Domino’s Pizza shares delivered a substantial gain on Tuesday after the pizza delivery company received an upgrade from equity analysts at Jefferies.

Jefferies upgraded Domino’s Pizza shares to ‘buy’ from ‘hold’ and raised their price target to 430p from 410p. The Domino’s Pizza share price was 6% higher at the time of writing.

“We see upside from higher growth, supported by our regional store screening analysis,” Jefferies said in a note.

Domino’s is expanding its footprint across the UK, ensuring more areas are covered by an outlet, which will likely lead to additional revenues in the future.

“Domino’s Pizza got a boost from a positive broker note whereby Jefferies upgraded its rating on the stock from ‘hold’ to ‘buy’, citing new management, improved growth prospects and easing cost inflation,” said Russ Mould, investment director at AJ Bell.

“It might feel as if there is a Domino’s store in just about every major town and city in the UK, but Jefferies is confident it can add a further 360 stores and make money from them. The idea of paying £20 for a takeaway pizza might give some people the chills yet Domino’s has shown there are still ways to shift large volumes even when the economy is going through a more lacklustre period.”

The FTSE 100 reversed early losses on Tuesday as a strong session for Barclays and InterContinental Hotels helped support the index.

London’s leading index had started the session in the red, with miners dragging the index lower as copper prices fell. However, traders saw the dip in the mining sector as a buying opportunity, and miners trended higher off their worst levels as the session progressed.

An improvement in the miners compounded substantial gains for Barclays and InterContinental Hotels, and the FTSE 100 was trading 0.15% higher at the time of writing.

Barclays stole the headlines after the UK banks announced a £1bn share buyback and £2bn in cost-cutting measures. These two developments helped mask falling profit in the last quarter and declining net interest margins. The bank also said it would return £10bn to shareholders by 2026.

“There is a common theme among companies: increase dividends and cut costs to keep shareholders happy. Staff might not appreciate this strategy as it means they may have to do additional work for the same pay, but running a leaner machine is the playbook for corporates when there is an uncertain economic outlook,” said Russ Mould, investment director at AJ Bell.

“Barclays is the latest to follow this path as it announces yet another business reorganisation, a lower cost-to-income ratio target and a goal to return £10 billion to shareholders via share buybacks and dividends over the next three years.

“The news has gone down well with the market and has helped Barclays’ share price burst back to life after a long period in the doldrums.”

Lloyds and HSBC will report earnings later in the week.

InterContinental Hotels

InterContinental Hotels staged a quiet recovery from the pandemic and is now in full-blown growth mode, with revenue rising 17% in 2023 compared to the year prior. Growth was robust across North America and Europe while Greater China stormed ahead.

The group plans further expansion in China with 500 hotel openings to add to its 700 already in place. This would make Greater China a substantial part of IHG’s business in terms of room numbers.

“Safe to say the pandemic hangover is truly over for Intercontinental Hotels Group with over $1bn on its way back to shareholders via buybacks,” said Adam Vettese, analyst at eToro.

“Despite the cost of living crisis, it seems there has been no lull in demand for leisure spending with travel stocks in general having an outstanding 2023. Along with a portfolio of brands consumers can know and trust, this helped IHG shares rocket 68% last year.

“We expect to see macro conditions begin to ease up, which certainly will not stifle the appetite for leisure spending. In fact, with more disposable cash in consumers’ pockets as inflation continues to ease, it’s quite likely we will see the firm build on its 2023 success.”

Predator Oil & Gas shares sank on Tuesday after the company ran into trouble in phase 1 of the rigless testing of its onshore gas asset.

Predator said rigless testing with small perforating guns encountered formation damage and will now pursue phase 2 testing using Sandjet. The company said they were confident the next stage of testing would establish gas flow.

Predator has encountered operational constraints in recent months and rescheduled works as a result. Today’s long-awaited update will not have been the one investors – who will now await further testing results – were hoping for.

The company had previously alluded to phase 2 being the critical stage in testing but that has not softened the blow for investors.

“The Phase 1 rigless testing programme has confirmed our long-standing plans to use Sandjet to better target a number of zones of interest identified by the NuTech petrophysical interpretation. The presence of potentially deep formation damage caused by heavy drilling mud has re-confirmed the necessity to test these zones for which the wireline logs are likely to have been impacted by the invasive drilling mud,” said Paul Griffiths, Executive Chairman of Predator.

“We are very confident that we can design the Sandjet testing parameters to extend beyond the zone of formation damage.”

Investors appear not to share this confidence and shares were down over 30% at the time of writing.

The company said there were no changes to the discretionary working capital available to carry out the testing programme.

Predator did not, however, say whether the working capital available would be enough to complete the planned programme or, indeed any additional work required in light of today’s setback.

There is no suggestion Predator is facing capital constraints but to mention available working capital alongside today’s disappointing developments would suggest the company is conscious of funding requirements.

“Resources estimates remain unchanged and there are no changes to available discretionary working capital to carry out the Sandjet testing programme. We are however fully aware that we need to flow gas from our main zones in the most effective manner after accounting for formation damage, and we have confidence in Sandjet achieving that objective,” Paul Griffiths said.

Horizonte Minerals shares sank on Tuesday after announcing that the capital required to complete construction of its Araguaia nickel project in Brazil has increased to approximately $1 billion, up 87% from previous estimates of $537 million.

