Broker tips: easyJet, Babcock, Melrose, Taylor Wimpey

13th May 2014 12:35

Shares in easyJet were flying firmly lower on Tuesday morning after the airline underwhelmed with a seemingly in-line first-half report.Panmure Gordon maintained a 'hold' rating and 1,800p target price for the stock. "Whilst we remain hugely optimistic about the long-term prospects of this business, in the near term we expect the shares to pause for breath," said Analyst Gert Zonneveld.Credit Suisse has initiated coverage of Babcock International with an 'outperform' rating, labelling the company as a "one-of-a-kind engineering and technical services provider".The stock is trading a 17.6 times estimated earnings for this year, falling to a multiple of 15.6 on next year's forecasts, which "does not look demanding in terms of the high visibility of [earnings] growth and upside potential from big ticket wins", Credit Suisse said.Killik & Co has highlighted a buying opportunity for investors at Melrose after a "reassuring update" from the industrial conglomerate on Tuesday."We remain positive on the company, which plays well to the themes of smart technology and energy security, and offers exposure to an attractive 'buy, improve and sell' strategy. Following a period of share price weakness since the full-year results in March, we believe the current level is an attractive point to buy the shares."Jefferies reiterated its 'buy' recommendation on Taylor Wimpey as the housebuilder set out ambitious medium-term targets and confirmed a generous new cash return policy."Some critics thought that the focus on internal change missed the point and likened TW to a goldfish unaware of the challenges outside of the bowl," said the broker. "In our view, today's strategy update suggests that back in 2011 TW was demonstrating the intelligence and dexterity of a dolphin rather than a goldfish. Maybe it was the analysts who were the goldfish, unable to join the dots themselves, waiting to be spoon fed guidance from management and IR."