3 FTSE Shares Being Crushed Today

Published in Investing on 4 July 2012

Halfords (LSE: HFD) downgraded, Carillion (LSE: CLLN) hit by construction fears.

After a few good days of rises, the FTSE 100 (UKX) wavered short of the 5,700 level this morning, falling 15 points in early trading to 5,672. That's still up 31 points on the week, though, and follows on from a strong seven days last week, which saw the UK's index of biggest shares throw off recent eurozone worries.

But a few individual downturns hit the FTSE indices today, partly driven by falling sentiment in the construction sector. We look at three early fallers...

Halfords

Halfords Group (LSE: HFD) dropped 19.9p, for a 9% fall to 209p this morning, after Barclays (LSE: BARC) downgraded its price target for the shares. The new target of 350p is down on its previous level of 385p, but it's still way ahead of the current price, and it's still rated as "overweight" (which means "buy").

Still, any downgrade for a falling stock is usually met with selling-off, and coming after other City forecasts had been downgraded, the fears of an unsustainable dividend added to Halfords' woes. The shares are now down more than 40% over the past 12 months.

The fall puts the forecast dividend on a yield of 9.5% now, so there's room for it to be cut but still leave a decent payout.

Carillion

A trading update from construction services company Carillion (LSE: CLLN) disappointed the market today, and the shares fell 11.5p (4%) to 271p.

The firm reiterated its belief that first-half revenues will be lower than in the same period last year, but told us that trading is still in line with expectations and that it is on track to achieve full-year profit estimates.

But the statement did say that market conditions remain "challenging", which is usually good for a few pennies off the price, and fears of a UK construction slowdown have helped send the shares down 30% over the past year.

Interior Services

Interior Services Group (LSE: ISG), also in the construction business, saw its shares plunge 10.5p (7.7%) to 125p after its pre-close trading statement was released.

Similarly to Carillion, the firm told us that trading for the year has been in line with expectations released in January, but that margins in the UK have been hit by competition.

Current City forecasts suggest a dividend yield of over 10%, but whether that is achievable or sustainable is something we shall have to wait to see.

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> Alan Oscroft does not own any shares mentioned in this article. The Motley Fool owns shares in Halfords.

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Comments

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johnnnytemplar 04 Jul 2012 , 11:57am

Bit misleading on the halfords drop as it has gone ex div today for 14p

bouleversee 04 Jul 2012 , 12:48pm

ISG down over 11% now. Not surprising in view of the expected final div. cut from 10.7 to 4.6.

Lanyard 04 Jul 2012 , 4:50pm

Yes, a strange comment on Halfords. Going ex-dividend does enter into an equation.

JohnnyCyclops 04 Jul 2012 , 8:11pm

HFD going Ex-Div took 14p of the drop. The other 6p (c. 3%) was just the market. The price is getting ridiculously low. I can't see any good reason why it tumbled from c. 280p in the last month. I hold HFD at 330p so hoping for some of that improvement in the Barclays target, and meanwhile will pocket a 6.6% yield. 2012 was first time they held the dividend in five years; yet to see if they'll cut it going forwards, but underlying business appears profitable/stable.

Unfortunately the 40% tumble over the last 12 months turns into an 80% climb to get them back where they were around 350p.

Lanyard 09 Jul 2012 , 6:11am

I think the analysts are on the mark with the medium term picture of HFD. The profits over the next couple of years will naturally contract, thus a cut in dividend and proceeds reinvested in the brand would be prudent. As to the current price, fear. Fundamentals are basically unchanged. Comments about the weather, as Barclays mentions are a red herring. HFD has a lot of defensive qualities about it hence why it generates hard cash in difficult times. One can imagine the picture when the fog finally lifts on the economy.

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