ADVFN UK Market News

Author: Fiona Craig

  • U.S. Shares Poised for an Uneven Open as Investors Search for Direction: Dow Jones, S&P, Nasdaq, Wall Street Futures

    U.S. Shares Poised for an Uneven Open as Investors Search for Direction: Dow Jones, S&P, Nasdaq, Wall Street Futures

    U.S. equity futures are indicating a largely flat start to Wednesday’s session, suggesting that markets may struggle to find clear direction following the previous day’s technology-led selloff.

    Futures held steady even after fresh data from payroll processor ADP showed that private-sector job growth in January came in well below expectations. ADP reported that private employment increased by just 22,000 jobs last month, following a downwardly revised gain of 37,000 in December. Economists had been forecasting an increase of around 45,000 jobs, compared with the 41,000 initially reported for the prior month.

    Despite the muted reaction to the data, technology stocks could remain under pressure after a sector rotation weighed heavily on markets on Tuesday. Shares of Advanced Micro Devices (NASDAQ:AMD) are likely to be a drag, with the chipmaker tumbling 10.1% in premarket trading.

    The sharp move in AMD follows the release of better-than-expected fourth-quarter results, offset by first-quarter guidance that fell short of some analysts’ expectations.

    By contrast, Super Micro Computer (NASDAQ:SMCI) is providing a lift to sentiment within the sector. The stock is surging 9.5% ahead of the open after the company reported fiscal second-quarter results that beat estimates and raised its full-year revenue forecast.

    Wall Street closed sharply lower on Tuesday, reversing much of the prior session’s gains. All three major indexes finished in the red, led by pronounced losses in technology shares. The Nasdaq dropped 336.92 points, or 1.4%, to 23,255.19. The S&P 500 declined 58.63 points, or 0.8%, to 6,917.81, while the Dow Jones Industrial Average fell 166.67 points, or 0.3%, to 49,240.99.

    The pullback was driven largely by investors rotating out of technology, a trend underscored by the Nasdaq’s underperformance. Software stocks were among the hardest hit, dragging the Dow Jones U.S. Software Index down 3.5% to its lowest close in more than nine months.

    This weakness came despite a notable rally in Palantir Technologies (PLTR), which jumped 6.9% after the AI-focused software company delivered stronger-than-expected fourth-quarter results and issued an upbeat outlook.

    Semiconductor shares also faced broad selling pressure, with the Philadelphia Semiconductor Index sliding 2.1%. NXP Semiconductors (NASDAQ:NXPI) fell 4.5% even though the Dutch chipmaker topped expectations on both earnings and revenue.

    Outside the technology space, several sectors benefited from the rotation. Retail giant Walmart (NYSE:WMT) climbed 2.9%, pushing its market capitalization above $1 trillion for the first time.

    “It would be hard to find a better illustration of the market’s recent rotation away from tech than Walmart achieving a $1 trillion valuation for the first time,” said AJ Bell head of markets Dan Coatsworth. He added, “This bastion of Main Street joins a club which has previously only been populated by technology businesses and Warren Buffett’s Berkshire Hathaway vehicle.”

    Gold-related stocks also advanced sharply, supported by a strong rebound in bullion prices. The NYSE Arca Gold Bugs Index jumped 4.4%.

    Strength in steel, energy, and housing stocks also helped cushion broader market losses, preventing a deeper decline across U.S. equities.

  • European Shares Trade Mixed Following Eurozone Inflation Print: DAX, CAC, FTSE100

    European Shares Trade Mixed Following Eurozone Inflation Print: DAX, CAC, FTSE100

    European equity markets were mixed on Wednesday as investors digested the latest Eurozone inflation figures and looked ahead to key central bank decisions.

    Fresh data showed that inflation in the euro area slipped below the European Central Bank’s 2% target in January, helped by lower energy prices and a firmer euro. According to flash estimates from Eurostat, the harmonized index of consumer prices rose 1.7% year on year last month, in line with expectations and down from 2.0% in December.

    Core inflation, which strips out volatile items such as energy, food, alcohol and tobacco, edged down slightly to 2.2% from 2.3% in the previous month.

    Government bond yields across the region eased modestly after surveys indicated that economic momentum in the Eurozone weakened for a second straight month in January. Final data from S&P Global showed that private sector activity expanded at its slowest pace since September, weighed down by softer growth in services.

