FTSE 250 movers: Tullow slips on Ghana tax row; Drax lifted by TP upgrade

(Sharecast News) - FTSE 250: 20,132.85, +0.04% at 1524 GMT. Tullow Oil has filed requests for arbitration with the International Chamber of Commerce in London over a $387m tax dispute with Ghana.

The tax assessments relate to the disallowance of loan interest deductions for the fiscal years 2010 - 2020 and proceeds received by Tullow under its business interruption insurance policy.

Tullow argued that two disputed tax assessments, breach its rights under its petroleum agreements and the decision to file for arbitration does not result in any change to the overall exposure previously disclosed.

It said that resolution through arbitration "will bring certainty, which is in the best interest of all stakeholders".

"Notwithstanding this formal step, Tullow intends to continue to engage with the government of Ghana with the aim of resolving these disputes on a mutually acceptable basis," the company said on Tuesday.

JPMorgan Cazenove lifted its price target on Drax on Tuesday to 900p from 850p and said it remains on its "Positive Catalyst Watch" into results later this month.

The bank - which maintained its 'overweight' rating - noted that Drax shares are trading in line with early December 2022 levels despite having since seen a strong trading update and a significant improvement to the government's proposed Electricity Generation Levy.

"Looking further back, Drax shares are only up 6% since the start of 2022 despite the materially higher power price outlook post Russia's invasion of Ukraine, and material EBITDA and EPS upgrades, even after windfall taxes announced in 2022," it said.

JPM pointed out that the shares are down 10% year-to-date on a lower commodity outlook and said it considers this an overreaction, in a context where the market did not price in the value of higher power prices to begin with.

"Drax remains a top pick and we keep the company on Positive Catalyst Watch into FY22 results (February 23).

"We expect strong guidance on EBITDA for 2023 and see further catalysts in 2Q23 (publication of UK Biomass Strategy, and a potential update from the company on US BECCS)."

JPM said its increased price target implies 44% upside.

Budget airlines easyJet and Wizz Air both benefited from upbeat earnings at holiday giant TUI, which narrowed losses and said winter/summer bookings were resilient against the cost-of-living crisis.

FTSE 250 - Risers

easyJet (EZJ) 496.00p 5.49% Aston Martin Lagonda Global Holdings (AML) 196.80p 4.85% Darktrace (DARK) 258.40p 3.94% Drax Group (DRX) 646.50p 3.11% Centamin (DI) (CEY) 101.10p 2.56% Wizz Air Holdings (WIZZ) 2,801.00p 2.45% Crest Nicholson Holdings (CRST) 239.80p 2.39% ASOS (ASC) 840.50p 1.88% Dechra Pharmaceuticals (DPH) 3,040.00p 1.67% ITV (ITV) 87.80p 1.67%

FTSE 250 - Fallers

Bakkavor Group (BAKK) 109.60p -3.01% Essentra (ESNT) 228.00p -2.98% Genuit Group (GEN) 319.50p -2.74% Tullow Oil (TLW) 34.28p -2.67% Chemring Group (CHG) 287.00p -2.38% RIT Capital Partners (RCP) 1,978.00p -2.08% Molten Ventures (GROW) 396.20p -1.98% Bridgepoint Group (Reg S) (BPT) 245.00p -1.84% Trainline (TRN) 263.40p -1.83% Savills (SVS) 994.50p -1.83%