Daily Stock Market Report (Thur 6th August 2026) - BOY, PSN, WPP, HBR, PZC, TCAP, OSB, MER, DEVO

Strait of Hormuz: Iran and Oman are preparing a joint statement about their agreement for a new shipping route through the Strait of Hormuz.

While the agreement doesn’t mean that the Strait will reopen soon, it will provide a management plan that both countries are happy with. Oman and Iran border the Strait at its narrowest point, and eastwards of that point.

According to Iranian state television cited by Bloomberg, reopening the Strait will require “a change in US behavior”. The US blockade of Iranian ports continues.

The oil price hasn’t moved much in response to this latest development, but at about $79-$80, it's a long way off its recent highs. A sign that all sides might gradually be figuring out a path towards peace?

Brent crude oil price. Source: Trading Economics.

Overnight market movements:

• The FTSE is up 0.2% at 10,895

• S&P 500 is up 0.2% at 7,753

• Brent crude (October) is flat at $79.45/bbl

• Gold is up 0.3% at $4,260/oz

• Bitcoin is unchanged at $64,800

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Leaving it there for today, cheers! Spreadsheet accompanying this report: link.

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Companies Reporting

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Graham's Section

TP Icap (LON:TCAP)

Down 7% at 321p (£2.3bn) - Interim Results - Graham - GREEN =

The market has reacted negatively to these results, but if we zoom out, the share price is unchanged - even a little higher) than it was when we last looked at it in May.

It has given back some of the gains of recent months:

Let’s see what happened at this large broking company in H1:

• Revenue +8% at constant currency

• EBIT +13% at constant current (£152m)

There are currency headwinds to the above numbers (actual revenue growth only 6%, actual EBIT growth only 9%). The simple explanation is that dollar weakness makes dollar earnings less valuable when reported in pounds sterling.

Outlook: in line with expectations.

We delivered a strong first half financial performance, and demonstrated significant strategic and

operational progress. The Group is well-diversified and built on a modern, scalable platform, and we

have clear opportunities for profitable growth across each of our divisions.

We remain confident in the outlook for 2026, and the Board expects to achieve Adjusted EBIT in line with current market expectations, subject to foreign exchange movements.

Estimates: Cavendish have left their FY26 estimates unchanged, but they increase forecasts for the “outer years” (FY27 and FY28) by 2%.

• FY26: adj. EBIT forecast £369m (previously £368m)

• FY27: £386m (previously £377m)

• FY28: £414m (previously £405m)

Buyback: a new £30m buyback will also help to boost earnings per share, so that EPS forecasts for future years are raised by nearly 4%. The new EPS forecast for FY27 is 39.5p (vs. 36.2p for the current year).

Graham’s view.

This is something of a head-scratcher. I’m inclined to leave our existing GREEN stance unchanged because the company appears to be doing just fine.

It appears that those trading the stock were expecting another upgrade - which in a year of geopolitical turmoil, especially in the energy markets, has a degree of logic behind it. I can see why there might be some disappointment that an upgrade has not materialised.

As things stand, the estimates say that revenues will grow 6% this year, and then stay flat in FY27.

So from a growth perspective, there’s little excitement on offer with this one.

From my point of view, the lack of growth is already priced in at this valuation:

City forecasts have been gradually gliding higher, so it’s not as if the business has been underperforming:

It’s not the company’s fault that its share price was pushed up to 350p by people who thought another upgrade was coming. We’ve been GREEN on this and I’m leaving us GREEN on it today.

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Roland's Section

Persimmon (LON:PSN)

Up 4% at 1,167p (£3.8bn) - Half Year Results - Roland - AMBER/GREEN =

Today’s results from this FTSE 100 housebuilder are relatively unexciting, but they are in line with guidance and suggest to me the company is getting to grips with the current environment and generating sustainable returns.

Persimmon shares have now risen by more than 20% from their 52-week lows. I note the StockRanks have also turned positive recently (although this isn’t quite a full Jump):

H1 results: key numbers

The headline numbers in today’s results mostly seem to be moving in the right direction:

• Completions: up 13% to 5,189

• New home average sale price +1% to £285,752

• Revenue up 13% to £1.48bn

• Underlying pre-tax profit up 3% to £170.1m

Importantly, we’re given guidance relative to expectations:

• On track for completions of c.12,500, at the upper end of previous guidance (consensus: 12,242)

• Underlying pre-tax profit expected to be in line with expectations (consensus: £454m)

If I was to be critical, I would point out that completing more houses than expected without a corresponding increase in profits suggests that margins may be slightly lower than anticipated.

That view is borne out in this morning’s results, which show Persimmon’s underlying operating margin falling to 12.8% (H1 25: 13.1%).

However, the more important measure of capital employed is stable, with a statutory figure of 10.6% (H1 25: 9.9%).

Adjustments vs reality: I’ve quoted underlying profit and margin figures above, but fortunately these are fairly close to the statutory numbers – reported pre-tax profit in H1 was £168m, only £2m below the underlying figure.

However, there is one niggle here that I think is worth understanding – Persimmon has moved from a net cash position of £117m at the end of 2025 to a net debt position of £165m at the end of June. That’s a £282m cash outflow in six months.

The company says this reflects “a period of investment in the first half” and expects the year-end position to be somewhere “between £100m net debt and £100m of net cash”, in line with previous guidance (although quite a wide range).

Checking the cash flow statement shows the reason for this – a £391m working capital outflow during the period:

Source: Persimmon H1 2026 results

Land purchases: the majority of this outflow relates to land purchases, which totaled £271m during the period. This included £198m related to the settlement of land creditors (deferred payment for previously contracted purchases).

