Daily Stock Market Report (Fri 7th August 2026) - DGE, WYN, SDG, GDWN

EasyJet: the takeover by Apollo has been given the green light by Sir Stelios Haji-Ioannou and his family, saying “I am pleased with Apollo's strategic intentions for the easyJet business, which aim to create more growth”. The rival bidder Castlelake has dropped out. To comply with EU airline ownership rules, the Haji-Ioannou family and other European-based investors will need to stay invested in the business - the procedures needed to satisfy regulators are only just beginning.

Iran: oil has been ticking higher again, with various negative developments around the Strait of Hormuz. The latest one is that Iran now wishes to ban US and Israeli ships from the strait, and that “hostile countries” would have to pay compensation to gain access to it. This comes after Iran and Oman jointly agreed on how those two countries wish to jointly manage shipping routes in the area.

President Trump said yesterday that negotiations with Iran are “moving along good”, but the US blockade of Iranian ports continues and Iran’s financial demands appear to be increasing, and so it’s difficult to see a full reopening of the Strait in the short-term.

AI smart speakers: Bloomberg reports that OpenAI is planning to launch a smart speaker in 2027. It will be shaped like a doughnut, easy to carry around the house, and function as “an AI-first computer that can help users get things done”.

Overnight market movements:

• The FTSE is down 0.1% at 10,860

• S&P 500 is flat at 7,709

• Brent crude (November) is up 1.3% $81.50/bbl

• Gold is up 0.8% at $4,275/oz

• Bitcoin is down 0.3% at $64,250

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Calling it there - thanks everyone! Have a great weekend. Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

Wynnstay (LON:WYN)

Up 1% at 377.4p (£88m) - Investment in Scottish Fertiliser Capacity Growth - Graham - AMBER/GREEN =

Roland was moderately positive on this in June.

This agricultural supplier has a below-average track record when it comes to economic returns (ROE/ROCE); the current CEO is working on a five-year plan to improve this.

Today’s announcement concerns a new investment designed to improve operational efficiency, but it doesn’t give me too many numbers to work with:

Wynnstay Group plc (AIM: WYN), a leading integrated partner to UK agriculture, is pleased to announce a significant expansion of its Glasson Fertilisers blending operations at Montrose, Scotland. This latest investment will significantly increase the Group's fertiliser blending capacity, improve operational efficiency and create one of the largest fertiliser blending plants in Europe on completion.

Highlights:

• Long-term lease for a "substantially larger production facility at Barrack Road, Montrose” that will double the company’s blending capacity in Montrose. It’s expected to be at full production during H1 of FY October 2027.

• Disposal of the existing Cobden Street site to partially fund the new site.

• The total investment, including working capital, is expected to generate a return on net assets in line with the target of not less than 10%.

CEO comment:

"This investment is another important milestone in the delivery of Strategy Genesis and demonstrates our continued confidence in the long-term growth opportunities for Glasson Fertilisers…

"Following the successful expansion of our Avonmouth fertiliser operation, this investment further strengthens our manufacturing network and reflects our disciplined approach to investing capital in projects that generate attractive long-term returns…

Graham’s view

A return on assets of greater than 10% is acceptable in my book. Combine that with some leverage (which doesn’t have to be from a bank, it could also be from customers or suppliers) and pretty soon the return on equity can get to 15%+, which I would start to view as attractive.

However, at the moment, these higher returns are just hopes and promises. They might pan out, they might not.

And I’m no agricultural expert, but I would assume that many types of agricultural supplies - feeds and fertilisers in particular - are subject to a high degree of commoditisation. Wynnstay’s gross profit margin has been running at around 14% (see the H1 results), which I would say is consistent with that statement.

So I would say there are natural limits on the returns that Wynnstay might achieve, even in a best-case scenario.

The valuation does reflect this:

I’m therefore happy leaving our moderately positive stance unchanged. If Strategy Genesis works out, this will become a higher-quality business that is worthy of a re-rating higher. If it doesn’t work out, then there’s a reasonable chance that investors haven’t overpaid for it anyway.

