Metro Bank upgraded to “outperform” by RBC, PT held at 155p; stock up 2%

Investing.com -- RBC Capital Markets has upgraded Metro Bank Holdings Plc (LON:MTRO) to “outperform” from “sector perform,” maintaining a price target of 155p, in a note dated Tuesday. 

The upgrade follows new estimates that point to stronger returns and balance sheet flexibility, with the bank expected to begin paying dividends from fiscal year 2027.

The brokerage flags that Metro Bank is trading at a discount compared to its peers. On a two-year forward price-to-tangible book value basis, Metro trades at 0.65x, compared with the UK sector average. 

RBC projects a reported return on tangible equity (ROTE) of about 16.1% in 2027 and 18.5% in 2028, ahead of the peer average of 14%.

A key factor in the bank’s outlook is the Bank of England’s decision in July to raise the minimum requirement for own funds and eligible liabilities (MREL) threshold to £25-40 billion, from £15-25 billion. 

With total assets of £16.4 billion, Metro will no longer be required to hold MREL debt from January 2026, reducing annual costs by about £60 million. 

RBC said this shift has not been fully recognized by the market and is likely to be a driver of value from 2028 onward.

The analysts noted that Metro has capacity to grow while maintaining capital ratios above regulatory requirements. CET1 capital is projected to bottom at 12.3% in 2026, before improving again in 2027. 

The bank is targeting lending growth of 8-11% annually through 2028, supported by higher levels of organic capital generation.

In addition, Metro has increased its pace of branch expansion. Management previously guided for around eight new branches, but now plans to add three to five per year over the next seven years, reaching about 120 locations from the current 76. RBC interpreted this as a sign of management’s confidence in its medium-term strategy.

RBC maintained that risks remain, including potential capital strain if lending growth and balance sheet rotation are not managed effectively, liquidity pressures from deposit withdrawals, competition in UK specialty lending, and asset quality deterioration.

Nonetheless, the brokerage said strong execution in cost management, deposit repricing, and asset rotation supports the improved outlook.

Investing.com -- RBC Capital Markets downgraded Dowlais Group (LON:DWL) to “sector perform” from “outperform” as the company’s share price now trades nearly in line with the value implied in American Axle (NYSE:AXL) Manufacturing’s takeover offer, in a note dated Tuesday. 

Analysts set a price target of 77p, just above Dowlais’ current share price of about 76p.

The downgrade follows a proposed combination announced in January in which Dowlais shareholders are set to receive 44.8p in cash, including a 2.8p final dividend, and 0.083 shares of American Axle for each Dowlais share. 

On an updated basis, that deal values Dowlais at roughly 77.3p per share after accounting for the dividend, leaving little room for upside from its current level. 

The implied offer splits ownership of the combined company between 49% for Dowlais investors and 51% for American Axle shareholders.

RBC analysts noted they continue to view the offer as undervaluing Dowlais, but said with the deal having been on the table for more than six months and both management teams still expecting a fourth-quarter completion, a closing is considered the most likely outcome. 

The brokerage made only minor adjustments to its forecasts after Dowlais’ first-half results came in ahead of expectations, keeping the full-year outlook unchanged.

Dowlais, which was spun off from Melrose (LON:MRON), generates about 80% of its revenue from GKN (LON:GKN) Automotive and 20% from its Powder Metallurgy business. 

The company’s market capitalization stands at about £1.07 billion, with shares outstanding at 1.39 billion. 

Analysts also flagged that the key risk to the rating and target remains the progress of the American Axle transaction, while automotive demand, tariffs and the pace of the electric vehicle transition pose additional uncertainties.

Monday’s market has seen a variety of stock movements, with certain stocks experiencing significant shifts. Mega-cap stocks like Facebook Inc (NASDAQ:META) and United Health Group (NYSE:UNH) have made notable moves, while large-cap stocks such as First Solar Inc (NASDAQ:FSLR) and Duolingo (NASDAQ:DUOL) have also seen considerable activity. Here’s a rundown of some of the most impactful stock movers across different market cap ranges today.