The revised cost-to-complete (CTC) estimate and construction schedule were prepared by G Mining Services, a mining construction and engineering firm. G Mining estimated the capital needed to finish construction, commission the Araguaia project, and deliver first metal would be around $454 million. When combined with prior spending, this brings the total estimate at completion (EAC) to $1.004 billion.

Horizonte said it expects to achieve mechanical completion of Araguaia in the first quarter of 2026 under the revised schedule.

Horizonte Minerals shares were down 59% at the time of writing.

The company appointed Graham Crew as interim Chief Operating Officer to oversee the review process and construction plans. Horizonte also said it is in discussions with major shareholders and lenders to restructure debt facilities and secure full financing for the project.

The news will come as a hammer blow to investors who will now have to wait many years for the first production and face the uncertainty of how Horizonte will actually get there.

“Since our last update, a significant volume of work has been completed to develop a new Project Execution Plan, develop a realistic mine plan and business plan, all while continuing to proactively engage with the Company’s cornerstone shareholders, senior lenders, vendors and contractors as well as the community and local authorities,” said interim CEO Karim Nasr.

“While the new Cost-to-Complete is higher than previously announced by the company, it is now built on solid methodologies, which is a testament to the hard work undertaken to date by the whole Horizonte team.”

Barclays shares rose on Tuesday after the London-listed bank announced an additional £1bn share buyback and £2bn in cost cuts by 2026.

Barclays shares rose 4% in early trade as investors chose to focus on the buyback and cost-cutting measures and looked past lower total income and revenue that missed estimates.

The group said it planned to return £10bn to investors by 2026.

Additional share buybacks almost always please investors, but Q4’s total income of £5.6bn compared to expectations of £5.8bn highlights the challenging environment banks are now operating in.

That said, while the announcement of £2bn in cost savings wasn’t a total surprise, the swift and decisive action taken by Barclays to help bolster the bottom line will be welcomed by investors concerned about the prospect of lower net interest margins in the coming periods.

For the full year, Barclay’s net interest margin was 3.98%, reflecting a higher interest rate environment. However, Q4 group net interest margin fell to 3.83% after peaking at 4.06% in Q2. This represents the impact of higher competition for savings deposits and expectations of rate cuts in 2024.

With net interest margins past their peak for the current hiking cycle, cost-cutting measures are crucial for maintaining profitability.

In terms of non-operating and one-off costs incurred during the period, Barclays has set aside cash for redundancies and bad US debts. These non-recurring costs weighed on profits during Q4 and may explain why investors chose to focus on future cost-cutting instead of recent profitability.

“There’s a shakeup at Barclays. It’ll now report through five distinct operating divisions with accountability as a key focus. Investors will hear more later today when the company dives into details,” said Matt Britzman, equity analyst, Hargreaves Lansdown.

“Fourth quarter performance was a little worse than expected, largely because of higher costs associated with the restructure. There was some concern that this could impact the buyback, but Barclays has put that to bed with a £1bn plan, ahead of expectations.”

“Medium-term guidance was positive and points to around 54% of today’s market cap being returned to investors by 2026. But there may be some who question whether it’s a little optimistic, especially relating to growth expected from the investment bank. Barclays’ huge presence in the investment banking world is an attractive proposition. But conditions are still poor and low activity in the capital markets continues to weigh on performance.”

The FTSE 100 was trading within a tight range on Monday with little in the way of fresh catalysts to invigorate substantial moves in stocks. This, however, may prove to be short-lived.

In addition to Federal Reserve minutes due to be released on Wednesday, investors will digest a raft of FTSE 100 earnings and those of US AI superstock Nvidia.

Antofagasta, Barclays, BAE Systems, Glencore, HSBC, Rio Tinto, Anglo American, Hargreaves Lansdown and Lloyds will all report full or half year results this week. Not only do these stocks account for a large proportion of the FTSE 100 index, they are tremendously cyclical and have the potential to set the tone for trading across the entire UK equity space.

Consider that Nvidia will report results this week as well; this may be a week driven by bottom-up traders as opposed to broader macro influences and the persistent focus on interest rates may take a back seat.

“The FTSE 100 made a sluggish start to trading on Monday, lacking some direction amid the absence of big corporate or economic releases,” said AJ Bell investment director Russ Mould.

“That changes later in the week when the minutes of the latest Federal Reserve meeting are released and the AI stock Nvidia unveils its latest quarterly results. There is little margin for error for the chip specialist given the supercharged surge in its share price which has continued into 2024.

“Nvidia’s weight in the market and ties to the dominant theme has driven equities over the last year or so, which means whatever it comes out with will have wider ramifications for investors.

AstraZeneca

AstraZeneca was the FTSE 100’s top riser at the time of writing on Monday after the pharma giant said it had received positive results from trials of its lung cancer drug, Tagrisso.

Susan Galbraith, Executive Vice President, Oncology R&D, AstraZeneca, said: “These highly impactful results for the LAURA trial in this potentially curative early lung cancer setting further entrench Tagrisso as the backbone therapy for EGFR-mutated lung cancer.”  

Tagrisso is a significant revenue generator for AstraZeneca, and today’s announcement further cements the drug as a primary oncology therapy.

AstraZeneca shares were 3.1% higher at the time of writing.

Rolls Royce was not far behind, with a 3% gain ahead of its earnings on Thursday this week.

Centrica was the FTSE 100 biggest faller after Jefferies cut its price target on the stock to 150p.