Broker tips: CSC, Marks & Spencer, Avanti Comms

11th Jan 2011 12:55

Even though Simon Property Group (SPG) has withdrawn its offer for shopping centre owner Capital Shopping Centres, Panmure Gordon still sees good prospects in the business if it can continue with the acquisition of the Trafford Centre.The US real estate giant SPG announced Tuesday that it has no intention to make a firm bid for CSC following its inability to secure appropriate due diligence or the acknowledgement that the Trafford Centre acquisition would not proceed.While SPG was put off the purchase because of the high price, Panmure believes that the Trafford Centre "would make an attractive and strategically good acquisition for CSC.""This is a rare opportunity to acquire in its entirety the UK's fourth largest shopping centre, and would give CSC ownership of four of the top six UK out-of-town shopping centres," the broker said.The broker also adds that while the shares may edge off on today's announcement, its target price of 400p reflects renewed investor interest in the shopping centre sector. A 'hold' rating is retained.Christmas trading at Marks & Spencer (M&S) impressed financial services firm Matrix, as the retail giant beat market consensus, with the poor weather having less of an impact on sales than feared."While market expectations were quite muted at +2.5% for general merchandise, which is by far the higher margin part of the business, like-for-like (LFL) sales were up 3.8% despite poor weather," say analyst Tom Gadsby.Additionally, LFL food sales growth also surpassed expectations coming in at 1.8%, against the consensus of 1.5%.While Matrix expects M&S's final quarter to be very tough when comparing against a 9% sales growth last year, the broker says that the group has been beating improving comparisons all year "and we see little reason for them not to do so again."A 'buy' rating and target price of 477p is confirmed. Equity research provider Equity Development values shares in UK-based satellite broadband group Avanti Communications at around twice the current level as the company is "now established as a credible operator in a growing market where demand far exceeds supply."Avanti sells satellite broadband services to telecoms companies which use them to supply residential, enterprise and institutional users. In November, the group successfully launched its HYLAS 1 geostationary satellite, which is the first superfast broadband satellite launched in Europe.With its first satellite in orbit, full funding is in place for the construction, launch and operation of its second satellite (HYLAS 2). Its third project has also begun (HYLAS 3), and Equity Development says that "Avanti is moving ahead to become a major player in this market."The broker's revenue estimate for 2011 stands at £5.2m, whereas the in 2012 it is expected to be £28.1m. The target price is 1,319p, more than double the current share price of around 620p.