Expert share tips this week

Here’s your round up of how the experts view key stocks this week.

Marks and Spencer, Tesco and Halfords are among the companies under the spotlight this week

1. Royal Dutch Shell – BUY

Symbol: RDSB.L

Index: FTSE 100

Royal Dutch Shell share price (Image: Google)

Shareholders are currently enjoying an oil price sweet spot, with prices close to US$80 per barrel, which is feeding through to the company’s earnings.

The oil price increase has enabled the company to progress its debt reduction programme, according to Graham Spooner, investment research analyst at The Share Centre.

“Royal Dutch Shell is a recommended ‘buy for investors seeking income and willing to accept a low to medium level of risk,” he said.

2. Marks and Spencer – HOLD

Symbol: MKS.L

Index: FTSE 100

Marks and Spencer share price (Image: Google)

The British icon is struggling. As well as a 5.4% fall in adjusted profits to £580.9m, it plans to shut 100 stores by 2020 and faces the prospect of demotion from the FTSE 100.

Graham Spooner, investment research analyst at The Share Centre, said there had been optimism for long-suffering investors with the dividend being maintained.

“It’s our view that there is too much uncertainty surrounding the group to recommend it as more than a hold for medium risk investors,” he added.

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3. Halfords – SELL

Symbol: HFD.L

Index: FTSE 250

Halfords share price (Image: Google)

Graham Stapleton, the recently installed chief executive officer, has warned profits were unlikely to grow this year due to factors such as a lack of price rises in cycling.

Jonathan Pritchard, an analyst at Peel Hunt, believes the company is a clear market leader but notes how a number of CEOs and failed to solve the service puzzle at Halfords.

“We would love for Mr Stapleton to break the mould, but with the shares already pricing in success in that project, we’d argue that the risk is to their downside,” he said.

4. Tesco – HOLD

Symbol: TSCO.L

Index: FTSE 100

Tesco share price (Image: Google)

The supermarket giant announced the closure of its non-food website, Tesco Direct, placing 500 jobs at risk.

Graham Spooner, investment research analyst at The Share Centre, said that while the site’s loss appears to be a negative, the longer-term prospects were improving.

“The grocery market remains fierce and we maintain our view that shares are a solid ‘hold’ for medium risk investors with a balanced portfolio,” he said.

5. Tate & Lyle – BUY

Symbol: TATE.L

Index: FTSE 250

Tate & Lyle share price (Image: Google)

The global ingredients supplier is expected to deliver solid margin expansion this year and could be looking to strike some deals.

According to Robert Waldschmidt, an analyst at Liberum, the company has up to £960m available for bolt-on M&A activity.

“We expect Tate will now selectively examine bolt-on M&A to accelerate the group’s strategy via investments in new technologies within speciality ingredients,” he said.

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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.

 

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