Broker tips: Euromoney, Intec, Rockhopper

24th Sep 2010 13:53

Broker KBC Peel Hunt expects to up its 675p target price for Euromoney Institutional Investor after the business publisher and events promoter once again topped market expectations with its results. "Both revenue and profits look to have exceeded expectations by c.£4m. Net debt at the year end is modestly better than expectation at under £140m," KBC Peel Hunt analyst Malcolm Morgan said. The company lifted profits guidance, as a result of which Peel Hunt thinks 2010 forecasts will move to the £84-855m level giving earnings per share of around 52.2p. The broker expects first quarter fiscal 2011 growth to continue at the rates seen in the second half of the current year, but notes that thereafter the comparative figures become harder to top. "We expect that 2011 PBT [profit before tax] forecasts will rise to c.£92-94m range suggesting 55.5- 57p of earnings," the broker said. Investors perturbed by Rockhopper Exploration's problems with its flow test on the Sea Lion 1 well in the North Falkland basin should rest easy, Westhouse Securities said, as there was nothing in the rest results which cannot be mitigated by engineering solutions, albeit at additional cost.The good news is that testing improved the commerciality of the Sea Lion Discovery, accrodign to Westhouse. In the company's view, had all four of the intervals tested contributed to the test flow, instead of just two because of problems with perforations, the well could have flowed at about 4,000 barrels per day.The broker has reiterated its "buy" recommendation on the stock. Westhouse has a target price of 649p for Rockhopper. Though it had a target price of 64p, broker Singer Capital Markets said the 72p per share cash offer by CSG Systems for Intec Telecom was right at the bottom end of its 72p - 84p take out price range published last month, and the broker has not ruled out the prospect of other large US players getting involved."Whilst we believe some investors would be disappointed at the take out level given the stock hit a 12m high of 121p, confidence has undoubtedly been shaken given the extended sales cycles the company has experienced since the beginning of the calendar year. There are other big US players operating in the space (Oracle, Amdocs, Comverse) so a counter bid cannot be completely ruled out (note: break fee is £2.3m), though it has been in the public domain that the company was in talks," Singer analyst Tintin Stormont said.