Broker tips: Anglo American, Weir, IAG

4th Mar 2013 12:55

Markets seem to be getting ahead of themselves with regards to Anglo American, analysts at Nomura write this morning.In particular, optimism regarding the incoming new Chief Executive Officer, Mark Cutifani, on April 3rd, has seen the shares rise to the point where investors are now paying approximately 14 times the company's estimated earnings for this coming year, versus 13 times for rival BHP Billiton or 9 times for Rio Tinto. Investors think he will move to unlock value by unbundling assets. However, that does not justify the above premium. Then there is the fact that current year consensus earnings are too high in their opinion. The other negative factors include the weak track record on delivery, the continuing operational issues at key assets and the South Africa risk. For all of the above reasons Nomura lowers its price on Anglo American to 1,700p from 1,800p and downgrades to reduce from neutral.Risk over the medium-term for industrial engineering outfit Weir Group's share price lies to the upside, analysts at Investec wrote to clients on Monday morning. However, the company's share price is now almost at its target price, hence their decision to move to a 'hold' stance from 'buy.'In a more detailed manner, the analysts explain that they now expect the company's sales to be 6% lower than previously forecast, at £2,578m, on lower Minerals growth rates and underlying reductions in Oil & Gas, offset by the contribution from Mathena. On the other hand, those lower forecasts are largely compensated for by higher than expected margins in all divisions, lower taxes and an upwards re-rating in the peer-group. A four-strong team of research analysts at Credit Suisse have increased their target price for International Airlines Group (IAG) while maintaining the global airline group's 'outperform' rating.More specifically, the analysts raised their target price to 295p from 259p saying that reasons for optimism were multiplying.Amongst their main takeaways from last week's full year results were: impressive pricing on transatlantic routes, signs of life in long haul premium demand and a continued commitment to restructuring Iberia (€270m restructuring charges booked). AB