FTSE 100 movers: Paddy Power Betfair surges on US Supreme Court ruling; ITV drops
London's FTSE 100 was down 0.1% in afternoon trade on Monday, although Paddy Power got a late boost following a ruling from the US Supreme Court.
Paddy Power Betfair was the standout gainer, tracking broader gains for the sector after the US Supreme Court struck down the federal law that bars gambling on individual sporting events in most of the country, in a ruling likely that will likely prompt unleash a race among the states to attract billions of dollars in legal wagers.
Ruling in a New Jersey case, the court said the 1992 law unconstitutionally forced states to maintain laws that outlaw gambling. Nevada is the only state where single-game wagering is now legal.
Analysts at Whitman Howard said sports gambling could begin in a matter of weeks in casinos and racetracks in New Jersey, which instigated the legal fight by repealing its gambling prohibition.
Catering company Compass gained as as Bernstein upped the stock to 'outperform' from 'market perform'' and lifted the price target to 1,750p from 1,650p following a recent pullback in the shares and ahead of what it reckons will be a stronger second half.
"We downgraded Compass last October on the reduced likelihood of a 2018 special dividend, caution around the new CEO and expectation ofthefirst margin drop in 12 years at the H1 results. All of this played out: there will be no special return this year, margins contracted inH1 and the stock is down 9% in the last year, underperforming the F TSE 100 by13%."
However, the second half is likely to see an improvement, Bernstein said, with 5% organic growth thanks to a continued strong North American performance and a recovery in Europe. It also thinks margins will expand again, resulting in earnings per share growth of 15%. In addition, it expects the company to pay another £1bn special dividend next May.
GlaxoSmithKline also rose as Jefferies upped its price target on the buy-rated pharmaceuticals giant to 1,650p.
UAE-based private hospital operator Mediclinic was on the front foot even as Goldman Sachs cut its price target on the neutral-rated stock to 650p from 660p.
On the downside, broadcaster ITV was the worst performer, giving back some gains after rallying last week on speculation that Liberty Global could bid for the rest of ITV it does not currently own. Traders attributed the drop to profi- taking, pointing out that the stock has come up from 145p in a straight line.
Insurer Direct Line was also under the cosh as Morgan Stanley cut its price target to 435p from 452p to reflect the payment of the FY17 dividend.
FTSE 100 - Risers
Paddy Power Betfair (PPB) 7,550.00p 6.26%
Mediclinic International (MDC) 706.80p 2.26%
Compass Group (CPG) 1,532.50p 1.62%
Shire Plc (SHP) 4,126.50p 1.58%
Coca-Cola HBC AG (CDI) (CCH) 2,558.00p 1.51%
Just Eat (JE.) 814.60p 1.34%
BP (BP.) 570.90p 1.13%
Centrica (CNA) 148.65p 1.02%
Reckitt Benckiser Group (RB.) 5,809.00p 0.92%
GlaxoSmithKline (GSK) 1,479.40p 0.89%
FTSE 100 - Fallers
Royal Mail (RMG) 610.60p -3.23%
ITV (ITV) 166.65p -3.11%
G4S (GFS) 263.60p -2.51%
Direct Line Insurance Group (DLG) 361.50p -2.46%
BT Group (BT.A) 212.45p -2.10%
Marks & Spencer Group (MKS) 287.60p -1.94%
Kingfisher (KGF) 292.20p -1.72%
Micro Focus International (MCRO) 1,280.00p -1.54%
WPP (WPP) 1,293.00p -1.37%
CRH (CRH) 2,667.00p -1.37%