Broker snap: Panmure Gordon moves to "buy" on CVS

27th Sep 2011 11:44

Results ahead of expectations from veterinary practice owner CVS prompted Panmure Gordon to raise its rating on the stock to "buy" from "hold"."While the economic environment has no doubt had an impact on LFL (like-for-like) revenues and margins as previously flagged, cash generation and subsequent debt reduction has exceeded our expectations despite acquisitive activity during H2 2011," the broker said. "We maintain our forecasts and target price of 110p post these results and, with 18% upside potential coupled with some unexpected yield support, we switch our recommendation from Hold to Buy."Panmure keeps its 110p target price on CVS. "The industry remains fragmented, which should enable the company to deliver above average growth in an uncertain market and, as such, we believe the risk reward is positive from here," it said.---RG