Here's your latest share tips roundup where the experts reveal which companies they're buying, selling or holding this week.
FirstGroup, easyJet and Naked Wines are among the companies under the spotlight this week.
1. EasyJet – BUY
Index: FTSE 250
Staff shortages are continuing to cause problems for airports and airlines, including increased turnaround times and flights being cancelled.
This is not good for easyJet, which is otherwise seeing robust demand and good forward bookings, according to Alexander Paterson, an analyst at Peel Hunt.
“Given continuing robust demand, and the importance of foreign holidays to consumers, we believe demand can remain strong enough, but see further cost pressures,” he said.
2. Safestore – BUY
Index: FTSE 250
The self-storage provider’s latest financial results were in line with expectations as revenue in the six months to April 2022 increased by 14.6% to £101 million.
According to Chris Spearing, an analyst at Liberum, the company has enough pricing power to push through inflation-busting rate growth.
“Rising long-term demand for storage space, above-average barriers to entry with latent occupancy upside and visible pipeline of new stores all underpin long-term growth potential at Safestore,” commented Spearing.
3. DS Smith – ADD
Index: FTSE 100
Packaging business DS Smith has revealed it’s been enjoying continued strong demand for its boxes.
Although there are headwinds on the cost side, such as energy, the company’s pricing mechanisms are proven, according to Harry Philips, an analyst at Peel Hunt.
“The structural drivers from e-commerce and the switch away from plastics, along with a tighter focus on investment into higher-growth markets and regions, are reflected in a current year expectation of 2%-4% growth in box volume,” he said.
4. Naked Wines – SELL
Index: FTSE AIM UK 50 Index
The online wine retailer’s success in the first few months of the pandemic is increasingly being regarded as just a ‘Covid bump’, according to industry experts.
The company has struggled to attract quality new customers, particularly in the United States, over the last 18 months, according to Wayne Brown, an analyst at Liberum.
“We see Naked Wines struggling to achieve 20% sales growth in the medium-term,” commented Brown.
“Margin at maturity may also struggle to reach double-digits, which leads to our ‘sell’ rating.”
5. FirstGroup – BUY
Index: FTSE 250
The transport group’s disposal of its North American business means it will become a focused UK bus and rail operator.
According to Paterson, full-year 2022 results were better than predicted, while current trading is in line with expectations.
“First Bus passengers, including concessions, has reached 76% of the equivalent full-year 2019 period with Wales lagging the rest of the UK due to a later relaxation of restrictions,” he said.
The information included in this article does not constitute regulated financial advice. You should seek out independent, professional financial advice before making any investment decision.
*This article contains affiliate links, which means we may receive a commission on any sales of products or services we write about. This article was written completely independently.
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