Broker tips: Carnival, Meggitt, Rockhopper

16th Jan 2012 10:36

Credit Suisse has reassessed its view on cruise ship operator Carnival following the news that one of its luxury liners grounded off the coast of Italy at the weekend.The broker maintained its neutral rating on the stock but said that incident will be a "black mark on the cruise industry" as well as a negative headline for Carnival.Nevertheless, the broker says that while investors may want to avoid the stock in the near-term, it is still positioned for the long-term. The "near-3% dividend yield and history of returning capital through buybacks should provide a backstop for the stock". The 2,285p target price was unchanged.UBS has upgraded aerospace, defence and energy market engineer Meggitt from sell to neutral on the back of improving foreign exchange movements and a nascent business jet recovery in North America.The earnings per share forecast for 2012 is raised by 2.4% and for 2013 by 4.5%, translating to a higher target price of 365p (from 330p previously).Merchant Securities remains a buyer of oil and gas firm Rockhopper Exploration following speculation that it is looking for a partner to share development costs for its Falkland Island assets, with reports circulating that this could lead to a takeover from Cairn Energy."We believe Cairn would be a reasonable partner for Rockhopper given the company's proven record of developing oil assets...We believe Rockhopper's fundamentals and in particular the disconnect between the company's stock price and its value creates a compelling case for such rumours," analyst Brendan Long said.The broker maintained its buy rating and 428p target price.BC