I think this means that the heavy outflow in H1 was a timing effect as much as anything – actual H1 land purchases of 2,110 plots remained well below the 5,729 plots purchased during the same period last year. It looks like the company is remaining selective in adding to its land bank.

Outlook

I don’t have any serious concerns with today’s results. I’m pleased to see volumes improving at the same time as the company is maintaining a satisfactory return on capital (i.e. covering its likely cost of capital).

Assuming EPS estimates remain unchanged after today’s results, I think Persimmon shares continue to look reasonably valued:

Roland’s view

Persimmon is relatively unusual in this sector in that it isn’t trading at a discount to book value. However, I think this is more a reflection of its business model and land-buying practices than its valuation.

The only niggle I might have is that I would prefer to see the company maintaining a more unambiguous net cash position. However, I don’t see the current level of borrowing as an issue unless housing market conditions become far worse and volumes dry up – hopefully unlikely.

For now, the combination of a forecast P/E of 11 and prospective 2027 earnings growth of 5% looks fairly attractive to me. The forecast dividend yield of 5.5% also seems fairly safe, unlike the situation at some peers.

While there’s clearly still some downside risk, given the uncertain state of the UK housing market, Persimmon operates at a relatively low average price point with high volumes and appears to be trading successfully in current conditions.

I’m quite comfortable maintaining my previous AMBER/GREEN view today.

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WPP (LON:WPP)

Up 25% at 384p (£4.1bn) - Interim Results - Roland - AMBER/GREEN ↑

Former FTSE 100 member WPP is the top riser on the UK market this morning, up by more than 20% following half-year results that suggest performance could be less bad than expected this year.

I suspect this is an example of a business that’s simply become too cheap – prior to this morning’s gains WPP shares were trading at less than six times forecast profits. Notwithstanding relatively high leverage, that looks low to me unless you think the business is in terminal decline:

Today’s half-year numbers do not look especially good in themselves, but in this case I think it’s the direction of travel that matters. It also looks like Q2 revenue came in ahead of analysts’ expectations:

• H1 revenue less pass-through costs down 4.7% like-for-like (Q1: -6.7%, Q2: 2.8%)

• Q2 LFL revenue ahead of analysts’ forecasts for a c.6% decline (see here)

• Headline operating profit down 3.4% to £398m

• Headline operating margin up 0.2% to 8.4%

• Adjusted net debt reduced by 10% to £2,935m

• Average adjusted net debt reduced by 2% to £3,304 (2.18x TTM EBITDA)

Regional trading: in contrast to a number of companies I’ve covered here in recent weeks, WPP seems to be trading more strongly outside North America. The company’s largest market by profit was also the only one where comparable profits fell in H1:

Despite this, the North American market still seems much healthier than WPP’s operations elsewhere based on its profit margins – more than double any other region.

Restructuring progress: the other important element is continued progress with the wholesale restructuring of this business by CEO Cindy Rose, who was previously a senior Microsoft exec and appears to be placing the business on a much more integrated and tech-centric footing:

We are firmly on track with Phase 1 of our Elevate28 plan to stabilise the business. Our objective for the first half was to put in place the building blocks of the new organisational structure and this is now complete. We are successfully transitioning from a complex holding company to a single, integrated company - with four operating units across four regions, all underpinned by WPP Open, our agentic marketing platform, which enables and connects everything we do.

Big ad groups like WPP historically operate as a group of semi-autonomous agencies, acquired over many years. Rose appears to be unwinding this model and integrating or disposing of many of WPP’s operating businesses.

Cash proceeds from disposals are expected to top £200m this year and the company says it’s making progress on “further potential asset disposals”. Press reports suggest this could include the group’s remaining 40% stake in market research agency Kantar.

Outlook

The main elements of WPP’s full-year guidance appear to be unchanged today, but I think it’s fair to say that Q2 and H1 revenue were at the upper end of expectations. If this trend continues, the full-year decline in LFL revenue could be smaller than expected.

This guidance also implies a big improvement in profit margins in H2:

• H2 LFL revenue less pass-through costs to decline by “low to mid-single digits”

• 2026 headline operating margin: 12% to 13% (vs 8.4% in H1)

• Total cash restructuring costs of c.£250m

• Now expect disposal-related activity to generate cash proceeds of at least £200m

I don’t have access to broker forecasts today, but my guess is that we could see some modest upgrades to EPS estimates over the coming days. Consensus estimates have already edged higher recently, according to the StockReport:

Roland’s view

Assuming no changes to 2026 EPS estimates today, WPP now trades on a 2026E P/E of 7.4 with a 3.8% dividend yield. If earnings have bottomed out – as forecasts suggest – then this could be an attractive entry point for this business, in my view.

After all, today’s share price gain has only taken the stock back to where it was a year ago:

While I think the internet and AI have probably permanently changed this business, WPP remains one of the largest companies of its type in the world. It’s interesting to remember just how far its shares have fallen – down by nearly 80% in 10 years:

The recent increase in StockRank may also be encouraging:

High Value and Momentum ranks indicate a Turnaround. But if margins continue to recover and improve the company’s quality metrics, this could become a Super Stock.

The last time we covered WPP was one year ago, when I took an AMBER/RED view following a profit warning.

The shares are back where they were 12 months ago, but I think quite a lot has changed in the business since then. I’m going to take a chance and move our view up by two notches to AMBER/GREEN today.