The UK stock market response to the US-UK trade agreement announced Thursday was mixed with clear winners such as aerospace company Melrose Industries. mro Rolls Royce RR The day. Many of these stocks remained little different on Friday.
Details of the contract appeared on Thursday afternoon, and tariffs were completely reduced or removed for UK exports such as cars, steel and aluminum. There was also a promise made by President Donald Trump about “priority treatments” for future drugs.
Rolls-Royce was a clear beneficiary as US Secretary of Commerce Howard Lutnick designated that the company’s engine and plane parts could be exported from the UK without US tariffs.
The company’s stock has grown nearly 35% this year despite wobbling in early April as the global market was sold, but is believed to be undervalued according to Morningstar estimates. The UK listed company focuses purely on aerospace manufacturing, but the well-known luxury car brand is owned by German car company BMW. BMWstocks have risen by about 5% over the past five days.
Shares in fellow aerospace company Melrose, the parent company of GKNAEROSPACE, have grown 7% over five days at 470p. However, they are still well below the estimated Morningstar fair value of 800p.
Rolls-Royce Holdings’ Important MorningStar Metrics RR.
Analyst: Loredana Muharemi
Auto exports to the UK will be reduced to 10% from the previous 25%, which concluded with up to 100,000 cars. Previous 25% tariffs on British steel and aluminum goods have been discarded.
One of the UK companies that will be most affected by these tariff changes is Jaguar Land Rover (JLR), a manufacturer of high-end vehicles and SUVs exported globally to markets such as the US. The company is owned by Indian conglomerate TATA and is not listed on the UK stock market, making it difficult to measure investors’ responses. Aston Martin Lagonda Stocks AMLthe largest listed UK auto stocks and luxury car manufacturers rose sharply on Thursday, winning 10% in five days.
Prime Minister Kiel said on Thursday at JLR’s automobile factory in Solihull:
How will trade contracts affect European auto stocks?
Morningstar equity analyst Lela Suskin said the deal would not move the needles of the UK automaker.
“UK automakers have a very small share of the US market. The current share is somewhat protected by tariff adjustments. If you want to win shares, you’ll be in the same condition as Europeans (higher tariffs). So the status quo will be maintained.”
European car stocks are one of the biggest winners on Thursday, with Stellantis sltam It earned almost 5%. Ruskin dismissed the idea that these benefits fall on investors who want similar priorities for European automakers affected by tariffs.
“In my view, the impact of UK transactions on European automakers is negligible,” she said, adding that the impact on the industry should be assessed by company.
What did the UK’s biggest companies say about tariffs?
The recent revenue season focused on the impact of tariffs on a company’s profitability and the outlook for the remainder of the year. Many global companies extract full-year forecasts from full-year forecasts. Arm Holdings etc..
Before the trade agreement was announced on May 9, investors were already given insight into how the UK’s biggest companies were thinking about how to manage tariff risks.
Unilever, a major consumer goods company ULVR He said the impact of tariffs on corporate profitability is expected to be “limited and easy to manage.”
A spokesman for Unilever said, “We are aware that the macroeconomic environment, currency stability and consumer sentiment remain uncertain and will be agile to adjust our plans as needed.”
Asia-centric bank HSBC HSBA The expected credit losses for the first quarter are expected to increase by $200 million to $900 million, reflecting “an increasing uncertainty and worsening of the economic outlook for progress due to geopolitical tensions and increased trade tariffs.”
HSBC said: “A further escalation of tariffs and trade tensions could lead to reduced trade volumes, investment, consumer spending and, ultimately, low global GDP growth. Supply chains could be exposed to new pressures from a fragmented trade landscape, and inflation could rise again.”
Paul Soliott, CEO of AstraZeneca AZNThe UK’s biggest company said the company’s strong growth momentum continues in 2025.
He also hinted at AstraZeneca’s plan to shift some of its manufacturing capabilities in response to the worst impacts of President Donald Trump’s trade tariffs.
Rival company GSK GSK The company said it is well equipped to deal with tariffs President Donald Trump may place on medicines. This was before the trade agreement was announced.
During the media call, CEO Emma Walmsley said: “As far as tariffs are concerned, we start from a position of strength. Obviously there is still some liquidity here. We look very carefully, but we are well prepared and we are working to free to navigate some levers and alleviate them for a while.”
The company also aims to protect it from the worst effects of tariffs, in order to save money using artificial intelligence and help find inefficient practices, such as using technology to improve procurement.
James Guard contributed to this story
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