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Deliveroo
“Troubled investors who backed Deliveroo at its IPO will have been keeping their fingers crossed for a bit of kangaroo action with the share price following its latest trading update. Alas there is no hopping forward on this news, despite impressive growth figures,” says Russ Mould, Investment Director at AJ Bell.
“Chief executive Will Shu has thrown cold water over earnings expectations, taking a cautious view because the company doesn’t know how easing of lockdown restrictions will affect trading.
“There are two ways of looking at this situation. First, Deliveroo could see a drop in demand as more people are able to get out and about, particularly going out for meals rather than sitting at home waiting for the food delivery driver to arrive.
“Second, the company has no doubt been told by its advisers that it is better to under-promise and over-deliver in the first year as a listed company. Deliveroo’s reputation has already been shattered because of the big share price drop straight after listing. It doesn’t want to risk another slump by being too aggressive with earnings guidance and failing to meet it.”
Markets
“Mining stocks have come to the rescue, helping the FTSE 100 advance 0.3% to 6,962. Iron ore prices have been picking up again on tight near-term supply, helping to drive up the likes of Rio Tinto, BHP and Anglo American.
“Diageo also continues to push forward, having recently been stuck in a tight trading range. Its share price managed to break out of this trend at the start of April and keen chart-watching investors have been latching on to this event ever since. A price target upgrade from a big investment bank also helped the stock on Thursday, pushing up Diageo 1%.
“The mid cap FTSE 250 index continues to set new record highs, rising 0.3% to 22,429 thanks to a mixture of builders’ merchants, housebuilders and airlines. Investors are buying these sectors to play the reopening trade and a general recovery in interest for UK stocks after a long period of being in the doldrums.
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