Broker tips: British Airways, Anglo American, Xaar...

21st Oct 2010 12:28

German broker Commerzbank remains keen on British Airways and expects the airline to benefit from a 'dynamic rebound in the revenue environment'.Based on the expected very strong results for the second quarter, the German broker sees clear upside to current market expectations for full-year earnings and to the company's most recent guidance (currently: breakeven at the PBT level).Investors will also focus on the wage negotiations with cabin crews as well as the implementation of the merger with Iberia and the Transatlantic joint venture with American Airlines.Commerzbank's target price is 320p and its stance 'Add'. Results are due on 29 October.Panmure Gordon is reviewing its forecasts and 'buy' recommendation for Anglo American after the mining giant released mixed production figures in its interim statement today.In the third quarter, Anglo Platinum's output increased 11% from the same period previously to 0.70 million ounces, with an expected 2.5 million ounces to be produced for the full year. However, the broker notes that "cash costs in the period rose to just over £1,085/ounce from £1,058/ounce in the first half. Given this, Anglo Platinum's target to keep nominal cash costs flat at 'around £1,013/ounce' both this year and next looks increasingly unachievable".Additionally, the group's South African-based iron ore company Kumba saw production and sales impacted by planned rail maintenance in August and three separate train derailments during the quarter.As a result, the broker is placing its 2,871p target price and 'buy' recommendation under review.FinnCap has upgraded its forecasts for Xaar after the group's strong quarterly trading exceeded expectations.Today's third quarter statement from the printer ink technology group confirmed strong trading ahead of expectations as demand for its platform 3 product (P3), the Xaar 1001, continues to outstrip supply.The company has been forced to halt the planned closure of its Swedish manufacturing plant to cope with increased demand. The expansion of capacity will require an investment in additional rooms and equipment which will be part funded by its equity issue announced this morning worth a net £14m.The broker has upgraded its pre-tax profit forecast for 2010 from £4.5 to 5m, and for 2011 from £6.5 to £8m. The expected earnings per share growth profile is around 50% for this year and the next, as the broker expects the stock to "continue to outperform", retaining its 'buy' recommendation.The target price is currently under review.