Plumbing supplies group Wolseley was pumped yesterday after an upgrade to “buy” from Citigroup. Buyers chased shares in the Plumb Center owner, up 93p to 4,300p, as analyst Ami Galla suggested the stock could hit 4,725p, a big improvement from his old target price of 4,100p.
Mr Galla reckons concerns about a rise in interest rates in the US, which is Wolseley’s best-performing business, might dampen investor spirits in the near future, but he expects the stock to climb further down the road.
Meanwhile, the Citi analyst predicts a gradual improvement next year in the UK and Europe, where Wolseley has struggled.
He added: “We see value in the shares on a medium-term view, relatively speaking, supported by a strong balance sheet and its strategy to gain share and deliver higher margins benefiting from its operating leverage.”
Depressed industrial metals prices spelt more misery for mining stocks. Heavyweight BHP Billiton was among the laggards, down 16.5p to 1,133.5p, with commodities giant Glencore hitting a new low, down 2.85p at 170p.
The price of Brent crude dropped below $50 a barrel again as the oil majors sapped more life from the FTSE 100, which eased 0.44 points to 6,550.3. BP, down 1.1p at 378.15p, and Shell, down 2p at 1,812p, made their presence felt.
Wm Morrison shed 2.1p to 175.7p as the supermarket group looks to offload 160 of its struggling convenience stores. The smallest of the so-called “big four” chains has held talks with private equity firms over a possible sale, letting it focus on the turnaround of the main supermarkets business.
Rumours of a break-up of Tui propelled the tour operator up 19p to 1,181p. Brands such as hotelbeds.com and Crystal Ski Holidays are said to be in line for a separate listing following last year’s merger of the British business Tui Travel and its German majority shareholder Tui AG. Deutsche Bank helped the shares yesterday as it lifted its target price from 1,235p to 1,385p.
On AIM, new contracts lifted the online payments group Eckoh, which last month failed to take over Netcall, by 1.75p to 40.75p.Reuse content