MARKET REPORT: UBS improve a reprieve for troubled AstraZeneca

Recent clouds hovering over AstraZeneca lifted slightly as analysts at UBS raised their rating for the drugs giant to neutral, from sell.

The change follows a 24 per cent drop in Astra’s share price in three months, triggered by investigations in China and disappointing trial data for a cancer drug.

While UBS acknowledged uncertainties around Chinese scrutiny, it said long-term prospects there remain intact. 

China probe: Astrazeneca’s share price has fallen 24% over the past three months triggered by investigations in China and disappointing trial data for its cancer drug Dato-DXd

The analysts highlighted continued regulatory approvals as a sign of sustained confidence. China represents 13 per cent of Astra sales but contributes less to profitability.

But the analysts left their target price unchanged at 11,300p, so shares slipped back 0.6 per cent, or 55p, to 9969p.

Following data showing that UK inflation had risen back above the Bank of England’s target rate, the FTSE 100 closed down 0.2 per cent, or 13.95 points, at 8085.07, while the FTSE 250 fell 0.9 per cent, or 182.86 points, to 20,244.76.

Water companies flowed higher led by Severn Trent, which rose 1.4 per cent, or 38p, to 2727p, as it doubled its half-year profit, announced a solid dividend hike and pledged a record year for capital investment.

United Utilities added 0.6 per cent, or 6.05p, to 1103p and Pennon gained 1.1 per cent, or 6p, at 574p. 

A recent note from analysts at Barclays, that warned the sector could be affected by the woes of Thames Water, was sidestepped.

Stock Watch – Made Tech

Robust trading has lifted digital services provider Made Tech.

At its annual general meeting, chairman Joanne Lake said sales bookings for the current financial year have reached £37.5million, already surpassing the £36million recorded for the whole of the previous year.

The company, which serves the UK public sector, credited strong momentum in the first half for its improved performance. Made Tech rose 23 per cent, or 4.25p, to 22.75p.

But negative broker comment affected SSP Group, which fell 1.7 per cent, or 2.7p, to 154.5p as analysts at JP Morgan downgraded their rating for the Upper Crust owner to neutral, from overweight.

Helios Towers dropped 4.9 per cent, or 5p, to 96.4p as Danish pensions group ATP sold 50.6m shares in the telecoms masts firm at 94p each. 

On the results front, Rotork was flat at 314.6p as the engineer said its performance in the four months to the end of October was in line with expectations, with all three divisions increasing their order intake.

But Churchill China fell 15.2 per cent, or 125p, to 700p after the AIM-listed ceramics manufacturer warned of weaker-than-expected profitability for 2024.

Also among the small caps, Proton Motor Power fell 57.7 per cent, or 0.65p, to 0.18p as the fuel cells and fuel cell electric hybrid systems developer said it believes the best course of action is to wind down the business as the funds it needs to continue beyond 2024 is unlikely to materialise. It intends to cancel its listing.

Mirriad Advertising dropped 41.8 per cent, or 0.11p, to 0.16p after the in-content advertising firm warned of significantly reduced revenue expectations for 2024.

And James Cropper tumbled 10 per cent, or 25p, to 225p as the composites and packaging group said tough trading conditions would now mean annual profits only matching the previous year.

But on the upside, Silver Bullet Data Services shot 8.1 per cent, or 4p, higher to 53.5p after the company reported a record-breaking performance in October and positive trading momentum.