Broker tips: Diageo, Afren, Chemicals stocks

26th Jun 2013 11:20

Nomura has trimmed its target price for beverages group Diageo from 2,400p to 2,250p ahead of its results next month, but has kept its 'buy' rating for the stock, saying that the Guinness maker has strong defensive attractions in uncertain markets."With its wide portfolio of emerging markets (none accounting for over 4.0% of group earnings before interest and tax) and its large exposure to US (c35%), we see some strong defensive characteristics and believe that medium-term revenue guidance of 6.0% per annual can still be achieved, even with some emerging market slowdown," said analyst Ian Shackleton.Canaccord Genuity has lifted its target price for oil and gas group Afren from 210p to 220p and maintained a 'buy' recommendation after the company reported a successful exploration well offshore Nigeria on Wednesday."Clearly results from the well to date indicate the structure is larger than the pre-drill estimate, with further deepening planned to target additional zones," the broker said.UK-listed chemicals stocks were making decent gains on Wednesday morning after UBS raised its ratings for sector peers Croda International, Elementis and Victrex after meeting up with the firms over recent weeks.The broker said that it caught up with management and all agreed that while European trading remained challenging, softer comparatives are due to come in the second half. "This, combined with recent share-price moves, theoretically creates a more attractive entry point. Sector valuations however remain on 15.5x price-to-earnings (PE), unchanged from January," UBS said.