Equities Update: Barratt, Hilton Food, Markets…

Hilton Food on road to recovery 

Adam Vettese, Market Analyst at investment platform eToro, says: “These numbers show steady progress and growth in profitability as Hilton Food Group shares creep up to their highest in 2 years. Runaway inflation caused huge problems for the business and decimated the share price from which it has recovered 100% from its lows since the turn of last year.

“The meat and seafood specialist has beefed up its cash position while getting debt levels under control, and the dividend continues to creep up, so most metrics seem to be moving in the right direction. This may give investors some encouragement that previous post-Covid highs are achievable, some 30% from where the shares are trading at the moment.”

Barratt profits tumble while snags appear in Redrow merger

Mark Crouch, Market Analyst at investment platform eToro, says: “The recent feel-good factor might be waning for Barratt shareholders after the housebuilder’s latest set of earnings. Tumbling revenues, profits and margins paint an uncertain picture for the UK’s largest housebuilder, and with home completions forecast to fall into 2025, it’s beginning to raise questions about the health of UK housing.

“The wave of optimism created by Labour’s election victory is already starting to wash away and despite pledges to remove planning restrictions and unlock unearthed potential in the UK housing sector, it would now seem the market is beginning to have doubts, with Barratt in particular on shaky ground. 

“Barratt still boasts a strong balance sheet, however, and shareholders will have been eyeing Barratt’s proposed merger with rival Redrow to further reinforce the company’s financial position, which up until a few weeks ago looked all but complete. Yet, recent intervention from the Competition and Markets Authority has left both companies in limbo, and the deal potentially in doubt altogether.”

Markets take a breath after sharp sell-off

Adam Vettese, analyst at investment platform eToro, says: “We saw a heavy sell-off on Tuesday after soft US manufacturing data rekindled anxieties over the state of the US economy. The fall in prices included a 9% slide in Nvidia along with a wider correction amongst semiconductor companies. This is a further signal that the market may be starting to re-think some frothy valuations in the cold light of economic data that suggests softening in demand.

“The FTSE 100 index began the day playing catchup after the falls on Wall Street, dropping rapidly in early morning trading, before slowly clawing back a portion of its losses. Around three quarters of the constituent stocks in the FTSE 100 were still in the red by early afternoon in London, though the falls have been far less dramatic than we saw across the Atlantic yesterday.

“There is a small ray of light in today’s monthly report from the US Census Bureau Factory orders, which provides a little bit more of an optimistic read on the manufacturing sector. The advanced report last week revealed a sizeable jump in durable goods and today’s more comprehensive release confirms that the July rebound in orders encompassed non-durable items also. US new orders rose 5%, after two consecutive months of declines, while unfilled orders increased 0.2%, and it is this rising backlog of orders that could be key  – it is a sign that is usually interpreted as an upbeat measure of current demand. After the turmoil of yesterday’s trading session, the S&P 500 has risen moderately in early trading on Wall Street.”