Equities update: Just Eat delivers

Just Eat delivers in the UK, with US performance lacking

Adam Vettese, analyst at investment platform eToro, says: “Just Eat has continued to grow their gross transaction value in the UK and Ireland as well as Northern Europe with their strong advertising presence and UEFA partnership likely to thank for this. This has offset poorer North American performance which will once again raise questions from investors whether or not the company needs to focus its energy on Europe, as opposed to trying to compete with big hitters DoorDash and UberEats across the pond. The possible sale of Grubhub could well be the beginning of a potential exit from the North American market. 

“The food delivery sector is in a completely different territory to the pandemic-inspired euphoria that saw shares up at dizzy heights, but nonetheless at the current level Just Eat could provide value to investors, trading at a little over half of its 2023 peak. We have seen the 1500p mark provide stiff resistance this year and would need to be broken to start any kind of meaningful move upwards.”

Rio Tinto investing in growing future demand

Mark Crouch, analyst at investment platform eToro, says: “Rio Tinto have published a steady operations update this morning. With nearly all ore volumes increasing compared with Q1 2023.

“So often at the mercy of commodity prices, Rio Tinto has seen iron ore prices soften since their peak in 2021, the metal accounts for almost 80% of the mining giant’s profits. That, however, has not halted further investment. The Rio Tinto board recently approved a $6.2bn partnership investment in an iron ore mine, rail and port facilities in Guinea, which stands to be the world’s biggest mining project.

“Rio has also expanded their operations within the copper mining sector. The company’s Mongolian mine Oyu Tolgoi is on track to become one of the world’s largest copper mines by 2030. With copper prices approaching two-year highs, demand only looks set to increase, as the transition to renewable energy stays top of mind for policymakers around the world and copper’s role in that push will be crucial, something Rio Tinto is well positioned to capitalise on.”

No winter blues for easyJet as demand heats up for summer

Adam Vettese, analyst at investment platform eToro, says: “What could have been an even weaker-than-usual winter update affected by disruption to flights in the Middle East ended up being saved by Easter, which landed early this year, encouraging holidaymakers to jet off to catch some spring sunshine even if temperatures weren’t quite what they would usually be.

“Summer is the real moneymaker for easyJet and with demand remaining strong, not only for flights but for the holiday arm of the business as well, the company is on track to make up the lost revenue from cancelled flights to Israel since the conflict broke out there last October. Investors hoping for a share price take off, following a pretty flat year, have seemingly have got their wish with shares up almost 5% this morning.”

Dunelm’s margins expand in challenging environment

Adam Vettese, analyst at investment platform eToro, says: “Like all retailers, Dunelm is continuing to face familiar pressures, such as supply chain disruption in the Red Sea as well as the prospect of sticky inflation for longer than anticipated. Despite this, sales are up 3% in the period up to the end of March. They may still be feeling the pinch, but customers have not been put off and continue to be attracted to their value offering both in store and online. 

“Margins have been squeezed in previous updates so investors will be pleased to hear full year gross margin is expected to expand, especially against a backdrop of hotter inflation prints and higher rates potentially being around for longer. Shares are still some 20% off their March 2023 high.”

US market proving hard to catch for Rentokil

Mark Crouch, analyst at investment platform eToro, says: “It’s been a stop-start year for Rentokil investors, dazzled by a bumper earnings report in March, and the share price leaping 15%. Fast forward six weeks, and this morning’s earnings update has painted a somewhat mixed picture. Quarterly revenues have increased, albeit only by an underwhelming 0.9%, however the business remains on track to deliver on expectations for FY 2024.

“Following completion of what was a groundbreaking acquisition of US pest control company Terminix in late 2022, Rentokil has since faced challenges managing the transition efficiently, and on closer inspection, the business has struggled with marketing, new business sales, staff turnover and integration in the US, all of which have fallen well short of expectations.

“There are positive signs though. With the US now accounting for more than half of revenues, the company has pledged renewed efforts to achieve 2 – 4% organic growth in the region. And given Rentokil management’s past performance, investors will feel confident that in time the business will deliver on its potential and live up to its title as the world’s largest pest control company.”

Centamin investors will hope to reap rewards of the 2024 gold rush

Mark Crouch, analyst at investment platform eToro, says: “Gold miner Centamin has this morning reported gold production volumes and sales were down in the first quarter of 2024 versus Q1 23, however they fully expect production to increase into the year and have reaffirmed 2024 production and cost guidance.

“2024 has seen something of a gold rush, with the metal hitting multiple new all-time highs. Since January, Centamin’s share price has outpaced the price of gold, rising almost 25%, reaching a three-year high, compared with gold’s gains of 15%. 

“Geopolitical instability in the Middle East and Ukraine has almost certainly contributed to gold’s rise, but doubts remain over central banks’ ability to gain a handle on inflation, with CPI in the US rising for the third month in a row in March, casting doubts over rate cuts that were all but a given just a few weeks ago.

“With analysts at CITI this week projecting $3000 gold within the next 18 months, Centamin and their investors look set for a profitable year ahead.”