    The final composite output index came in at 51.3 in January, below both the preliminary estimate and December’s reading of 51.5. While the index remains above the 50 mark—signaling expansion—it points to more subdued growth, albeit for a thirteenth consecutive month.

    Attention now turns to central bank meetings on Thursday. The European Central Bank is widely expected to keep interest rates unchanged, with markets focusing on its assessment of the growth and inflation outlook. The Bank of England is also anticipated to leave rates on hold, with any revisions to its economic forecasts likely to be limited.

    In equity markets, Germany’s DAX was down 0.4%, while France’s CAC 40 gained 0.9% and the UK’s FTSE 100 rose 1.2%.

    On the corporate front, Novo Nordisk (NYSE:NVO) slid sharply in Copenhagen after CEO Mike Doustdar pointed to headwinds from significantly lower U.S. pricing for its blockbuster weight-loss drug Wegovy. Shares in Swiss drugmaker Novartis (NYSE:NVS) also moved lower after the company warned of a decline in profits this year.

    Banco Santander (LSE:SAN) fell after the Spanish lender agreed to acquire Webster Financial Corp. in a $12 billion transaction. French bank Credit Agricole (EU:ACA) also dropped following a 39% fall in fourth-quarter profit.

    Germany’s Infineon Technologies (TG:IFX) traded lower after announcing plans to step up investment in data-center technology to meet rising demand for artificial intelligence solutions.

    On the upside, UK pharmaceutical group GSK (LSE:GSK) advanced after reporting stronger-than-expected fourth-quarter profits. Beazley (LSE:BEZ) shares surged after Zurich Insurance Group reached an agreement in principle on the key financial terms of a potential cash offer for the London-based specialty insurer.

  • Gold Rebounds Above $5,000 an Ounce as Renewed Iran Tensions Revive Safe-Haven Flows

    Gold Rebounds Above $5,000 an Ounce as Renewed Iran Tensions Revive Safe-Haven Flows

    Gold prices surged back above the $5,000-an-ounce threshold in Asian trading on Wednesday, as fresh signs of strain between the United States and Iran reignited investor demand for traditional safe-haven assets.

    The metal built on a strong rebound from Tuesday’s session, with bargain hunting continuing after last week’s sharp sell-off that erased more than $1,000 per ounce from prices.

    Spot gold climbed 2.3% to $5,060.28 an ounce by 01:17 ET (06:17 GMT), while April gold futures rose 2.9% to $5,078.96 an ounce.

    Iran-related risks resurface ahead of nuclear negotiations

    Geopolitical concerns were a key catalyst for the renewed strength in gold, particularly after reports overnight that U.S. forces shot down an Iranian drone over the Arabian Sea. In a separate incident, Iranian patrol boats were reportedly seen approaching a tanker linked to the United States in the Strait of Hormuz.

    These developments undercut earlier comments from officials in Tehran and Washington indicating that talks scheduled for Friday would proceed. News of the planned negotiations had previously eased market anxiety and dampened demand for gold as a refuge.

    Recent losses in gold were largely driven by expectations that U.S. President Donald Trump’s nominee to lead the Federal Reserve, Kevin Warsh, would pursue a less accommodative policy stance than markets had hoped. That outlook boosted the U.S. dollar and weighed on precious metals, while profit-taking also set in after gold surged to a record high near $5,600 an ounce last week.

    Even after the pullback, gold remains up nearly 15% so far in 2026.

    Analysts at ANZ said in a recent note that the underlying drivers of gold’s strength—safe-haven demand, physical buying and central-bank purchases—continue to provide solid support.

    Silver and platinum advance; OCBC expects gold strength to endure

    Other precious metals also moved higher on Wednesday, extending a recovery that began in the previous session. Spot silver gained 2.8% to $87.4955 an ounce, while spot platinum jumped 3% to $2,286.72 an ounce.

    “The rebound suggests that forced selling and margin-driven liquidation pressures may have eased, at least temporarily,” OCBC analysts wrote in a note. They cautioned, however, that the recovery remains fragile, noting that “sensitivity to the USD, yield repricing and uncertainty around Fed policy under new leadership remains elevated.”

