Daily Stock Market Report (Fri 10th July 2026) - EZJ, IPX, AVG

Good morning!

Not everybody who reads this is a football fan, but the match against Norway tomorrow is difficult to ignore. Economically, these games lead to millions of extra pints being served in pubs, and significantly increased betting activity. So there is more than one reason to  cheer for an English win tomorrow night.

In politics, Andy Burnham is currently unopposed as the next Labour leader. With 322 nominations from Labour MPs so far, it's almost mathematically impossible for anyone else to even run against him.

Will he succeed in ending "forty years of neoliberalism"? As I've said before, I expect him to engage in a little more intervention in the utility sector and perhaps other major industries, compared to his predecessor. But beyond that, we might not see much radical change.

Overnight market movements:

• The FTSE is up 0.2% at 10,490

• S&P 500 is down 0.1% at 7,535

• Brent crude (September) is unchanged at $76.25/bbl

• Gold is down 0.1% at $4,120/oz

• Bitcoin is up 1.2% at $64,050

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Companies Reporting

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Graham's Section

easyJet (LON:EZJ)

Up 15% at 674p (£5.2bn) - Statement regarding possible offer for easyJet plc - Graham - TAKEOVER

I’m taking our colour off this (which for the record was AMBER/GREEN) as our views on the merits of easyJet stock no longer seem relevant at this stage.

With Castelake having put easyJet in play with their takeover efforts, private equity giant Apollo has turned up with a recommended offer.

Terms: £7.15 per easyJet share (this is 3.6% higher than the £6.90 Castlelake bid).

There is also a “Stub Equity Alternative” whereby those shareholders who wish to continue holding easyJet will be able to own the vehicle through which Apollo owns easyJet. The precise terms of this alternative “remain subject to further discussion and agreement.”

As with Castlelake, there is a “best endeavours” commitment to get past any regulatory hurdles that might arise.

Financing: equity financing for the deal will come via Apollo funds. In addition, “Barclays has provided a letter to Apollo indicating that they are highly confident of being able to arrange the required debt financing for the Cash Offer.”

And some background:

Apollo has followed easyJet for many years and continues to regard it as one of the most attractive businesses in the global aviation sector and a highly differentiated franchise with significant long-term growth potential. Apollo believes in easyJet’s existing strategy of evolving and strengthening the low-cost carrier model, most notably through upgauging the fleet, enhancing the ancillary and loyalty offering, and scaling Holidays into a structurally differentiated earnings stream. Apollo further believes that easyJet management’s operational and commercial ambitions can be substantially accelerated via the access to incremental capital and longer-term business and strategic planning that a private company setting affords.

While Castlelake may be aviation specialists, Apollo are effectively specialists in everything - they are a trillion dollar asset manager.

Today’s announcement includes nice words about easyJet’s management team, employees, and the value of the brand.

Graham’s view

This further underlines how cheap the stock was, prior to the interest from Castlelake.

The Iran war knocked it below £5, down towards the £3.50 level, which was only around half the level at which private equity valued it:

A few points to consider.

Will it go ahead? I think this is going to be more achievable than the Castlelake takeover, due to the sheer size and resources available to Apollo. I did think that Castlelake were more likely than not to achieve regulatory approval (with their plan to involve an EU “partner”). I don’t see any detailed plan here as to how Apollo will navigate EU/UK airline ownership rules, but if there is any way to do it, I’m sure they will find it.

Will easyJet shareholders support it? I don’t know is the simple answer. The longer answer is that I think the funds are likely to support it, and I’d be surprised if the Haji-Ioannou hadn’t had some input by this stage. So there is a decent chance that the Haji-Ioannou family do support it.

Is the valuation fair? As I said previously, I didn’t think that £6.90 was obviously too cheap. If you look past the official balance sheet numbers and the current levels of profitability, then it was possible to argue that the stock was too cheap based on what it will look like in two years. easyJet have locked in hundreds of Airbus aircraft orders and purchase rights, which are valuable. Their airline slots and existing fleet are valuable. The EPS forecast for 2028 is 62p, which makes a 2028 P/E multiple of 11.5x. If everything goes right, then I think a buyer will do very well, even at £7.15. But UK stocks aren’t priced on that optimistic basis. Without a bid, there has been little prospect of achieving a £7+ share price.

Overall, therefore: I do think it will be possible for this deal to go ahead, I think easyJet shareholders are more likely than not to support it, and I think the offer is a pretty reasonable one. But also, let's see if Castlelake want to make another bid - the ball is now in their court.

