Broker tips: ITV, Rexam, Kazakhmys

17th Jul 2014 12:19

Even though Liberty Global has signalled that it has no intention to bid for ITV following the acquisition of a 6.4% stake in the broadcaster, Investec has said that takeover speculation is "now likely to be a key part of the investment case" for the UK group.Liberty Global's Chief Executive Mike Frie said that the purchase of ITV shares from BSkyB was "an opportunistic and attractive investment" and will not be followed by an offer to acquire the whole of the company. However, Investec said: "The key question is whether this implies a 100% Liberty Media acquisition of ITV in time - is it happy at just 6.4%.Given recent Liberty Global M&A appetite, we see speculation of further M&A as almost inevitable mid-term implying ITV shares are likely to be valued more on a take-over basis."Valuation concerns and rising aluminium prices have prompted Deutsche Bank to cut its rating for canmaker Rexam from 'buy' to 'hold'.The bank has lifted its target price from 550p to 570p as the relative valuation for the wider sector has increased, but it still sees "limited upside to the stock at current levels".The recent strong share-price performance of mining group Kazakhmys means that the risk/reward balance has "moved against investors", according to Canaccord Genuity which has downgraded the stock from 'hold' to 'sell'.After making "marked reductions" to its iron ore forecasts, Canaccord now sees 17% potential downside to its target price of 265p for Kazakhmys.BC