    Even so, OCBC described the recent slump in gold prices as a phase of normalization rather than a “trend reversal.” The brokerage said ongoing central-bank buying, alongside persistent geopolitical and fiscal risks, should continue to underpin gold’s role as a safe haven.

    Silver is also expected to benefit from its dual role as both a precious and industrial metal. OCBC reiterated its end-2026 price targets of $5,600 an ounce for gold and $133 an ounce for silver.

  • Oil Prices Rally More Than 1% on Rising U.S.–Iran Tensions and Sharp U.S. Stock Draw

    Oil Prices Rally More Than 1% on Rising U.S.–Iran Tensions and Sharp U.S. Stock Draw

    Crude prices climbed strongly on Wednesday during Asian trading, supported by escalating frictions between the United States and Iran that have renewed fears of supply disruptions in the Middle East. Gains were reinforced by industry figures pointing to an unexpectedly large decline in U.S. crude inventories, after extreme winter conditions curtailed output.

    Brent crude for April delivery rose 1.2% to $68.15 a barrel, while U.S. West Texas Intermediate advanced 1.4% to $63.69 a barrel by 21:01 ET (02:01 GMT).

    Geopolitical flare-ups add risk premium to oil

    Market concerns intensified after reports that U.S. forces downed an Iranian drone approaching an American aircraft carrier in the Arabian Sea. Separately, Iranian patrol boats were said to have moved toward a U.S.-flagged tanker in the Strait of Hormuz, one of the world’s most critical oil transit corridors.

    The incidents came just ahead of planned talks between Washington and Tehran later this week. However, doubts have emerged after Iranian officials reportedly sought to restrict the scope of the negotiations—scheduled for Friday—to bilateral discussions focused solely on nuclear issues, casting uncertainty over whether the talks will proceed.

    U.S. President Donald Trump has warned of further military action should Iran refuse to comply with U.S. demands to scale back its nuclear program, while Tehran has threatened severe retaliation in response to any American aggression. Any escalation in the region could jeopardize crude flows from the Middle East, a risk that has continued to underpin oil prices.

    Unexpected U.S. inventory draw adds support

    Oil markets also drew strength from data showing a much steeper-than-expected decline in U.S. crude stockpiles. Figures from the American Petroleum Institute indicated that inventories fell by 11.1 million barrels in the week ended January 30, compared with expectations for a 0.7 million-barrel increase.

    API figures often provide an early signal of trends in official government inventory data, which are due later in the day. The sizable draw was attributed to severe cold weather across parts of the United States, which disrupted oil production and hampered exports from the Gulf Coast.

    Supply interruptions in the U.S. have been an additional tailwind for crude prices in recent weeks, reinforcing gains driven by heightened geopolitical risk.

  • Bitcoin Retreats Toward $76k After Liquidation Wave Sends Prices to 15-Month Lows

    Bitcoin Retreats Toward $76k After Liquidation Wave Sends Prices to 15-Month Lows

    Bitcoin (COIN:BTCUSD) hovered near its weakest levels in more than a year on Wednesday after a sharp sell-off briefly dragged the cryptocurrency toward the $73,000 area, triggering widespread liquidations amid a broader pullback from risk assets.

    The largest digital token was last down 2.8% at $76,509.1 as of 01:56 ET (06:56 GMT), after touching an intraday low of $73,004.3 — a level not seen since November 2024.

    The latest decline extends a steep downtrend. Following the weekend’s slide, Bitcoin has fallen almost 12% over the past week, after posting a roughly 10% drop the week before. The move has pushed prices to their lowest point since Donald Trump’s U.S. election victory, unwinding gains that had been built on hopes of a friendlier regulatory environment for the crypto sector.

    Forced selling accelerates as Bitcoin hits 15-month low

    The downturn coincided with heavy forced liquidations in leveraged markets. Data from crypto analytics provider CoinGlass showed that nearly $740 million worth of long positions were wiped out over the past 24 hours, as falling prices triggered margin calls and compelled traders to unwind bullish bets.

    Bitcoin’s weakness marks a stark reversal from the rally seen late last year, when the token surged following Trump’s election win. At that time, investors poured into cryptocurrencies on expectations that a new U.S. administration would take a more accommodating stance toward digital assets. Additional support came from Federal Reserve rate cuts that began in December 2024, which boosted appetite for higher-risk investments.

