Daily market update: International Consolidated Airlines, Dell, Rightmove

“The countdown to Trump’s tariffs coming into force is now in the final few days and investors have got the jitters,” says Russ Mould, Investment Director at AJ Bell.

“Trump likes to make threats and stand his ground, hoping the other side blinks first and doesn’t put up a fight. The tariff recipient countries will be working hard over the weekend to finalise their game plan – do they retaliate or not?

“This uncertainty has unnerved markets and we saw a big sell-off on Wall Street last night, including what turned out to be a miserable day for Nvidia. The chip giant ended the day more than 8% lower as its results failed to reassure investors that it can fight off growing competition and deal with customers either going it alone or seeking solutions to reduce their overall AI costs.

“Asia followed the US with a sea of red, but futures prices imply a calmer end to the week for the US with a small recovery in the S&P and Nasdaq. Meanwhile the FTSE 100 slipped back 0.4% as strength in industrials was more than offset by weakness in energy and basic materials.

“BP continued to decline after disappointing the market with its policy reset earlier this week. Many investors were hoping for BP to say it would be the Green Terminator and declare ‘Oil be back’, with no more money spent on renewables. Instead, we had a halfway house where BP said it would do more oil but still keep its foot in the green door with up to $2 billion renewable investments a year.”

International Consolidated Airlines (IAG)

“More dividends, more share buybacks; it’s remarkable how far International Consolidated Airlines has travelled since the depths of the pandemic when it was drowning in debt.

“Having nursed its balance sheet back to good health, the airline operator has got itself in a comfortable enough position to reward shareholders while continuing to invest in expanding its fleet of aircraft.

“It has enjoyed growth in revenue, operating profit, free cash flow and margins – everything that an investor hopes a company will do. So far so good, but the outlook might not be as rosy as IAG implies.

“It flags strong customer demand yet concerns about the global economic outlook imply stormier weather for airlines.

“Consumers might not feel as flush with their cash, while business travellers could look to do more meetings virtually if their employer is seeking cost efficiencies.”

Dell

“Like a laptop with a flickering screen, investors didn’t like how Dell failed to deliver a full picture of health. Earnings beat estimates for the fourth quarter in a row, yet revenue missed forecasts and forward guidance fell short of what analysts had pencilled in.

“Electrical retailers have recently been getting excited about the prospect of new AI-led computers and phones, seeing them as a catalyst for consumers and businesses to upgrade their kit. Dell would be a beneficiary, yet it implies the upgrade cycle has yet to kick in properly. It suggests this will be a story for the second half of the year which will be a big disappointment to investors.”

Rightmove

“Property listings site Rightmove painted an encouraging picture of the outlook for 2025 alongside its latest results, implying a reasonable level of confidence the UK property market is emerging from a tough period.

“Being the market leader creates a virtuous circle for Rightmove. Its site has the most listings and is therefore the one which prospective property buyers will go to when looking for their next home. This reinforces its position as a must-have product for estate agencies and provides it with significant pricing power when it comes to securing subscriptions from agencies.

“However, agents can only be squeezed so far, with the competitive threat heightened thanks to US firm CoStar’s purchase of rival On The Market in late 2023. Rightmove is trying to address this through innovation – analysing data to provide its customers with more valuable insights. This is reflected in a significant increase in its headcount, in particular in technology-related roles.

“Having rebuffed bid interest from Rupert Murdoch’s REA vehicle last year, Rightmove is under pressure to deliver for shareholders and the latest numbers go some way towards doing that.”

Pearson

“Pearson has made some decent strides in recent times as it transitions from analogue to digital. Once reliant on selling big, expensive academic textbooks, the company has achieved a leading role in online learning.

“Profit for the year came in at the top end of expectations with strong growth in English language learning. Management signalled a degree of confidence in the outlook as it announced a £350 million share buyback and a 6% uplift in the final dividend.

“Alongside the numbers, the company has announced an expansion of its existing tie-up with Amazon’s AWS cloud computing operation. AWS will support Pearson to further integrate AI into its offering.

“Pearson has already brought in innovations like an AI tutor which helps children with their homework, and an assessment tool for teachers to help them with lesson plans. While there will be excitement about the potential, investors will increasingly want to see evidence of how AI is delivering returns for the business too.”

These articles are for information purposes only and are not a personal recommendation or advice.