Lloyds Banking sinks as Goldman Sachs downgrades shares to ‘sell’

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There are not many big share price moves today but many of those at the top and bottom of the lists are big names, including the biggest faller today, Lloyds Banking Group PLC (LSE:LLOY), which is on the back of a downgrade from Goldman Sachs (NYSE:GS),


The ‘Vampire Squid’ cut its rating to ‘sell’ and sliced its target price to 45p from 50p.


A note from Goldman also issued overnight but disseminated today, banking analysts flagged “headwinds in UK mortgage pricing“, resulting in NatWest Group PLC (LSE:NWG) being removed from their ‘conviction list’ but kept the former RBS at ‘buy’.


NatWest’s target price was trimmed to 305p from 320p, while the target for Barclays PLC (LSE:BARC) was cut to 270p from 280p for Virgin Money UK PLC (LSE:VMUK) to 210p from 225p, keeping their ratings at ‘buy’ and ‘neutral’ respectively.


Greggs PLC (LSE:GRG), up 4% to 2,828p as brokers adjust their targets for the sausage roll maker after its results yesterday.


Analysts at Barclays upped their price target to 3055p from 2790p and over at Jefferies the PT was hiked to 3400p from 3350p.


The Newcastle-based group yesterday said full-year profit will be slightly ahead of previous expectations as it swung back to an interim profit on sales of GBP546mln for the six months to 3 July – well above last year but down 9% on two years ago.


11.3am: Pendragon punctured


Car dealer Pendragon PLC’s shares have a got a flatty, down 7% to 17.1p after discouraging sales figures from UK automotive industry.


Sales of passenger cars in July came in just over 123k, according to the Society of Motor Manufacturers and Traders, which is a 29.5% decrease on the same month last year and 22% from the same month in 2019.


Private new car registrations of 59.8k, down on last year and the year before, with a combination of factory shutdowns caused by key component shortages and staff absences brought about by the “pingdemic” said to be largely behind the weakness.


Given disruption from the semi-conductor shortage as well as workers’ quarantine, the SMMT revised down its full-year forecast for a third time to 1.82mln, which would be up around 10% from last year but more than 20% down on 2019.


Pendragon is the largest independent operator of franchised motor car dealerships in the UK.


Shares in other car dealers Lookers PLC (LSE:LOOK) and Marshall Motor Holdings PLC (AIM:MMH) are up, while Cambria Automobiles PLC (AIM:CAMB) is down slightly.


9.33am: Sofa so good


Sofa seller ScS Group PLC (AIM:SCS) got off to a comfortable start to trading on Thursday, up 6% to 307p, as it reported strong trading in recent weeks as more stores reopened after coronavirus restrictions were lifted.


The final seven weeks of the year ended 31 July saw like-for-like (LFL) order growth of 23.7% compared to 2019.


For the entire 53-week period, the retailer said LFL orders were down 1.5% on last year, or 6.5% lower than 2019.


“As noted in our previous update on 16 June, the current and prior year have been impacted by regional and national store closures across the UK as a result of COVID-19. Encouragingly, when our stores have been open performance has been strong,” ScS said.


Broker Peel Hunt noted that customer behaviour is normalising “but there is still cash in pockets and they are undeterred by longer than usual lead times. They probably will not change any time soon but the potential for continued strong sales led growth persists”.


Elsewhere, Mkango Resources Ltd (AIM:MKA, TSX-V:MKA, FRA:ZMK, OTC:MKNGF) rose 9% to 27.17p as it said it will acquire the remainder of the Songwe Hill rare earths project that it doesn’t already own.


The company is also acquiring all of the Maginito business, which is a rare earth recycling business it already part-owns as part of a plan to take control of and accelerate an integrated mine-refine-recycle strategy.


Mkango will pay GBP13mln for the acquisitions, paid in paper to partner Talaxis Limited (part of the Noble Group), with the equity placing set to fund the forward plan which will include the completion of feasibility in early 2022.

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