Daily Stock Market Report (Thur 3rd September 2026) - JET2, CRST, FDEV, ECEL, TRB, EMAN

There isn’t much overnight news, but I’d like to draw your attention to our recent stock pitches: Volex (by Ed Sheldon, who joins me today), and IG Group (by yours truly) (disclosure: I’m long IG group (LON:IGG)).

Researching IG’s takeover of sports betting platform Underdog, I came across Kalshi, the largest prediction market in the United States. It’s less well known outside the US, where Polymarket is more influential.

Anyway, it turns out that Kalshi is in the news quite a lot. Here are some of the biggest Kalshi-related stories from the past week alone:

• CNBC: Young adults under 21 traded $5 billion on Kalshi this year, amid prediction market frenzy

• Reuters: Prediction market Kalshi to file for US crude oil 'perps'

• Politico: Kalshi permanently bans George Santos for insider trading

• The Block: Michigan court orders Kalshi to keep blocking sports prediction markets

• Sportico: Kalshi stops its sports injury betting markets at CFTC’s Request

It's worth noting that nearly all of these stories have something to do with the regulation of the platform.

Prediction markets are immature and the regulatory situation is far from settled, which makes them interesting from an investment perspective.

I mention all of this because it adds flavour to the story around IG’s acquisition. I’m very uneasy about the amount paid for it. But in the bigger picture, I’m also intrigued as to how these so-called prediction market “derivatives” are going to evolve over time.

Overnight market movements:

• The FTSE is unchanged at 10.755

• S&P 500 is unchanged at 7,665

• Brent crude (November) is down 1.2% at $94.40/bbl

• Gold is up 1.1% at $4,435/oz

• Bitcoin is up 0.3% at $77,700

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The Agenda is complete. Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

Crest Nicholson Holdings (LON:CRST)

Down 9% at 55.7p (£143m) - Trading Update - Graham - RED =

Roland was RED on this in April on the day of a very serious profit warning that saw the share price collapse 39%. Profit guidance was cut 79% and we learned that the company was in talks to relax its lending covenants.

Today’s trading update offers little relief. At least net debt has improved: it is “now expected to be better than previously indicated and lie in the range of £70 to £90m an improvement of c. £30m (previous guidance of £100m to £120m)”

But is it improving quickly enough?

The Group remains in constructive discussions with its lenders to amend its covenants and ensure that it has an appropriate level of funding and liquidity going forwards, although the Group now anticipates some slippage in the current timetable and will provide a further market update in due course.

“Some slippage in the current timetable” sounds pretty grim. When it comes to debt that’s in danger of entering technical default, any problem is potentially very serious.

The interim results, published in July, included a going concern warning, due to the company’s difficulty meeting covenants. Crest had received a temporary waiver in relation to the covenant measuring its interest cover ratio (earnings / interest expenses).

Given the collapse in the company’s earnings, it’s not too surprising that this covenant is the one that’s causing problems.

And in hindsight, it’s pretty obvious that a cyclical business is going to have trouble with its earnings-based covenants in a downturn.

Let’s turn to today’s full year profit guidance:

Market conditions have been more subdued than expected through the seasonally quieter summer trading period, with affordability constraints and competitive pricing continuing to weigh on open market sales rates…

Against this backdrop, the Group now expects full-year completions to be in the range 1,350 to 1,400 (previous guidance 1,400 to 1,500) and for EBIT to be a loss of around £10m (previous guidance for EBIT profit of £5m to £10m). The reduction in profitability reflects lower expected completions following weaker open-market demand, and continued competitive pricing, particularly in bulk transactions, also resulting in some further NRV provisions on a small number of sites.

Graham’s view

Lower than expected net debt is excellent news, and the interim results showed the company having net assets of about £690m. Subtract intangible assets and deferred tax assets, and book value is still over £600m.

In the short-term, however, there’s a liquidity risk with debts coming due including £50m of senior loan notes in August 2027, plus the large RCF which has those covenants attached and where the lenders seem to be taking their time when it comes to agreeing to waivers

I’m staying RED on this, of course. I could quickly change my tune if the balance sheet problems were solved, but for now there’s a real danger that the value of the equity could get permanently impaired here, e.g. with a highly dilutive fundraising.

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Eurocell (LON:ECEL)

Down 2% at 121p (£120m) - Half Year Report - Graham - AMBER/GREEN =

Eurocell plc, the leading UK manufacturer and distributor of door and window products to the trade, today announces its results for the six months ended 30 June 2026.