    More recently, however, sentiment has shifted. Gold and other traditional safe havens rebounded on Wednesday as geopolitical tensions between the United States and Iran intensified. At the same time, crypto markets are grappling with fresh uncertainty around U.S. monetary policy after Trump nominated former Federal Reserve governor Kevin Warsh as the next Fed chair. Warsh is widely viewed as hawkish, fuelling concerns about tighter liquidity conditions.

    Crypto prices today: altcoins under pressure, Cardano drops 6%

    Losses across the broader digital-asset market outpaced Bitcoin’s decline, with most major altcoins trading lower.

    Ethereum, the second-largest cryptocurrency, slipped 2.3% to $2,268.92, while XRP edged down 1.1% to $1.59. Solana fell 6%, Cardano dropped by a similar margin, and Polygon declined about 3.5%.

    Among meme tokens, Dogecoin was marginally lower, down 0.2%.

  • Tech Shares Slide as Alphabet Earnings Approach; Gold Regains Ground: Dow Jones, S&P, Nasdaq, Wall Street Futures

    Tech Shares Slide as Alphabet Earnings Approach; Gold Regains Ground: Dow Jones, S&P, Nasdaq, Wall Street Futures

    U.S. equity futures edged higher, even as a sharp downturn in software stocks continued to weigh on market sentiment and investors braced for earnings from the biggest technology names. Attention is firmly on Google parent Alphabet (NASDAQ:GOOG), which is set to report quarterly results after the market opens, with its artificial intelligence spending plans expected to be a key focus. Elsewhere, reports said Federal Reserve Governor Stephen Miran has stepped down from his role as a White House economic adviser, while fresh data on U.S. services activity is due and gold prices have climbed back toward $5,100 an ounce.

    Futures edge up despite tech sell-off

    U.S. stock futures traded modestly higher early Wednesday as markets balanced renewed pressure on AI-linked software shares against anticipation of results from mega-cap technology companies.

    By 02:53 ET, Dow futures were up 134 points, or 0.3%, S&P 500 futures had added 19 points, or 0.3%, and Nasdaq 100 futures were higher by 57 points, or 0.2%.

    Wall Street closed sharply lower in the previous session, led by steep declines in AI heavyweights Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT), both of which fell close to 3%. Sentiment toward software stocks has weakened in recent days, as investors grow increasingly concerned about rising competition from newly launched AI models.

    Those worries intensified after artificial intelligence firm Anthropic unveiled a new legal-analysis tool, triggering heavy selling in publishing and data-related stocks such as Thomson Reuters (NYSE:TRI) and LegalZoom (NASDAQ:LZ). The sell-off quickly spread across the broader software sector, dragging down names including PayPal (NASDAQ:PYPL) and Expedia Group (NASDAQ:EXPE), each of which dropped more than 10%. According to the Wall Street Journal, two S&P indices tracking software, financial data and exchange companies collectively lost around $300 billion in market value.

    “[T]he defining development was the collapse in technology stocks, as investors increasingly view AI as a net negative. Companies heavily exposed to aggressive infrastructure investment are no longer benefiting, while concerns about AI-driven disruption and displacement are eroding large portions of the market,” analysts at Vital Knowledge said in a note.

    Not all shares were under pressure, however. Walmart (NYSE:WMT) stood out after a surge in its stock pushed the retailer’s market capitalization above $1 trillion for the first time, supported by continued market-share gains among price-conscious consumers.

    Alphabet in the spotlight

    With volatility rippling through the software sector, markets are now turning their attention to Alphabet’s earnings report later in the day. Investors are expected to closely scrutinize the group’s costly push into artificial intelligence, including multibillion-dollar investments in data centers and specialized chips.

    Alphabet shares rallied around 29% in the final quarter of 2025, driven by positive reception of its latest Gemini AI model and a partnership with Apple to enhance the iPhone maker’s Siri voice assistant. Analysts cited by Reuters have suggested that Alphabet has now taken the lead in the race to develop and commercialize AI technologies, overtaking competitors such as Microsoft.