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Impax Asset Management (LON:IPX)

Up 18% at 111.8p (£146m) - Q3 AUM Update - Graham - AMBER/GREEN ↑

(At the time of writing, Graham has a long position in IPX.)

An amazing percentage gain here today, but it’s from a low base. These shares are seriously depressed, having topped out over £14 five years ago:

The Q3 AUM update is not so amazing: outflows of £1.7 billion.

£754m is being lost from Impax Environmental Markets, where the activist investor Saba has successfully ousted Impax (what to call it now - Saba Environmental Markets?).

Elsewhere, there was an additional £994m of outflows:

So what’s the good news?

1. Positive market movements of £2.7 billion, leading to an overall rise in AUM for the quarter.

2. Net outflows were £2 billion in Q2. So if we are willing to treat the IEM situation as a one-off, the Q3 performance is at least a big improvement on that.

CEO comment:

"With global equities markets reflecting the structural trends on which we focus, the performance of our thematic equities, systematic equities and fixed income strategies since the start of the calendar year has remained strong, with most outperforming relevant indices.

"Our net flows picture has also improved…

"Meanwhile, with our systematic equities funds in the U.S. receiving net inflows during the Period, we are responding to client demand in Europe with the intention to launch our first UCITS product in this area later this year."

Graham’s view

Cash reserves of £46m (March 2026) cover a decent chunk of the market cap here. Without even adjusting for that, the P/E multiple was only 7x last night.

At this sort of valuation, any sign that the business is not headed for oblivion should be treated very positively, in my view.

I’ve been AMBER/RED on this stock, reflecting the short-term negative trends. There was a really serious profit warning from Impax in April, which shouldn’t be forgotten.

However, on a long-term view, I don’t really believe in the current valuation - I think it’s worth significantly more than the market is giving it credit for.

For example, even after today’s share price gains, the ratio of AUM to the market cap remains highly distressed at 160x. Adjust for cash and you get 232x. In these terms, the valuation of Impax is only about a third of the value at Polar Capital Holdings (LON:POLR).

With the net flow picture having improved, I’m going to stick my neck out and take us up two notches to AMBER/GREEN. I just think it’s too cheap on a long-term view.

The StockRank style is Contrarian, which is one of my favourite styles:

Extreme quality, and extreme value - the only weak point is Momentum, and there must be a good chance that this is about to start improving?

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Avingtrans (LON:AVG)

Up 5% at 661.3p (£224m) - Launch of proposed placing & Result of Placing - Graham - AMBER/GREEN =

The market really likes this growth-oriented £21m placing.

The "Result of Placing" RNS confirms that they did indeed raise funds at 630p, which was yesterday's close.

At the interim results in February, the company reported net debt of £12m, which is by no means unreasonable for a business of this size and profitability - less than one year of forecast net profits.

So Avingtrans entered this fundraising from a position of strength, a) because it's existing balance sheet was not in bad shape, and b) because the placing itself is highly growth-oriented.

On that second point:

With sufficient capital expenditure deployed, management believe that the Company has the weighted opportunity in its addressable market to grow annual revenues in nuclear by up to circa £90 million by 2031, from its current levels of circa £35 million.

For context, total revenues are currently running at around £160m, so an additional c. £55m would be highly material. The planned nuclear investment arising from this placing is expected to achieve additional revenues of £27-45m (a pretty wide range, it must be acknowledged), and additional EBITDA of £9.6m-£17m (another wide range) in FY31.

Net proceeds will be used as follows:

· approximately £7 million towards the build-out of the Company's new facility in Michigan, USA;

· approximately £4 million on manufacturing equipment;

· approximately £1 million on workforce expansion and training;

· approximately £3 million for general working capital purposes; and

· the balance of approximately £5 million retained as contingency,

Graham's view

Assuming that we can trust management projections, the question is whether it's worth investing £20m plus fundraising expenses to get an additional EBITDA of £9.6m - £17m in three years.

I think the answer is probably yes. I can't predict how much of that EBITDA will get converted into real, after cax net income and free cash flow, but the track record at Avingtrans is decent. At the most recent interim results, £9.6m of adj. EBITDA turned into £5.7m of after-tax profits.

So on its face, the maths here makes sense: £20m of investment will turn into £9.6m-£17m of additional EBITDA in a few years, and that in turn will generate hopefully a nice chunk of additional real profits. I can see why investors have marked the shares higher today. I'll leave our moderately positive stance unchanged.

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Going to leave it there for now, enjoy the footie if you're a footie fan - otherwise enjoy your Saturday night as usual! Cheers.