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Goodwin (LON:GDWN)

Up 10% at £207 (£1.55bn) - Recent press speculation - Graham - AMBER ↑

A brief but very important update from Goodwin:

The Board of Goodwin notes recent press speculation regarding the potential sale of parts of the Mechanical Engineering division.

The Board of Goodwin confirms that it has commenced a strategic review to consider a range of potential options to maximise value for shareholders whilst ensuring continuity for all stakeholders, including customers, and the long-term prosperity of its businesses. These options include the potential sale of a substantial part of the Mechanical Engineering division, which includes GSC, GI, Noreva, Easat and Pumps.

The Financial Times had the scoop overnight, saying “Several buyout firms that have records in defence have submitted expressions of interest to the London-listed engineer in recent weeks”.

Goodwin’s portfolio of companies is diverse; the companies mentioned above carry out the following activities:

• GSC (Goodwin Steel Castings): the manufacture of high integrity, technically advanced castings. Includes nuclear, defence and shipbuilding capabilities.

• GI (Goodwin International): heavy project engineering. Used in nuclear, petrochemical and power generation.

• Noreva: a manufacturer and supplier of non-slam check valves.

• Easat Radar Systems: design, build and install high performance antenna systems for defence contractors, civil aviation and border security agencies. Used in both civilian and military markets.

• Pumps: submersible pumps manufactured in India.

Based on the above, it sounds like the Goodwin Board are interested in potentially selling more than just their defence-focused businesses. But the FT might also be 100% correct that there are bids coming in for the defence companies.

Graham’s view

Goodwin has treated investors to quite a ride over the past year: soaring from less than £100 per share to about £280 per share at the peak, before collapsing on a very gloomy trading update and now rising again.

Despite having a market cap well in excess of £1 billion and being in the FTSE-250, it doesn’t provide useful forward guidance, leaving it up to investors and analysts to do their own work when it comes to figuring out what the company might achieve.

This isn’t trivial even for simple businesses, but when dealing with a conglomerate that works on large government contracts, it’s far from straightforward.

I’m not going to pretend that I know what Goodwin might be able to sell these business units for. I will go out on a limb and say that I think now is a good time to sell defence sector assets: valuations are strong as geopolitical tensions have simmered and as defence spending has risen. The likes of BAE Systems (LON:BA.). is trading at 24x forward earnings, and Rolls-Royce Holdings (LON:RR.). is at 34x (I concede that’s more than just a defence stock).

It’s also true US stock valuations are extremely hot - making it a good time to sell to US-based investors. Given the sensitive nature of Goodwin’s work, I expect US (most likely) or UK buyers.

Goodwin did tell us previously that it expected PBT of at least £71m in FY April 2026. Those results have not been released yet. The current market cap leads me to believe that the business is trading at around 29x trailing earnings, depending on tax rates. We’ll get those full year results in a few weeks. That earnings multiple makes me nervous, but there’s no denying that the company’s growth in recent years has been spectacular. If they keep growing like they have before, that multiple will soon prove to be irrelevant.

For now, I’m inclined to put us on a neutral stance on Goodwin. This is a case of the stock being in my “too difficult” tray, at least for now. If they do sell off a few businesses and achieve a simpler structure, they may end up being easier for simple-minded investors like myself to analyse - and might therefore get out of that tray.

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Ed Sheldon's Section

Diageo (LON:DGE)

Up 6% yesterday and up 1% today at 1,753p (£38.6bn) - Preliminary Results 2026 - Ed S - AMBER =

(At the time of writing, Ed S had a long position in DGE.)

FTSE 100 dog Diageo – which I hold sadly – posted its Preliminary Results for the financial year ended 30 June 2026 yesterday. The market clearly liked something in the report as the stock jumped 5.6% yesterday and it’s up another 1% today. So, let’s take a look at what’s going on here. Is new CEO Dave Lewis turning things around?

Headline numbers:

• Net sales down 3.0% to $19,643m

• Organic net sales down 2.0%

• Operating profit down 27.2% to $3,156m

• Operating profit before exceptional items down 2% to $5,683m

• Basic EPS down 26.3% to 78.1 cents

• Basic EPS before exceptional items up 0.7% to 165.3 cents

• Adjusted free cash flow of $3,211m was $463m higher than a year earlier

• Net debt as at 30 June 2026 was $20.5bn – representing a net-debt-to-adjusted EBITDA ratio of 3.1x.

