Broker tips: ITV, Capita, Cobham

13th Nov 2012 09:54

In spite of a 'positive' third-quarter trading update from terrestrial broadcaster ITV, Investec has retained its 'sell' rating and 75p target price for the stock.Excluding viewing share figures, the broker says that the third-quarter statement is positive with costs and ITV Studio profit coming in better than expected. Nevertheless, the broker maintained its negative view on the shares today, highlighting key risks, which are: "poor long-term TV ad market dynamics; ad market uncertainty; and acquisition execution risk".An 'in-line' trading statement from outsourcing giant Capita wasn't enough to change Panmure Gordon's 'sell' rating on the stock, which continues to believe that the stock's premium valuation over its peers is unjustified."Capita currently trades at a 4-9% [price-to-earnings ratio] premium to its outsourcing peers on 2012E and 2013E estimates [...] which we continue to believe is too rich," the broker said.Credit Suisse has pared its forecasts for defence technology group Cobham and reiterated its 'underperform' rating for the stock, following the gloomy 2013 guidance on Monday.The broker has cut its 2013 and 2014 earnings per share (EPS) forecasts by 6% and 4%, respectively, and subsequently reduced its price target for the stock from 195p to 170p.The broker said it remains cautious for three key reasons: near-term visibility is worsening; there are uncertainties about organic growth returning in 2014; and valuation.BC