Mega-Cap Movers:

• Facebook Inc (META): -2.62%
• United Health Group (UNH): +2.87%

Large-Cap Stock Movers:

• First Solar Inc (FSLR): +8.63%
• Duolingo (DUOL); KeyBanc upgrades to Overweight on product improvements: +9.27%
• Bullish Inc (BLSH): -6.85%
• Jbs NV (JBS): +5.49%
• Fortress Value Acquisition Corp (NYSE:MP): -5.64%
• Joby Aviation (NYSE:JOBY): -4.42%
• Yandex (NASDAQ:NBIS): -1.91%
• AltC Acquisition (OKLO): -3.24%
• Celsius Holdings (NASDAQ:CELH): +3.97%
• Astera Labs (ALAB): -2.96%

Mid-Cap Stock Movers:

• Ceridian HCM Holding Inc (NYSE:DAY): +25.97%
• Social Capital Hedosophia Hold II (NASDAQ:OPEN): +19.24%
• Ikonics Corp (WULF); Fluidstack expands TeraWulf data center lease: +17.22%
• Kindly MD (NAKA): -9.88%
• Sunrun Inc (NASDAQ:RUN); RBC Capital upgrades to Outperform: +10.13%
• Colonnade Acquisition (OUST): -8.14%
• Nextracker (NXT): +9.05%
• Good Works Acquisition (CIFR): +11.13%
• Hesai ADR (HSAI): +4.1%
• Bitmine Immersion (NASDAQ:IMMR) Tech (BMNR); BitMine crypto holdings exceed $6.6 billion: -6.07%

Small-Cap Stock Movers:

• Goodrx Holdings Inc (GDRX); offers Ozempic and Wegovy at $499 monthly: +30.83%
• Xunlei Ltd Adr (XNET): +22.61%
• IQIYI Inc (NASDAQ:IQ): +19.85%
• Volcon (EMPD): -17.44%
• Membership Collective Group (SHCO): +15.58%
• Riskified (NYSE:RSKD): -12.36%
• Huami Inc (ZEPP): +15.18%
• Yext Inc (NYSE:YEXT); CEO proposes to acquire company at $9 per share: +12.98%
• Tonix Pharm (NASDAQ:TNXP): -14.56%
• Tilray Inc (NASDAQ:TLRY): +11.51%

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Investing.com -- RBC Capital Markets upgraded Sunrun Inc (NASDAQ:RUN). to Outperform from Sector Perform and raised its price target to $16, saying recent Treasury guidance on solar tax rules removes overhang related to it. While also validating company’s long-term cash generation story.

The brokerage said new guidance on “commence construction” rules and domestic content requirements provides clearer visibility for residential solar incentives through 2029, easing concerns that a policy shift under the Trump administration could derail safe-harbor benefits.

RBC believes Sunrun now has better certainty to continue scaling its installations and sees cash generation improving sharply over the next two years.

Sunrun is also expected to benefit from the expiration of the federal 25D tax credit for customer-owned systems at the end of 2025. It could push more demand into third-party-owned solar systems (TPO), where Sunrun is the market leader.

RBC estimates nearly half of residential demand still comes from non-TPO systems today, but those installers may need to shift toward leasing or partner with Sunrun once the incentive expires.

RBC projects Sunrun will add around 139000 customers in 2026, roughly 20% year-on-year growth, with cash generation rising to about $550 million, up from $308 million in 2025.

Analysts see further upside from lower customer acquisition costs, storage adoption and higher electricity rates.

With the stock now trading at what RBC estimates is a roughly 15% cash yield to 2026, the firm argues the shares are undervalued relative to long-term growth potential.

Investing.com -- U.S. stock futures slipped slightly Monday ahead of a summit between U.S. President Donald Trump and Ukraine President Volodymyr Zelensky in Washington in an attempt to arrange a potential peace deal.

Here are some of the biggest premarket U.S. stock movers today:

• Palo Alto Networks (NASDAQ:PANW) stock rose 0.4%, with the cybersecurity firm expected to headline the slate of July-quarter returns after the closing bell.