• Final dividend reduced to 30 cents from 62.98 cents taking the total full-year dividend to 50 cents per share versus 103.48 cents per share the year before.

In terms of estimates, analysts were looking for:

• Sales of $20.27bn (miss)

• Adjusted operating profit of $5.89bn (miss)

So overall, a pretty poor performance for the year. The company noted that growth in Europe, LAC and Africa was offset by weakness in North America (-8.4%) and Asia Pacific.

It’s worth pointing out here that Diageo is experiencing challenges in China due to the government's crackdown on Chinese white spirits (CWS). It notes that excluding CWS, organic net sales for the group would have been c.1.5% higher.

In terms of restructuring (it’s engaged in a 2-year restructuring programme), restructuring charges were $0.9bn. This included c.$752m costs for the implementation of its new operating framework.

This new operating framework is expected to deliver c.$850m savings over two years, starting this financial year. These savings will allow the company to invest in its turnaround without needing to reduce operating profit (it stressed this multiple times).

Impairment charges were $1.5bn. This related largely to Turkey (due to the impact of hyperinflationary accounting and change in pricing in market), as well as the write down of the Don Papa brand and certain other smaller brands.

(As a fan of rum, I always knew that Don Papa was a terrible acquisition. It’s absolutely awful in my view!).

Capital Markets Day presentation

In the company’s Capital Markets Day presentation, Lewis said that his plan is to:

• Focus on spirits including ready-to-drink (RTD) cocktails (Smirnoff RTD is a standout)

• Continue the double-digit growth of Guinness and gain share

• Retain premiumisation as a key value creator but activate the wider portfolio to serve more customers across more occasions

• Turnaround North America whilst growth continues in the rest of the world

He notes that the company does need to rebase profit to support this plan.

Lewis is targeting leverage of 2.75x this year and 2.0x by 2029. As leverage comes down, the Board will explore dividend increases and/or share buybacks.

“It will not be easy, but we are confident that over the next 3 years we can recover the Diageo business to strong profitable growth creating value for shareholders.”

As for growth forecasts, the company expects sales growth to be flat this year. It is then targeting 1.5% growth in FY2028 and 2.5% in FY2029.

For organic operating profit, it is targeting mid-single-digit growth between FY2027 and FY2029. For free cash flow, it is targeting $8bn in cumulative FCF over the next three years.

Ed S’s view:

On balance, I see reasons to be optimistic here. While performance last financial year was no doubt poor, CEO Dave Lewis is clearly working hard to turn things around.

Already, he has:

• Lined up a substantial amount of job cuts. Here, he is focused on global, back-office functions and in areas where there is "massive duplication."

• Cut the dividend materially.

• Announced plans to nearly double the capacity of Guinness (production capacity is slated to increase from 8.2m hectolitres (mHL) today to 15.7m by 2031, an increase equivalent to 300 Olympic-sized swimming pools).

• Developed strategies to appeal to more consumers, e.g. more focus on RTDs.

“This new strategy, executing with a new, more agile, competitive and cost-effective operating model, gives us confidence that we can return Diageo to a business consistently creating value for shareholders. We remain a business with a very strong premiumisation agenda, but by activating our wider portfolio, we will be able to serve more consumers, across a variety of occasions. There is hard work ahead, particularly in North America, where improving performance is a clear priority, but we are confident we can deliver without taking a step back in operating profit.”

Of course, he is still facing major challenges. One is that attitudes to alcohol are changing, with younger consumers drinking less (due to affordability, a growing focus on exercise and wellness, and the fact that they want to look good on social media).

GLP-1 weight-loss drugs are another potential headwind. The company says that their impact on spirits is low, however, I still see this as a key risk, especially in North America where adoption is high.

In terms of the valuation, taking the adjusted EPS figure for FY2026, we get a trailing P/E ratio of 14.2x at today’s share price. That doesn’t scream ‘bargain’ given the company's challenges and its substantial debt pile, but it’s also not particularly high for a global consumer goods company with a solid portfolio of brands.

The trailing dividend yield is around 2.1%. So, there is not a lot of income on offer but 2.1% is better than nothing.

