Broker tips: Antogasta, Mothercare, Cineworld...

6th Jan 2011 14:23

Nomura has downgraded Antofagasta from a 'buy' to 'reduce' as it struggles to find value in the copper miner which has more than doubled over the last six months."We think the risk to our forecasts is that copper prices experience an even more aggressive short-term price 'spike', fuelled by the introduction of copper exchange-traded funds but also with a much greater risk of a boom-bust scenario similar to the nickel market in 2006-07," he adds.Nomura's preferred picks for copper exposure are First Quantum ('buy': target price of C$120) and Xstrata ('buy': target price of 1,800p).Peel Hunt suggests the reason for Mothercare's weak trading update could be that the group was simply out-competed, rather than purely suffering from weather disruption.The mother and baby goods retailer today reported third quarter pre-tax profit below market expectations because of weak UK life-for-like sales, with the blame placed entirely on bad weather."We assume consumers chose to shop elsewhere, whether online or at the superstores, regardless of the weather and note Direct to Home appears not to have enjoyed a boost in trading either," says analyst John Stevenson.Profit estimates for 2012 are reduced by 10% and broker keeps the stock as a 'hold', with a target price of 550p.Panmure Gordon recommends Cineworld as a reliable income stock, with strong cash generation and a well-maintained dividend yield of 5% making it worth a 'buy' rating.Even though the bad weather last month had a negative impact on both box office and retail revenues during the important festive period, the strong performance from the rest of the year means that profitability should be in line with expectations."Having spoken to management, we will not be making any change to our 2010E or 2011E PBT forecasts of £35.2m and £37.4m, respectively," Panmure says.It leaves the target price at 240p.