Broker tips: BT, Renesola, Carluccio's

17th May 2010 12:16

A move into profit at BT Group and a positive investor day has caused Standard & Poor's (S&P) to lift its target price on the telecoms giant, although there's "still some room for improvement".The broker maintained its 'hold' rating, but raised its target to 130p from 110p, "encouraged" by recent developments.Revenue estimates are left broadly unchanged, though adjusted EBIT forecasts for FY 11-FY 13E rise by about 15% on better-than-expected EBITDA guidance.Earnings per share estimates are increased by around 80% due to higher EBITDA and lower pension costs. "The uncertainty about the pension regulator review remains a key concern in our opinion, however, we believe the most likely outcome is an acceleration of the top up programme that in our view BT can manage without comprising its promise to grow the dividend," S&P analyst James Crawshaw said."Overall, we were encouraged by the results and analysts' day."Nomura thinks ReneSola, the maker of solar wafers used in the production of solar cells, can deliver a strong earnings swing this year after last week's first quarter numbers beat expectations."A Q1 results beat with an increased outlook along with strong markets confirm our view that Renesola can outperform its peers," it told clients Monday."We see the company as on track to build further on its cost-leadership position and, thus, deliver a strong earnings swing this year."Earnings per share forecasts for 2010 go up by 38% on the back of higher volumes, while predictions for 2011 rise 45% to US$0.57.The broker keeps its 'buy' stance and bumps up its target price to 250p from 190p.An impressive first half performance even in the face of a higher rate of VAT and minimum wage has prompted KBC Peel Hunt to nudge up its target price on the Italian restaurant chain Carluccio's.The broker, which has a 'buy' rating on Carluccio's, lifts its target price on the stock to 109p from 108p.It notes that Carluccio's performance through the recession proved its strength in the face of adversity. 'The consumer environment remains tough but the performance to date gives us confidence that Carluccio's can continue to deliver,' it says.