    “Google sentiment is (justifiably) very bullish, as the company’s core advertising businesses continue to deliver strong results while it emerges as the best-positioned player across the AI ecosystem,” Vital Knowledge analysts said. They cautioned, however, that it remains unclear whether strong earnings will stabilize broader AI sentiment or instead amplify concerns about the resilience of the ecosystem surrounding rivals like OpenAI.

    Further insight into the technology landscape may come on Thursday, when Amazon (NASDAQ:AMZN) is scheduled to report results. Outside the tech sector, pharmaceutical giant Eli Lilly (NYSE:LLY), which has made significant bets on weight-loss treatments, is also among the notable companies reporting ahead of the U.S. market open.

    Reports: Miran exits White House adviser role

    Media reports indicated that Federal Reserve Governor Stephen Miran has resigned from his position as a White House economic adviser, fulfilling a commitment he previously made to the U.S. Senate.

    The move allows Miran—appointed last year by President Donald Trump to temporarily fill a vacancy on the Federal Reserve Board through January 31—to remain at the central bank until a successor is confirmed.

    “I promised the Senate that if I remained on the Board beyond January, I would formally depart the Council,” Miran wrote in a resignation letter cited by several outlets, adding that it was “important to honor my word.”

    Since joining the Fed, Miran has been a vocal proponent of aggressive interest-rate cuts, frequently diverging from the views of other policymakers. His stance has aligned with Trump’s calls for rapid rate reductions to stimulate the economy, drawing criticism from some Democratic senators who have urged his “immediate” resignation from the Fed board.

    U.S. services data ahead

    Last month, the Federal Reserve opted to keep interest rates unchanged in a range of 3.5% to 3.75%, despite dissent from Miran and Fed Governor Christopher Waller. While there are signs of softening in the labor market, inflation has remained above the Fed’s 2% target, reducing the urgency to resume the aggressive rate-cutting cycle seen in 2025.

    With the monthly jobs report delayed earlier this week, investors will focus on other indicators, including January data on U.S. services activity. The Institute for Supply Management’s non-manufacturing purchasing managers’ index is expected to come in at 53.5, down from 54.4 previously. Readings above 50 signal expansion.

    Gold climbs back toward $5,100

    Gold prices moved higher on Wednesday, approaching $5,100 an ounce, as renewed tensions between the United States and Iran boosted demand for safe-haven assets.

    The precious metal extended gains after rebounding sharply from earlier losses in the prior session.

    Safe-haven demand was reinforced by reports that the U.S. shot down an Iranian drone that approached a U.S. aircraft carrier in the Arabian Sea. Separately, Iranian gunboats were seen near a U.S.-linked tanker in the Strait of Hormuz.

    These developments cast doubt on earlier comments from Tehran and Washington suggesting talks would take place on Friday. News of the planned discussions had previously eased market anxiety and weighed on gold prices.

  • European Markets Tick Higher as Earnings Roll In; UBS Steals the Spotlight: DAX, CAC, FTSE100

    European Markets Tick Higher as Earnings Roll In; UBS Steals the Spotlight: DAX, CAC, FTSE100

    European equities edged modestly higher on Wednesday, with investors weighing a fresh round of corporate earnings while looking ahead to closely watched eurozone inflation data later in the session.

    By 08:02 GMT, Germany’s DAX was up 0.2%, France’s CAC 40 had added 0.4%, and the UK’s FTSE 100 was trading 0.3% higher.

    Earnings season in focus, UBS stands out

    The sharp decline in precious metals seen late last week has stabilised, allowing markets to refocus on the busy earnings calendar. Several large European corporates are due to report in the coming days, keeping company results firmly in the spotlight.

    UBS (NYSE:UBS) impressed investors after reporting a 56% jump in net profit, comfortably beating forecasts. The performance was driven by strong contributions from both wealth management and investment banking. The Swiss lender, the world’s largest wealth manager, also said it plans to buy back at least $3 billion of shares in 2026—matching last year’s programme—and signalled an ambition “to do more.”

    GSK (LSE:GSK) also drew attention after projecting slower sales growth in 2026 in the first outlook delivered by its new chief executive, Luke Miels. The drugmaker is shifting its strategic focus toward strengthening its pipeline as it prepares for future patent expiries affecting key HIV treatments.

