Broker tips: Antofagasta, Reed Elsevier, Cineworld

1st May 2013 11:20

FIrst-quarter production results from copper miner Antofagasta were well-received by the market on Wednesday but Investec has kept its 'reduce' rating for the stock given a weaker commodity price environment."The recent drop in commodity prices is leading toward negative provisional price adjustments totalling c$88m for the quarter. Should commodities drop further then this is a growing area of risk. We expect to see some further negative adjustment at the interim results, although ANTO does have a strong balance sheet to handle such issues."UBS has downgraded its rating for publishing and information business Reed Elsevier from 'buy' to 'neutral' given the stock's recent outperformance.In spite of limited upgrades, the broker said that Reed Elsevier has outperformed the market by 25-35% since the middle of 2012. "We had often suggested that this long awaited outperformance was feasible given a depressed valuation and a lack of appreciation for the transformation under way. The recent rerating, however, suggests the benefits of this transformation are now more widely recognised and we downgrade to 'neutral'."Canaccord Genuity has kept its 'buy' rating and 360p target price for cinema chain Cineworld saying that the Office of Fair Trading's (OFT) referral of the Picturehouse takeover to the Competition Commission will not affect the business.Analyst Wayne Brown admitted the the OFT referral was of no surprise but "will have no impact on the group as both businesses are being run independently of each other".BC