This one has seen its momentum improve in recent months. Mark was moderately positive on it in May:

On a day when a housebuilder has issued a profit warning, perhaps it’s helpful to see how a manufacturer of door and window products is doing.

Half-year highlights:

• Sales up 6%, or just 1% organically, excluding the acquired Alunet business.

• Adjusted operating profit up 10% (not organic) from £10.1m to £11.1m.

In the CFO’s divisional review, we are told that Alunet’s adjusted operating profit was £4m. So take that out of the group result, and you get a year-on-year decline.

The core “Profiles” division, for example, saw revenues decline 6% and adjusted operating fall 24%, to £6.3m. This seems very consistent with a weak housing market.

The commentary on Profiles, for example, includes the following:

We have seen an increasingly challenging market backdrop for new build housing and reduced RMI activity through our trade fabricators. Investor optimism for a housing market recovery in 2026 has faded, with mortgage rates remaining at elevated levels, keeping a headwind on customer affordability. This has been compounded by rising energy costs due to events in the Middle East, with build-cost inflation now running well ahead of house price growth.

The new CEO (since February) describes it as a “robust” performance in the context of weak trading conditions. He pointedly says that prospects are attractive in the medium and long-term - this is what CEOs say when the short-term outlook is poor:

The momentum in Q2 sales has continued into the second half and we expect to make further progress this year. The medium and long-term prospects for the UK construction market remain attractive, and we are well positioned to drive sustainable growth in shareholder value."

Balance sheet/net debt

Net debt is £28.1m before leases (£93.7m including lease). “We operate comfortably within the terms of the facility and in compliance with our financial covenants.”

The full year net profit forecast is about £17m this year and £20m next year, so I can believe that they are comfortably within covenants. The balance sheet as a whole has a tangible net worth of nearly £60m.

Graham’s view

This is the type of cyclically exposed business that probably ought to trade cheaply - and it does.

The ValueRank is a mighty 94.

As Eurocell appears to be navigating difficult conditions in a reasonable way, I can see why we’ve been AMBER/GREEN.

Poor organic numbers are being masked by acquisitions, but it can be argued that the poor organic performance - and declining EPS forecasts - are already priced in at a P/E multiple of only 6x.

Definitely a stock for the value hunters among us - not something I’d be adding to my slightly more quality-oriented portfolio

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Ed's Section

Jet2 (LON:JET2)

Up 3% at 1,505p (£2.8bn) - AGM trading update and intended move to the Main Market - Ed S - AMBER/GREEN =

Jet2 – the UK's leading provider of package holidays and third-largest airline – has provided a trading update ahead of its AGM later today.

Trading performance:

• The group has seen ‘sustained demand’ since its Preliminary Results on 8 July 2026.

• Summer 2026 seat capacity is 7.6% higher than Summer 2025 at 19.9m seats, with booked-to-date passengers up 8.8% and growth across both package holiday and flight-only products.

• Combined booked average load factor to the end of August was 1.5ppts ahead of the prior year, reflecting disciplined capacity management, targeted investment in load factor and underpinned by attractive pricing.

• London Gatwick operation continues to perform ahead of initial expectations, supported by a stronger-than-expected package holiday mix.

• Winter 2026/27 on-sale seat capacity is 8.0% higher than Winter 2025/26 at 5.9m seats.

• Fuel and foreign exchange hedging positions provide protection for the current financial year: 93% of full-year jet fuel requirement now hedged at an average price of $753 and over 90% of foreign exchange also hedged, delivering a high degree of cost certainty.

"We have been encouraged by the sustained level of demand for both our holiday products through the peak summer season which gives us confidence for the remainder of the financial year.”

Intended move to the Main Market:

The company has also announced that it is planning to move its shares from AIM to the Main Market. It expects this move to occur before the end of its current financial year.

“Over the past decade, the Group has established itself as the UK's leading tour operator and third-largest airline. Today, more than 90% of the UK population is within a 90-minute drive of one of our 14 UK bases and customer satisfaction consistently exceeds 90%. This growth has been achieved alongside strong financial performance, with Group revenue increasing at a compound annual growth rate of 19%.”

“To reflect this track record of growth, the Board of Jet2 has agreed that now is the right time to move to the Main Market. Whilst acknowledging the highly important role AIM has played in supporting the Group's development over many years, the Board believes the intended move represents a natural next step in Jet2's development. It reflects the Group's scale, continued evolution, strong track record and the Board's confidence in its long-term growth prospects, whilst providing a platform to support its future development and enhance its visibility with a broader range of UK and international institutional investors.”

Ed S’s view:

I’m always a little wary of airline stocks. This quote from Warren Buffett comes to mind: "The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines.”

