Broker tips: Fresnillo, BHP Billiton, Amlin

3rd Aug 2011 12:56

Citi has kept its hold rating on gold and silver mining giant Fresnillo, highlighting a "small miss" in its half-year figures.The company reported $422m of attributable net profit in the first half of 2011 (excluding Silverstream), under the US broker's expectations of $467m. Earnings per share of 58.8 cents was short of estimates of 65.2 cents."While this is a small miss on our numbers, the change from a year ago, compliments of precious metals prices and volume growth, is exceptionally good," said analyst Jon Bergtheil.The target price stays at 1,500p.Analysts at Credit Suisse have today downgraded their recommendation on shares of BHP Billiton to "neutral", from "outperform", while at the same time cutting their price target on the company's shares to 3,160p, from 3,300p. The main reason for this lies in the $15.1bn takeover bid made for rival Petrohawk, which they anticipate will go through. As such, Credit Suisse no longer expects a $9.5bn share buy-back programme to be undertaken in 2012. Credit Suisse, however, adds that, "while the prospect of capital management is diminished we could see BHP try to appease investors with a higher full year (sustainable) dividend and/or a very modest capital management announcement."Following Amlin's announcement on Tuesday that it is unlikely to meet its profit targets for the full year, UBS has downgraded the underwriter from buy to neutral.Due to the cut to profit guidance, the broker has reduced its full-year earnings per share forecast for 2011 by 129% to -2.4p, and by 11% for 2012 and 2013. "We turn more cautious on [Amlin] and increase the loss ratio accordingly," said analysts Brendan McMaster and Kathy Fear.The target price is slashed from 487p to 345p.BC/AB