Putting this all together, I’m going to leave the stock on AMBER. I do think the company is heading in the right direction (and that the bottom is probably in for the stock), however, whether it can beat the market in the medium to long term is still uncertain.

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Sanderson Design (LON:SDG)

Up 2% at 79p (£56m) - Half Year Trading Update - Ed S - AMBER/GREEN =

Luxury interior furnishings company Sanderson Design Group has today posted a half-year trading update for the six-month period ended 31 July 2026. This stock has a StockRank of 98 and a ‘Super Stock’ rating so let’s take a closer look.

H1 FY27 highlights:

• Group revenue increased 6% to £51.4 million.

• Total brand product revenue up 2% to £35.5 million, with significant growth in North America (+19%) more than offsetting anticipated UK softness (-8%).

• Third Party Manufacturing revenue increased 19% to £11.0 million, with excellent demand from US brands and buyers.

• Total Licensing revenue up 13% to £4.9 million, driven by the renewal of the global Blinds2Go agreement (£1.4 million of accelerated income).

• Direct-to-consumer revenue in H1 2027 significantly exceeded that achieved in H1 FY26, rising 137% to £1.6m.

Balance sheet:

• Net cash position at period-end of £10.2 million (31 January 2026: £9.8m), having purchased £1.4m of shares into the EBT in H1 FY27 as previously announced.

Guidance:

• The Board expects full-year trading to be in line with market expectations.

• It says that FY27 market expectations for adjusted underlying PBT are £6.5m.

In the update, the company points to strong progress against core strategic priorities:

• North America – Its focus on North America is paying off, with 19% revenue growth during the period. North America continues to be the Group's highest margin and most profitable region as well as the fastest growing.

• Brands – Launched in May 2025, the Highgrove Collection by Sanderson is creating a 'halo effect' on the Sanderson brand, with very strong sales growth in every region and ahead of Management's expectations. Highgrove has been particularly well received in the US, where Sanderson brand sales are up significantly (+45%).

• Manufacturing – The proactive restructuring of operations together with the "Future Factory" initiative has led to a strong recovery in this segment's performance, up 19% on prior year.

• Digitalisation – Performance of the direct-to-consumer (DTC) sales channel, via brand websites, has been particularly strong, with revenue in H1 FY27 more than doubling compared to the prior period.

“As we look ahead, we remain focused on delivering our strategic priorities and are confident in the Group's ongoing ability to generate profitable growth.

Ed S’s view:

The Super Stock rating and the 98 StockRank piqued my interest here and taking a closer look, there's quite a bit to like about this small-cap AIM stock.

For a start, the company appears to have multiple sources of growth. Not only is it seeing strong growth in the US right now (which is offsetting weakness in the UK) but it’s also doing well on the manufacturing side and the DTC side.

Note that the US is the group's highest margin and most profitable region. So, if it continues to see strong growth here, there could be scope for an earnings beat in FY2027 (the consensus forecast at present is 6.38p per share).

"We are particularly excited about our prospects in the US, where trading has been excellent with a clear upward trend. The US represents a major growth opportunity where our strategy to develop relationships with and collaborate with industry experts and celebrated designers has proven key to stimulating demand.”

Next, the balance sheet looks solid – net cash at period-end was £10.2 million (market cap is only £56m). Note that Stockopedia gives it a score of 89 for quality.

Turning to the valuation, it seems quite reasonable (although Stockopedia only gives it a score of 68 for value). Taking the earnings forecast for this year, we get a P/E ratio of around 12.4, so there’s potentially scope for a re-rating here.

Finally, from a momentum perspective, the set-up looks relatively attractive (Stockopedia score of 95). At present, the stock is above both its 50-day moving average and its 200-day moving average while the RSI is 68 (not overbought yet but getting close).

On the downside, analysts only expect top-line growth of 4.5% this financial year. So, it’s not exactly a growth stock.

Meanwhile, the performance in the UK is a concern. This is a major drag on overall performance.

There are also plenty of risks that could derail the bull thesis – a slowdown in consumer spending, new tariffs, etc.

Overall though, I think this stock looks interesting from a value perspective. I’m going to keep it at AMBER/GREEN.