Broker tips: Admiral, Britvic, SSE

8th Dec 2009 17:31

Morgan Stanley sees Admiral hitting a sweet spot and raised its price target for the car insurer by 6% to 1,344p. The broker reiterates its 'overweight' stance on Admiral, citing the group's improving underwriting margins, its growth as policyholders shop around more and improved profit commission terms from its reinsurers coming online. Trading on a 12.9x 2011e P/E with 20% EPS CAGR over the next three years and with a very defensive balance sheet , Morgan Stanley views Admiral's risk-reward as highly attractive and sees 25% upside to its new price target. 'The company maintains it low risk profile by using reinsurance to reduce downside underwriting risk and largely pays for this on a flat fee basis, retaining much of the upside,' the broker said.Britvic's strong earnings guidance as it delivered full year results recently have prompted the broker Citigroup to raise its target price on the drinks firm to 445p from 400p. Citi noted that Britvic, which sells Robinsons fruit juice and has the license for Pepsi in the UK, is more upbeat than previously on the prospects for its fizzy drinks operations. At 11.4 times 2010 projected earnings, it thinks Britvic's shares are attractively priced and notes that the company offers a sector-leading dividend yield of 4.5%. Citi has a 'buy' rating.Goldman Sachs has reiterated its 'sell' stance on Southern & Scottish Energy after regulator Ofgem's final price review. The broker cut its price target to 1,203p.Credit Suisse, meanwhile, has trimmed its forecast for SSE's earnings by 4% for 2011-13 to reflect lower gas prices. The target price is 1,225p and the stance 'neutral'.