Broker tips: Burberry, Premier Foods, Hunting

20th Apr 2011 12:21

UBS raises its numbers for luxury fashion brand Burberry after a bullish conference call that suggested another strong year ahead.The broker expects another year of solid underlying top-line growth heading into 2012: retail is said to benefit from a 12-13% increase in selling space and continued momentum from the Chinese business; mid-teens growth expected in wholesale in the first half; and licenses are predicted to grow in mid-single digits.Driven by an estimated 2% beat to its 2011 forecasts - and reflecting some operating leverage - the broker ups its adjusted pre-tax profit estimates for 2011 by 3% to £300m, "broadly in line with management's comments that numbers will be at the high of consensus," said analyst Eva Quiroga.Reflecting these increases, the broker raises its target price to 1,200p, from 1,150p, and keeps its 'buy' rating.Credit Suisse predicts that Premier Foods' interim management statement for the first quarter (due at the end of the month) will prove a little disappointing, but still keeps its 'outperform' rating on the Hovis bread and Branston pickle maker.Sales have got off to a very slow start this year, according to analyst Charles Mills: "We believe Premier Foods' markets are down something like 7% in Q1, and while the group has gained some share, its sales will still be off we'd guess something like 5%. So not a good start." However, the "truer comparatives really only start in the second quarter we believe," said Mills. The 38p target price is retained.FinnCap moves its rating on energy services group Hunting to a 'hold', from 'buy', following the recent share price performance which has seen the stock rise around 37% since the start of December."The group's trading update for its first quarter highlights trading to be in line with expectations. [However,] The group continues to invest heavily in new operations and capacity, which is taking some time to feed through to increased profitability," said analyst David Buxton.Despite the downgrade, finnCap maintains its current year forecasts, which point to earnings per share growth of 18% (2012: 13%). The target price is held at 850p.