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FTSE 100 movers: Aviva gains; Experian hit by downgrade
(Sharecast News) - London's FTSE 100 was down 0.4% at 7,727.17 in afternoon trade on Wednesday. Experian was under the cosh after Credit Suisse downgraded the shares to 'neutral' from 'outperform' and cut the price target to 2,900p from 3,250p as it said the stock looks "fairly valued".
"One reason we believe Experian trades a higher multiple (circa 28x P/E) relative to our European payments and business services coverage is the perceived moat around the vast pools of data it collects from businesses and users to then monetise several times over," CS said.
"This moat is expected to last long into the future because of how scarce data is, or appears to be, hence extending the period before Experian fades to its terminal growth rate."
Credit Suisse said the company's long-term stated targets imply earnings per share growth in the mid-to-high single-digit range, and PEG (price/earnings-to-growth) of around 2.8x, versus around 1.8x and 1.7x, respectively, for Visa and Mastercard, which have a similar moat with $15tr+ in global transactions, and around 1.5x for Adyen, which is the bank's top pick.
"We believe that this moat will withstand competition in the coming years as data ownership returns to individuals (via Open Banking/Data), democratising the key asset Experian sells: data (circa 50% of revenues).
"In our view, Experian is a high-quality company with preferred positioning within its core markets, expanding to additional verticals, and executed a 2015-16 turnaround; however, we see it as fairly valued at current levels."
Entain was knocked lower by a downgrade to 'neutral' at Exane.
On the upside, insurer Aviva gained after it maintained its dividend guidance and capital returns outlook for the year.
FTSE 100 - Risers
Aviva (AV.) 453.50p 2.76% Lloyds Banking Group (LLOY) 51.20p 2.13% United Utilities Group (UU.) 1,074.00p 1.46% Severn Trent (SVT) 2,821.00p 1.29% GSK (GSK) 1,402.00p 1.08% Haleon (HLN) 315.85p 0.83% Hiscox Limited (DI) (HSX) 1,121.00p 0.81% NATWEST GROUP (NWG) 301.00p 0.77% Unite Group (UTG) 987.00p 0.77% Smiths Group (SMIN) 1,739.50p 0.61%
FTSE 100 - Fallers
Ocado Group (OCDO) 702.20p -4.23% Experian (EXPN) 2,865.00p -3.27% Scottish Mortgage Inv Trust (SMT) 742.60p -2.95% Croda International (CRDA) 6,836.00p -2.59% Entain (ENT) 1,520.00p -2.53% Fresnillo (FRES) 859.20p -2.21% Convatec Group (CTEC) 238.60p -2.05% BT Group (BT.A) 128.50p -1.95% Spirax-Sarco Engineering (SPX) 11,350.00p -1.90% Abrdn (ABDN) 204.90p -1.82%
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