Market Report: Pharma stocks shine after Morgan Stanley upgrade

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Morgan Stanley injected life into the pharmaceutical sector with a wave of upgrades which boosted the big players.

GlaxoSmithKline rose 20.25p to 1371.25p and AstraZeneca ticked up 97.5p to 4613p, with target price increases across the board.

AstraZeneca, which updated investors today on its late-stage drug pipeline, benefited from a double upgrade to overweight from the heavyweight broker, which added £10 to its target price, now 5300p.

It said Astra, which has been ploughing cash into developing new drugs to offset expiring patents, “looks set to reap the rewards of heavy investment, at an attractive valuation”.

The broker has a target of 1450p for Glaxo, with the upgrades breathing life into Shire, 94p healthier at 4730p, and Hikma, 16.56p better at 2214.56p.

The FTSE 100 remained on the front foot, rising 18.64 to 6414.29, having put on around 300 points over the past two-and-a-half weeks.

Drugmakers dominated the blue-chip leaderboard, but there were plenty of movers and shakers on the mid-cap index.

AA raced up 13.8p, or 5%, to 291.7p on reports CVC, the private-equity owner of Formula One, has snapped up Carlyle’s stake in rival car-breakdown service RAC.

Pace accelerated 25.92p, or 6.4%, to 430.32p after the US regulator closed its probe into Arris’s £1.4 billion takeover of the set-top box maker. Only Brazil is left to give the deal the green light.

Over-50s travel and insurance group Saga looked frail, falling 11p to 201.2p after its largest investor slashed its stake. Acromas, which is made up of private-equity groups Charterhouse, CVC, and Permira, along with Saga employees, dumped a 13% stake at 200p a share, leaving it with just under a third of the company.


Moneysupermarket, maker of quirky ads, has been a stock-market success (Picture: YouTube)

Moneysupermarket founder Simon Nixon, who brought the company public in 2007, cashed in on the price-comparison site’s stock-market success by selling 32 million shares worth £98 million. Shares tumbled 21.21p to 307.09p.

Softcat edged down 0.85p to 280.9p following its first trading update since floating last month at 240p a share. The software firm said first-quarter revenues were up 14% to £141 million.

On AIM, Renewable Energy Generation rose 3.3p to 57.55p as it revealed the sale of the business to BlackRock for £64.5 million. The company, damaged beyond repair by the scrapping of green-energy subsidies, will be wound up and most of the cash returned to shareholders.

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December 2, 2015 |
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