• Novo Nordisk (NYSE:NVO) stock rose 3.8% after the drugmaker received U.S. approval for its weight-loss drug Wegovy to treat a serious liver condition.

• Tesla (NASDAQ:TSLA) stock fell 0.6% after the Times reported that the EV manufacturer is offering discounts of up to 40% to car leasing firms in the U.K. to shore up sliding sales.

• Unitedhealth (NYSE:UNH) stock rose 2.8%, adding to the previous session’s 12% gains after Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) took a sunstantial stake in the healthcare company.

• Dayforce (NYSE:DAY) stock surged 28% after a Bloomberg report said PE firm Thoma Bravo is in talks to acquire the HR management software firm.

• Soho House (NYSE:SHCO) jumped 16% after the Wall Street Journal reported that a group of investors led by New York-based MCR Hotels is nearing a deal to take the members’ club operator private.

• Sunrun (NASDAQ:RUN) stock rose 2.2% after RBC upgraded its stance on the energy storage company to “outperform” from “sector perform”, citing greater certainty on the longer-term opportunity.

• CVS Health (NYSE:CVS) stock gained 2.2% after UBS upgraded its stance on the pharmacy company to “buy” from “neutral”, following two strong consecutive quarters of execution and early signs that the Healthcare Benefits segment fixes are on track.

• EPAM Systems (NYSE:EPAM) stock rose 2.7% after TD Cowne lifted its rating on the software company to “buy” from “hold”, saying the currency share price gives little to no credit for the company’s recovering growth trajectory and completion of its global delivery reorganization.

• CSX Corporation (NASDAQ:CSX) stock fell 0.2% after BMO Capital Markets downgraded the transport company to “market perform” from “outperform”, saying M&A upside is likely already priced in.

Investing.com -- RBC Capital Markets said Hugo Boss (ETR:BOSSn) is showing stronger execution in 2025, with a clear focus on cost efficiency and tighter operational control, in a note dated Monday. 

The brokerage noted that operating expenses grew only 1% over the past 12 months, even as cost inflation continued across the premium apparel sector. 

It expects further savings in the second half of the year from store portfolio rationalization, including rent negotiations and underperforming store closures, as well as from administrative cost reductions.

RBC flagged that the gap between Hugo Boss’ constant currency sales growth and expense growth has widened again after narrowing in early 2024, when sales growth slowed. 

The improvement signals what analysts described as better operational grip at a time when many peers continue to face margin pressure.

Financial metrics point to steady progress. Hugo Boss’ gross margin is forecast at 62% in 2025, up from 61.8% in 2024. 

The EBIT margin is projected to increase to 9.1% in 2025 from 8.4% a year earlier, with further gains to 10.2% by 2027. 

Adjusted EBITDA is expected to rise 6.3% this year to €535 million, while net income attributable to equity holders is set to increase to €235 million in 2025 from €213 million in 2024. 

Earnings per share are forecast to climb 10.1% to €3.41 this year, with a three-year compound annual growth rate of 10.5% through 2027, higher than several global peers.

RBC pointed to early signs of topline stabilization. Sales in Germany and France returned to growth in the second quarter, while the U.S. market showed modest recovery. 

July data also reflected improved momentum, with apparel sales accelerating in the U.K. and U.S. airport footfall rising, which analysts view as an indicator of improving consumer activity. 

Hugo Boss is also expected to benefit from moderate global price increases in the second half, which should help support gross margins. 

Its exposure to U.S. tariffs remains limited, with about 4% of U.S. imports sourced from China.

The brokerage described the stock’s valuation as undemanding. Hugo Boss trades at roughly 12x 2025 estimated earnings, more than 50% below the broader luxury sector, compared with a historical average discount of 33%. 

RBC said part of the valuation support comes from Frasers Group, which has steadily increased its position in the company. 

Frasers now holds a direct stake of about 25% and an additional 30% through derivatives, making it the largest level of exposure in the past five years.