Broker tips: M and S, Petropavlovsk, Thomas Cook

10th Apr 2012 11:09

Panmure Gordon has reiterated its hold rating and 390p target price for high street retailing giant Marks and Spencer ahead of its fourth quarter trading update next week.The broker forecasts 0.6% like-for-like sales growth for General Merchandise during the last three months of the fiscal year, compared with the consensus estimate of a 0.5% decline. In Food, Panmure is again above consensus (+1.5%) with a 2.3% growth forecast.Roche said that although the shares are trading at a discount to their historical average, the stock has risen 18.6% year-to-date, in line with the UK general retail index. "We see more upside elsewhere in the sub-sector, for example in Next or ASOS shares."Nomura has cut its target price for Petropavlovsk from 910p to 735p and maintained its neutral stance on the stock, saying that the gold miner still remains in a transition phase.The broker notes that Petropavlovsk's full-year results (2011) came in ahead of expectations. "However, this positive was short-lived as longer-term expectations for the group have been refocused on the increasing POX hub and IRC [65.6%-owned subsidiary] contributions to profitability and extremely high headline cash cost inflation levels for FY12," Nomura added.With 2012 and 2013 expected to still be transitory years for Petropavlovsk and IRC, Nomura says that stock is unlikely to outperform its peers.Investec has maintained its buy recommendation and 30p target price for travel firm Thomas Cook after the group confirmed that it is in discussions with its banks on extending the maturity of its loans out to 2015 and beyond."This is stated in the press to be at more painful terms (talks of banks taking 5% of equity) but, we think, this is a positive for Thomas Cook as fears over its near-term survival should go away, with the banks providing the support we had projected they would when we initiated with a buy," said analyst James Hollins. BC