Unfavourable Coverage

One of the blue-chip names that issued a late-August profits warning – and the largest by market cap – was  WPP (WPP). The international advertising giant saw a slowdown in sales due to reduced spending from consumer products clients. However, its place as an international market leader places it in good stead to capitalise on emerging global trends. With foreign markets now more accessible than ever for companies across the world, how can lesser known names gain an edge? Through advertising, of course. WPP shareholders will be hoping the company can subsequently cashes in. Could a late-year US dollar recovery be a further positive for bulls?

Banking on a Recovery

Barclays (BARC), which has maintained the largest presence of any UK name in the US after the financial crisis, has seen its share price fall to a 2017 low as a result of a disappointing earnings season for banks across the globe. However, while the UK banking sector remains under pressure following the Bank of England’s step back from a hawkish leap of faith, there could be some bright spots on the horizon for the bank.

After several disappointments, US Republicans will be looking to achieve at least one major congressional success before House elections in 2018. Now the healthcare bill has failed, many are hoping attention will turn to the finance sector, with Tax Reform or the repeal of the Volker rule – a ban on banks using their own money to trade – looking most likely to be pursued by the Trump administration. If they succeed, could Barclays prosper?

Refining Output

The UK 100 ’s Oilers, that together form the largest sector on the index, have been rangebound for the majority of 2017. BP (BP.) has seen its share price bounce from its channel floor and ceiling nine times. Yet this may be about to change. Could the clean-up after the devastating Hurricane Harvey, which shut a fifth of US Oil refineries, hamper US output, helping OPEC to make a meaningful dent in the global supply glut?

In Need of Medicine

Of all the UK Pharmaceuticals under pressure during the sector slowdown, Shire (SHP) has arguably suffered the most. Its share price has steadily fallen from September 2016 highs, which accelerated after US congress failed to repeal Obamacare and was capped off by the departure of its CFO in late-August. Shares have been languishing at 20-month lows, however hints of rising lows support from April 2014 lows could offer some respite for the embattled shares. Will the zero ‘sell’ ratings held by institutional brokers also help to inspire bulls?

Up in Smoke

Back in July, Imperial Brands (IMB) shares sunk alongside fellow Tobacco giant British American Tobacco after the US FDA stated it was beginning a consultation that could eventually lead to the reduction of nicotine in future cigarette products to non-addictive levels. While the notable share price sell-offs that occurred on the day – a 4.2% fall for IMB and 7% decline for BATS – were well off the session lows of -9.5% and -13.8% respectively, both stocks are yet to return to the previous session’s closing price. Will there instead be a protracted recovery?

On the following pages, we present charts, broker views and in-house technical analysis for each of these five stocks.