chocolat – BUY
The leading UK premium chocolate brand, it operates 90 of its own stores as well as generating 24% of sales online. Underlying momentum is strong and the management team appear to be delivering on expectations.
Interim results were ahead of expectations, resulting in 3% profit upgrades, says analyst Wayne Brown at Liberum Securities. “Outperformance in revenue growth alongside margin expansion lays the foundations for a positive outlook in H2 and beyond.”
5. Capita – REDUCE
The support services firm has written down the value of a number of historic contracts, assets that were worth around £50 million, and analyst Christopher Bamberry at Peel Hunt has attached a target price of 466p – substantially lower than its current 546p level.
“This reflects the on-going risk to forecasts, the reduced potential for M&A, which has made a material contribution to financial performance over many years, and the unfavourable mix shift post a successful disposal of Asset Services,” he said.
The information included in this article does not constitute regulated financial advice. You should seek out independent, professional financial advice before making an investment decision.