Broker tips: AstraZeneca, Kazakhmys, Imperial Tobacco

2nd Feb 2012 11:16

Panmure Gordon has reiterated its buy recommendation for drugs giant AstraZeneca after the group's fourth quarter results came broadly in line with forecasts.However, the broker says the results were "overshadowed" by Astra's lowering of its mid-term guidance contribution from recently launched and pipeline products to $2-4bn, down from a previous estimate of $3-5bn.Nevertheless, Panmure seems pleased by the announcement of a 7,300 headcount reduction and share buyback programme of $4.5bn in 2012, well above its own $1.5bn estimate.The broker keeps its 3,600p target price, saying that the stock is trading (based on 2012 full-year forecasts) at a 33% price-to-earnings discount to sector peer GlaxoSmithKline.Galvan Research and Trading has labelled copper mining giant Kazakhmys as a buy after the firm met all of its major output targets in 2011."With mining stocks in general buoyed by the latest jump in metals prices, Kazakhmys is currently a standout in the sector on the basis that according to its January update production it is well positioned to take advantage of high demand for metals, especially copper," said Galvan's head of research Andrew Gibson.Galvan gives Kazakhmys a target price of 1,300p.Nomura has upgraded Imperial Tobacco from reduce to neutral, saying that a focus on operational pressures has shifted to the prospect of M&A.Nomura downgraded the stock to reduce back in November on the back of concerns over margin pressures and the view that major M&A activity in the sector would not materialise until late 2012 or 2013."Post the resolution of government stake sale at JT [Japan Tobacco] in April/May, and the medium-term strategy outlook presentation from JT as well in April - we see the investment case inevitably being more influenced by prospects for consolidation activity and less influenced by prospects for earnings cuts on risks of underperforming versus consensus (volumes and margins)," the broker said.The broker maintains its 2,150p target price.BC