UK Prime Minister Rishi Sunak has expressed his belief in cutting taxes “carefully and sustainably” in a speech ahead of Wednesday’s Autumn Statement. Sunak cited the recent fall in inflation figures to 4.6% as a reason why tax cuts could be possible. He emphasized the importance of implementing these cuts based on fiscal rules and in line with the forecasts of the Office of Budget Responsibility. Sunak acknowledged that tax cuts would require discipline and prioritization.
Meanwhile, RBC Capital Markets has upgraded the stock of Ashtead, a company in the investor “no-fly zone” due to its financial leverage and troubles in the Nordic region. The proposed disposal of Kotsovolos in Greece will leave Ashtead with a net cash position. Additionally, the company retains a strong market position and is ripe for consolidation, making its valuation undemanding.
Goldman Sachs has predicted that Standard Chartered will outperform its bank peers over the next two years, with a double-digit EPS compound annual growth rate (CAGR) and a 2.7 percentage point improvement in return on equity (ROE). Goldman Sachs identified several drivers of this outperformance, including the unwind of loss-making hedges, a brighter non-funds income outlook, and a focus on the corporate office/HQ function. The capital at the top end of the target range and slow balance sheet growth also provide opportunities for continued buy-backs.
Shares in estate agency Foxtons have risen by 7.2% following reports that shareholders are pushing for a sale of the business. Milkwood Capital, which owns about 4% of the company, is the latest shareholder to demand a sale. The Canadian investor Converium Capital has also been lobbying for a strategic review of Foxtons.
Outsourcer Capita has seen its shares rise by 4.1% after securing a new contract to manage the Civil Service Pension Scheme for the Cabinet Office. The 10-year deal, worth £239 million, will begin in September 2025.
Ashtead, a company in the FTSE 100, has issued a profit warning, leading to a 12% drop in its shares. The warning is expected to result in a decline in Ebitda estimates for 2024 and pre-tax profit forecasts, primarily due to higher-than-expected depreciation and interest charges. However, analysts at Liberum believe these factors are one-off in nature, and long-term drivers such as the transition from owning to renting, mega-projects, and industry consolidation are still intact.
Overall, the UK stock market has seen a mix of positive and negative developments, with potential tax cuts, upgrades for Ashtead and Standard Chartered, demands for a sale of Foxtons, and a new contract for Capita. Investors should closely monitor these developments to make informed decisions.
More detail via Investing.com UK here… ( Image via Investing.com UK )