Broker tips: Compass, Capco, Halfords

21st Nov 2012 10:46

In spite of the negative market reaction to Compass Group's full-year results on Wednesday morning, Nomura has maintained its 'buy' rating and 800p target price for the stock, saying that the figures were in line with its forecasts.Nomura said: "Our FY 13 forecasts assume a slowdown in organic revenue growth to 4.7% [from 5.4% in the year just gone] and 10 basis points of margin upside. The implied slowdown in organic growth and new buy-back suggest that forecast risk is on the upside."The broker added: "We retain a 'buy' recommendation based on the attractive structural growth in outsourcing, strong FCF [free cash flow] generation and restructuring potential."Seymour Pierce has said that the news that Capital & Counties (Capco or CAPC) has received consent from another council for the Earls Court developments represents "significant process" for the business; however, the broker has maintained its 'hold rating and 233p target price for the stock.Analyst Sue Munden said: "the current share price is now 20.9% above the forecast NAV and equal to our FY14 estimate. The shares may well react positively to this news this morning but we feel the current price reflects much of the future value."Halfords Group's first-half results on Wednesday may have been met with profit-taking by investors, but Panmure Gordon reiterated its 'buy' rating and 400p target price for the stock, saying that there's still '"ots of opportunity" for the business."We think that there are a few easy wins and that investment in a service-based culture can unlock a substantial sales and profit opportunity. Therefore, we view the opportunity to 'buy' into Halfords at just 11x trough earnings as a good entry point, as its valuation moves into line with other fast-growing, cash generative retailers."BC