Why Diageo PLC, easyJet PLC and Barclays PLC Should Lag The FTSE 100 Today

Diageo PLC (LON: DGE), easyJet PLC (LON: EZJ) and Barclays PLC (LON: BARC) are among the blue-chips struggling.

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The FTSE 100 (FTSEINDICES: ^FTSE) has fallen 21 points to 6,809 points at the time of writing, a fall of 0.3%, adding to yesterday’s 0.5% loss. Tesco continues to weigh the market down after a host of analysts cut ratings or price targets, as the grocer retreats from its 5.2% margins target — which remains the highest in the industry — in an attempt to win back customers.

The latest official figures put the UK economy growing 0.7%. This is a good thing, and should encourage investment, but GDP growth is still only in line with expectations. Until the economic recovery begins to make real waves, investors don’t seem in a hurry to push the market beyond record highs.



Shares in Diageo (LSE: DGE) traded down 11p to 1,865p today after the company began trading ex-dividend. A cash dividend payment of 78p per share is scheduled to be paid on 10 April, which any investors from today will not be entitled to receive.

Since the beginning of the year Diageo shares are 4.5% below the market average. Diageo’s new boss has been in the job a little over six months and, despite some hiccups in the firm’s emerging markets business, he commented: “The demographics in emerging markets for our products remain very attractive and our strategy is unchanged.”


easyjeteasyJet (LSE: EZJ) traded down this morning on the same basis as Diageo, losing 10p to 1,682p, as it also went ex-divestment. The budget airline has “made a good start to the year” according chief executive, Carolyn McCall. Revenue per customer was up a little over 3% in the last quarter, while passenger numbers increased 4%.

Shares in easyJet have doubled over the last 12 months, but financial losses of between £70m-£90m have been forecast, which will have already been factored into the firm’s valuation.

EasyJet’s annual results are forthcoming in March, and analysts are predicting the results will reveal earnings per share of 115p, meaning easyJet shares may trade on a P/E of 15.



The share price of Barclays (LSE: BARC) (NYSE: BCS.US) fell 1.7% to 235p during early morning trading, as the bank announced the closure of its power trading desks in London and New York, with the bank under pressure to shore up its capital. So far Barclays has cut its commodities trading staff by more than 20%, with hundreds more job losses expected.  

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Mark does not own shares in any company mentioned. The Motley Fool owns shares in Tesco.

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