Broker tips: Admiral, Tullow Oil, Regus

9th Nov 2011 11:08

Investec says that "dark clouds [are] forming" at insurance giant Admiral, as it reiterates its sell rating and 843p target.Shares plunged on Wednesday morning after the firm's statement which warned 2011 profits would be at the lower end of expectations (just 10% higher than 2010) due to a jump in personal injury claims. "We see this IMS as an admission that Admiral is not immune from market forces and this will disappoint the market, we believe. It remains our view that significantly out-performing a commoditised market for sustained periods is impossible," said Investec analyst Kevin Ryan.Despite shares in Tullow Oil taking a tumble on Wednesday due to the reduction to full-year production estimates, Evolution Securities says that it has made no changes to the stock's valuation and reiterated its buy rating.Evolution said that the revelation was unsurprising: "The short term takeaway from today's IMS is slightly disappointing even though the market has been aware of the Jubilee ramp up issues for a while," said analyst Richard Griffith.Nevertheless, the broker said that bigger picture still remains very strong, given new developments in Ghana and a new basin opening exploration success in French Guiana. "Critically, there is no change to the current resource estimates."A 1,550p target price is kept.Credit Suisse has upgraded workspace provider Regus from neutral to outperform and upped its target price from 80p to 100p.The broker has raised its 2012 earnings per share (EPS) estimate by 17% (which still is below consensus forecasts) "to reflect improvements in market pricing, implying stable EBIT [earnings before interest and tax] from H211E to H212E between £37-38m for each interim period."Regus achieved record levels of mature occupancy in the first half, while pricing has continued to improve from a low base, the broker said. "These factors will, we believe, drive strong operational gearing over the next two years."BC