But obviously this is far more than just an airline. Today, Jet2 is the UK’s leading provider of package holidays, and consumers love the company (4.3 rating on Trustpilot versus 1.3 for Ryanair).

And when you dig deeper, the business starts to look very interesting from an investment perspective. Not only does it have an exceptional growth track record (see the slide below from Holland Advisors – where it was their largest portfolio holding at the end of July), but it also generates a consistently high return on capital employed (ROCE), sports a strong balance sheet, has rising dividends, and does buybacks.

Additionally, Stockopedia’s quant systems rate the stock highly. Currently, it has a StockRank of 98 and a ‘Super Stock’ rating.

In terms of today’s update, there are numerous positives:

• Sustained demand with booked-to-date passengers up 8.8% and growth across both package holiday and flight-only products.

• Combined booked average load factor to the end of August was 1.5ppts ahead of the prior year.

• Fuel and FX have been well managed.

• The intended move to the Main Market – this should widen the shareholder base and lead to more interest in the stock (it should join the FTSE 250 at some stage).

One thing worth highlighting is that customers have continued to book closer to departure throughout the peak summer period. What does this tell us?

Well it could signal that UK households are a little stretched for cash and delaying major discretionary purchases. They could be hoping to land last-minute deals.

Overall though, the company is seeing solid demand at present. It seems consumers are prioritising travel spending at the moment and cutting back on other areas of discretionary spending (e.g. sports shoes and apparel).

Cashed-up retirees / Baby Boomers are probably also supporting demand. For this demographic, travel is often a high priority.

Back in July, we gave Jet2 an AMBER/GREEN and I’m going to leave the stock at that rating today. There are some risks around demand in the current environment but with the stock trading on a forward-looking P/E ratio of just 11 (falling to 7.5 using next year’s EPS forecast), I’m cautiously optimistic in relation to the outlook here.

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Frontier Developments (LON:FDEV)

Up 9% at 445p (£145m) - Frontier Announces Collaboration with Disney for New Video Game - Ed S - GREEN =

British video game developer and publisher Frontier Developments has today announced that it has entered into an agreement with Disney to develop and publish a new game that will draw on Disney's iconic portfolio of IP.

We don’t get a lot of details but the company says that the game will be fully funded by Frontier and will build upon its extensive experience and proven capabilities as a leader in the Creative Management Simulation (CMS) genre; which includes the Planet Coaster, Planet Zoo, and Jurassic World Evolution franchises, as well as an unannounced Planet game currently in development.

"We are delighted to announce this collaboration with Disney, which further reinforces our clearly defined strategy of developing and nurturing world-class creative management simulation game franchises. Our mission with this game is to connect a passionate creative community of players with one of the world's most iconic and beloved brands, and I can't wait to see what our talented teams will create with this amazing opportunity."

Ed S’s view:

Roland and Graham have both awarded this stock a GREEN rating this year and I’m happy to reiterate that stance today. I see this morning’s update as positive and the market does too – the share price is up 9% as I write.

This stock has been on a wild ride over the last decade. During the Covid tech boom it shot up spectacularly, however, it has since experienced a massive fall.

Today, the risk-reward set-up looks relatively attractive, in my view. Back in June, the company posted a good trading update in which revenue for the year ended 31 May was up 16% and adjusted operating profit was up 44%.

The outlook at the time was:

FY27 is expected to start positively, supported by Jurassic World Evolution 3 joining Microsoft's Game Pass subscription service on 2 June 2026, the upcoming Jurassic World Rebirth expansion on 16 June, and expected portfolio sales ahead of the summer promotional period.

Alongside continued revenue contributions from existing games, FY27 performance will be driven by the release of Planet Zoo 2 and Warhammer 40,000: Chaos Gate - Deathwatch. The Board has been encouraged by the positive reception to the announcements of these games and is confident in delivering FY27 in line with its expectations.

At the end of May, Frontier had cash of £44m so its balance sheet is strong. This is allowing it to buy back shares.

Turning to the valuation, it seems reasonable. Currently, the trailing P/E ratio is only about 12.

As for the StockRank, it's 88, which is decent. It’s worth pointing out, however, that the StockRank was 92 back in June.

One thing worth flagging is that analysts don’t expect any top- or bottom-line growth this financial year. Looking at forecasts, revenue is expected to be relatively flat while EPS is projected to fall 18%.

That’s not ideal (Graham pointed out in June that revenues here tend to be lumpy). Having said that, this backdrop could pave the way for a top and/or bottom line beat if business performance remains strong