    Novartis (NYSE:NVS) said it expects operating profit to fall by a low single-digit percentage in 2026, citing mounting pressure from lower-cost generic competition, including on established products such as heart drug Entresto.

    In the banking sector, Banco Santander (LSE:SAN) reported a 12% increase in attributable profit for 2025, marking its fourth straight year of record results, supported by resilient net interest income and record fee generation.

    Meanwhile, Crédit Agricole (EU:ACA) posted a 24% drop in fourth-quarter net income after a sizable first-consolidation charge linked to its Banco BPM stake weighed on results, despite record revenues for the year and a proposed dividend increase.

    Attention will also turn to Wall Street later in the day, with markets awaiting results from Alphabet (NASDAQ:GOOG) after the close. The group is expected to report a 15.5% rise in revenue to $111.37 billion, with investors keenly focused on its 2026 spending plans, cloud demand outlook and updates on AI capacity constraints.

    Eurozone inflation data ahead

    Away from earnings, preliminary eurozone inflation figures for January are due later on Wednesday, just ahead of the European Central Bank’s policy decision. Consensus expectations point to headline inflation easing slightly to 1.7% year on year, comfortably below the ECB’s 2% target.

    The central bank is widely expected to leave interest rates unchanged at 2% for a fifth consecutive meeting. However, a significant deviation from expectations could unsettle policymakers, who have recently voiced concerns about the euro’s rapid appreciation against the dollar and its potential disinflationary impact.

    Oil prices extend gains

    Oil prices continued to edge higher, supported by geopolitical tensions between the United States and Iran, which have raised concerns about potential supply disruptions from the region.

    Brent crude futures for April added 0.1% to $67.40 a barrel, while West Texas Intermediate rose 0.2% to $63.38. Both benchmarks had climbed nearly 2% in the previous session.

    Reports on Tuesday said the US had shot down an Iranian drone approaching a US aircraft carrier in the Arabian Sea, while Iranian gunboats were also observed near a US-flagged tanker in the Strait of Hormuz. The incidents came just ahead of scheduled talks between Washington and Tehran this week, casting doubt over whether the discussions will proceed as planned.

  • FTSE 100 Rises as Oil Shares Advance; GSK and Beazley Draw Attention

    FTSE 100 Rises as Oil Shares Advance; GSK and Beazley Draw Attention

    UK equities opened higher, with sentiment improving after AI-related concerns that pressured software stocks in the previous session began to fade. Strength in oil majors, alongside company-specific news from GSK plc (LSE:GSK) and takeover target Beazley PLC (LSE:BEZ), helped lift the benchmark index.

    Energy stocks provided the largest boost to the FTSE 100, as BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL) moved higher in line with rising crude prices. Oil markets were supported by escalating tensions between the US and Iran, underpinning gains across the sector. By 0934 GMT, the blue-chip index was up 0.6%, while sterling strengthened 0.1% against the dollar to $1.3710. Elsewhere in Europe, Germany’s DAX slipped 0.5%, while France’s CAC 40 rose 0.4%.

    In UK stock-specific news, Beazley shares jumped 8.5% after the insurer received a takeover approach from Zurich Insurance Group valuing the business at about £8 billion. Zurich’s sixth proposal offers 1,335 pence per share, made up of 1,310 pence in cash plus permitted dividends of up to 25 pence for the year ended December 31, 2025, representing a 4.2% increase on its prior bid.

    GSK was also in focus after the drugmaker outlined a slower pace of sales growth for 2026. The company expects revenue to rise between 3% and 5% on a constant-currency basis, compared with 7% growth in 2025, while core earnings per share are forecast to increase by 7% to 9%. Vaccine sales are projected to range from a low single-digit decline to “stable.” GSK shares rose more than 1% following the update.

    Watches Of Switzerland Group PLC (LSE:WOSG) reported strong third-quarter trading across both the US and UK during the Holiday period, noting that demand for its core luxury brands continues to outstrip supply in both markets.

    DCC plc (LSE:DCC) said it delivered solid operating profit growth in its fiscal third quarter, supported by organic growth and the initial contribution from its Austrian acquisition FLAGA, while reiterating its full-year outlook for good profit growth.

    Meanwhile, SSE PLC (LSE:SSE) maintained its guidance for 2025/26 adjusted earnings per share of 144–152 pence. The midpoint of the range sits around 2% below market consensus, which the company attributed to mixed weather conditions affecting renewable generation, despite otherwise strong operational performance.

