Broker tips: BP, Logica, Informa

1st Jun 2012 11:18

Jefferies has welcomed BP's decision to sell its 50 per cent share in TNK-BP, reiterating its buy rating and 525p target price for the stock on Friday morning.Jefferies value's BP's share of TNK-BP at $30bn, which is 11% of its BP group net asset value (NAV) estimate, although 26% of its current market capitalisation."Given the collapse of trust and corporate governance at the company we believe BP should exit and reinvest in more profitable areas with less political risk, if it can achieve something close to fair value for the stake."Merchant Securities has assessed the possibility of a counter-bid for business and technology service company Logica, one day after Canadian group CGI offered to buy the firm for 1.7bn pounds.The agreed cash bid by CGI was for 105p per Logica share; on Thursday the stock settled at 110.9p "indicating the market sees some opportunity for a counter-bid," said Merchant analyst Roger Phillips.While not completely impossible, the broker thinks that a counter-bid looks fairly unlikely: "Logica is too big to swallow for Indian players, niche deals in the hundreds of millions range being more preferable and having less strategic risk. This is the first transatlantic IT services purchase of large cap European IT services in over fifteen years, illustrating the rarity of this type of approach."Peel Hunt has upgraded its rating for publisher and trade events group Informa from hold to buy, following the steep fall seen in the share price since April."In our view, the falls in the stock price have now gone too far and we move our recommendation back to buy on the basis of solid underlying fundamentals, valuation and a 5.4% yield." The broker leaves its 457p target price in place.BC