Broker tips: BG, Burberry, ASOS

16th Sep 2011 12:52

Shares in BG Group were helped higher by speculation that two Chinese oil companies are interested in acquiring BG's Brazilian business, which UniCredit believes could act as a catalyst for the stock."Given the recent resource estimates increase, it is possible that BG is considering ways to fund its Brazilian developments. This is why the article could act as a catalyst for the stock, given that a potential disposal of part of the assets could add significant value to the stock," said analyst Stefano Vitali.UniCredit raises the target price on the stock to 1,880p, from 1,800p, and retains its buy recommendation.UBS has kept its neutral rating but cut its target price by 100p for British luxury brand Burberry after spending two days with senior management."Our main takeaway was that the company is in a structurally better position versus 2008 as it benefits from higher exposure to emerging market consumers, superior inventory controls, lower wholesale mix and a leaner supply chain," said analysts Fred Speirs and Eva Quiroga.However, the broker maintains its cautious stance, saying that these structural improvements are factored into the price.The target price is scaled back from 1,550p to 1,450p on the back of a new target price-to-earnings ratio of 20 ("to reflect a blend of peak and mid cycle levels") and a 20% probability to the M&A premium.Following the 25%-plus fall in ASOS's share price over the summer, Peel Hunt has upgraded the fashion retailer from sell to hold and hiked its target price by an optimistic 400p.Peel Hunt attended the ASOS's site visit at its new 500,000 sq ft distribution centre in Barnsley on Thursday, and said that now that the transition is complete, the firm is pursuing a number of efficiencies. Also, "While UK sales are likely to have suffered over Q2, in keeping with the High Street, we expect international to remain impressive," said analyst John Stevenson.The target price is hiked from 1,500p to 1,900p.BC