  • DCC Delivers Solid Q3 Profit Growth and Holds Full-Year Guidance

    DCC Delivers Solid Q3 Profit Growth and Holds Full-Year Guidance

    DCC Plc (LSE:DCC) reported strong operating profit growth in its fiscal third quarter, supported by organic expansion and the initial contribution from its Austrian acquisition FLAGA. The update was well received by the market, with shares rising more than 2% on the day.

    The group reaffirmed its full-year expectations for good operating profit growth, while highlighting continued strategic progress and active development across the business. Within DCC Energy, the Solutions division delivered solid operating profit growth, driven by a strong performance in Energy Products, although this was partly offset by tougher trading conditions in UK Energy Services. The Mobility division posted what analysts at RBC Capital Markets described as “excellent organic profit growth.” Weather patterns, which have a significant impact on heating demand in Energy Products, were broadly in line with the prior year.

    At DCC Technology, operating profit on a continuing basis was broadly unchanged year on year. The North American operation returned to growth during the quarter following a challenging first half, a development viewed positively by RBC analysts ahead of a potential disposal. The company has committed £100 million to mergers and acquisitions so far this year, up from £59 million in the first half, and management said the pipeline of energy-sector acquisition opportunities remains robust. Progress on the planned disposal of the Healthcare division is also said to be on track.

    Consensus forecasts put full-year operating profit at £622 million, closely aligned with RBC’s £621 million estimate, while underlying earnings per share consensus stands at 425 pence compared with RBC’s forecast of 430 pence. Despite the recent share price weakness following a tender offer, DCC closed at 4,640 pence on Tuesday, trading on a calendarised 2026 price-to-earnings multiple of 9.5 times, enterprise value to EBITDA of 5.9 times, a free cash flow yield of 7.1% and a dividend yield of 4.8%.

    RBC continues to value DCC using a sum-of-the-parts approach, applying a 2027 EBITA multiple of 6.5 times to the Technology division, in line with peers, and 10 times to the Energy businesses, reflecting a 15% discount to peers due to the group’s conglomerate structure and relatively limited scale in renewables. The broker reiterated its “outperform” rating and 5,400 pence price target, implying around 16% upside.

    Key risks highlighted include execution risk around the group’s merger and acquisition strategy, which has been central to its growth, as well as seasonality, given the sensitivity of LPG and Retail & Oil demand to weather conditions. Foreign exchange movements also remain an important factor, with around 45% of revenue and 55% of profit generated outside the UK.

  • GSK Flags Slower Top-Line Momentum for 2026 in First Outlook Under New CEO

    GSK Flags Slower Top-Line Momentum for 2026 in First Outlook Under New CEO

    GSK (LSE:GSK) said it expects sales growth to moderate in 2026, forecasting revenue growth of between 3% and 5% on a constant-currency basis, down from the 7% increase delivered in 2025. The guidance marks the company’s first forward outlook since the appointment of chief executive Luke Miels.

    The group said core earnings per share are expected to increase by 7% to 9% in 2026. Vaccine sales are projected to range from a low single-digit decline to being “stable,” while Specialty Medicines revenue is anticipated to grow by a low double-digit percentage. General Medicines sales are forecast to sit between a low single-digit fall and “stable,” reflecting mixed demand trends across the portfolio.

    The outlook comes as GSK looks to navigate upcoming patent expiries linked to its leading HIV treatments by broadening and strengthening its drug development pipeline. “2026 will be a key year of execution and operational delivery,” Miels said in a statement.

    For the fourth quarter of 2025, GSK reported core earnings per share of 25.5 pence as turnover rose 8% to £8.62 billion. Total operating profit jumped 65% to £1.1 billion, lifting the operating margin to 12.8%, an improvement of 4.6 percentage points. On a core basis, operating profit increased 18% to £1.63 billion, with the core operating margin rising to 19%, up 1.6 percentage points.

    Commenting on the full-year performance, Miels said: “GSK delivered another strong performance in 2025, driven mainly by Specialty Medicines, with double-digit sales growth in Respiratory, Immunology & Inflammation (RI&I), Oncology and HIV.”