Broker snap: Fuller's worth another round, says Panmure

11th Jun 2010 13:27

Results from Fuller, Smith & Turner have, like a pint of the brewer's London Pride, gone down well.After a better than expected set of results from the brewer and pubs group owner Panmure Gordon has reiterated its "buy" recommendation and 614p price target."Fuller's continues to offer a rare and compelling combination of earnings and dividend growth, is conservatively financed, and offers good forecast upgrade potential. Yet the group is trading on only a small EV/EBITDA [enterprise value/earnings before interest, tax, depreciation and amortisation] premium to the peer group; we view this as anomalous," the broker suggests.KBC Peel Hunt says the company has "a very well operated South of England [pubs] estate" but says management is right to be cautious about the outlook for the consumer. Nevertheless, "as these results demonstrate, the group is well placed in what is likely to be a challenging market."KBC has upgraded its mid-range profit before tax forecast for fiscal 2011 by 3% to £27.1m and its earnings per share estimate is edged up to 34.1p from 33.1p, putting the share on a prospective price/earnings ratio of 16.It rates the shares a "hold" and has a price target of 540p, slightly below the current share price.