FTSE 250 movers: Wood Group rallies despite TP cut by Berenberg; IP Group slides

18th Nov 2024 14:31

(Sharecast News) - FTSE 250 (MCX) 20,339.38 -0.67%

Analysts at Berenberg slashed their target price on engineering and consulting business John Wood Group from 150.0p to 60.0p on Monday, stating an independent review into its projects business had created "substantial uncertainty".

Berenberg noted that Wood Group issued a "weak" Q3 update on 7 November, with the shares trading down roughly 60% since. Although 2024 underlying earnings guidance was maintained, Wood's reference to "significant" free cash flow from 2025 was dropped.

Most notably though, Berenberg noted that an independent review has been launched to determine whether any prior-year adjustments were required on contracts in Wood's projects business, creating significant uncertainty.

"Based on a sum-of-the-parts valuation, we estimate that the current share price effectively implies no value for the projects business. Given the recurring issues within this business, including historical write-downs, exceptional cash outflows and now the uncertain outcome of the review, we believe that this is not unreasonable until more clarity is provided," said Berenberg, which reiterated its 'hold' rating on the stock.

"We still think that the market requires evidence of actual FCF generation in 2025 before credit will be given for any turnaround in the underlying business."

Hochschild, Endeavour Mining and Centamin both shone as gold prices advanced.

Weapons maker Babcock gained on increasing geopolitical tensions as US President Joe Biden lifted a ban on Ukraine using American-made long range missiles against Russia.

IP Group fell despite its portfolio company AMSL Aero - based in Australia - announcing that its Vertiia electric vertical take-off and landing aircraft (eVTOL) had completed its first untethered flights.

FTSE 250 - Risers

Wood Group (John) (WG.) 53.00p 6.00%

Centamin (DI) (CEY) 146.50p 4.12%

Hochschild Mining (HOC) 217.00p 3.58%

PayPoint (PAY) 842.00p 3.19%

W.A.G Payment Solutions (WPS) 87.80p 2.33%

Babcock International Group (BAB) 520.00p 2.06%

Endeavour Mining (EDV) 1,559.00p 1.96%

Burberry Group (BRBY) 923.00p 1.85%

Discoverie Group (DSCV) 671.00p 1.67%

TBC Bank Group (TBCG) 3,240.00p 1.57%

FTSE 250 - Fallers

IP Group (IPO) 42.65p -6.16%

PureTech Health (PRTC) 161.60p -5.83%

Syncona Limited NPV (SYNC) 102.20p -4.31%

Wizz Air Holdings (WIZZ) 1,385.00p -3.82%

Marshalls (MSLH) 322.50p -3.73%

Bridgepoint Group (Reg S) (BPT) 325.20p -3.27%

SSP Group (SSPG) 152.10p -3.12%

Senior (SNR) 145.60p -2.80%

Ocado Group (OCDO) 311.40p -2.75%

Foresight Solar Fund Limited (FSFL) 79.30p -2.70%