Market Report: Carnival still in choppy waters

 

Ripples from the deadly capsizing of the Costa Concordia off the coast of Italy in January were still being felt by cruise ship owner Carnival yesterday.

The group, which is dual-listed in the US and London, reported continued signs of sea sickness as its profits and sales were below forecasts. It is still suffering from the effects of the disaster as fewer people decide to take cruises, and bookings for 2013 are still below last year.

Carnival, which runs Carnival Cruises and Holland America, missed analysts' forecasts for the full year and reported profit of $93m (£57m) on sales of $2.66bn, down from profit of $217m on sales of $2.82bn a year earlier.

Back in October investors had thought the worst was over when its US rival Royal Caribbean raised its full-year forecasts. But yesterday's update left Carnival's shares down 154p at 2,391p, finishing at the bottom of the index .

The blue-chip table was desperately trying to hang on to the previous day's gains, and managed to stay in positive territory until lunchtime – giving hope that the so-called "Santa Rally" could take the index to the coveted 6,000 mark by the end of the year.

An update that the US economy has grown more than expected failed to lift the mood after lunch in London and investors remained fixated on the talks about resolving the US fiscal cliff. News that these talks may have reached a stalemate sent the FTSE 100 index down 3.25 points to close at 5,958.34.

Stocks still propping up the benchmark index included engineer Weir Group, which has bought Mathena for $240m. Mathena, which provides equipment and services for oil and gas drillers, will help Weir's move into the US shale gas market.

Investec raised its price target to 2,100p and rated Weir a buy. The group has been the subject of bid chatter earlier this year with rumours that General Electric could be interested. But the rumours remained vague. The shares gushed up 51p to 1,863p.

ITV found itself at the top of the table as investors tuned in to its plans for recovery. Analysts at Galvan rated it a "buy" the previous day and the shares broadcast a 3.2p gain to 107p.

Nomura's David Hayes upgraded his price target for British American Tobacco. He thinks the group will "see the strongest organic profit development" of the sector and he raised his target to 3,880p, rating the shares a buy. But he retains Imperial Tobacco as reduce – or sell – with a target of 2,510p. BAT puffed up 15p to 3,110p and Imperial was static at 2,397p.

Could Dairy Crest be looking at stocking up its food cupboard next year? That's what Investec thinks, and Nicola Mallard at the broker reckons the milk-to-cheese group could have £100m in the kitty to feed its hunger.

Dairy Crest's shares closed at an 18-month high of 400p earlier this week, and Ms Mallard upgraded her forecasts and increased her target to 420p, rating the shares a buy.

She said the "stock has had a decent run since the release of its interim results" and the company's cost-cutting plan has convinced her to think the outlook could be better for the dairy group next year.

The company survived the milk-pricing row earlier this year, and Ms Mallard thinks it has up to £100m to spend following the sale of its French spread business St Hubert.

"It is clearly conscious it needs to spend wisely – it is replacing earnings from a very attractive business [St Hubert] and any deal also needs to enhance the growth profile of the group, all without overpaying," she said.

The group, whose brands include Cathedral City cheese, was the subject of takeover speculation at the beginning of the year after Müller snapped up rival Robert Wiseman Dairies, but for now analysts think it is more likely to be acquirer than acquired. The shares lost 6.4p to 393.6p yesterday.

The small-cap medical device maker Consort Medical has flogged King, which specialises in devices for airways, to Ambu of the US. Investec's Sebastien Jantet said the £105m price tag is well ahead of the £55m value he had attached to King, and "it should add at least 70p to the share price". The company's shares ticked up 29p to 820p.

AIM-listed Bridge Energy updated the market on its Asha oil discovery in Norway with partners Eon and Wintershall and its share price spurted up 5.5p to 105.5p.

Buy

Centamin

Snaffle some shares in gold miner Centamin, analysts at Westhouse suggest. The Egyptian-focused miner has had to deal with a series of problems but yesterday it confirmed its operations are now fully up and running at its Sukari mine. Westhouse's experts think that while the issues have eased "we anticipate that the company could encounter additional problems". They still think it is worth buying at 65p but it "is not a stock for the risk averse". The stock rose by 1.25p to 42.71p yesterday.

Sell

Darty

Ditch shares in retailer Darty, scribes at JPMorgan recommend. There are pressures on both the top line and its margins and JPMorgan's analysts think in "the near term, conditions have continued to deteriorate". They give the stock a share price target of 40p. The shares lifted 1.75p to 60.25p.

Hold

Thomas Cook

Stop selling your shares in travel firm Thomas Cook, Peel Hunt's expert reckons – it is time to hang on to them. Peel's Nick Batram said: "This is the honeymoon period for new management and sentiment towards the stock is now focused on how far and how quickly the turnaround can be delivered." He upped his share price target to 41p, up from 10p. The shares rose 2.75p to 45.5p.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific