Broker tips: Man Group, Weir, WPP

1st Mar 2012 12:24

Credit Suisse has reiterated its outperform rating for hedge fund manager Man Group after the firm adjusted its dividend policy and announced a positive start to trading in the current calendar year.While the broker notes that the results were as expected, it highlights the revised dividend policy which will include 100% payout of adjusted management fee earnings and additional dividends/share buy-backs based on performance fee earnings and surplus capital. "We view the revised policy as sensible," Credit Suisse says.Meanwhile, Man said that assets under management (AuM) at the end of February stood at $59.5bn, ahead of the broker's $59bn forecast, attributable to positive investment performance offset by some further de-gearing and net outflows.With Credit Suisse leaving its full-year earnings forecasts virtually unchanged, the 175p price target is left where it is.Panmure Gordon has downgraded its rating for engineering firm Weir from buy to hold, saying that 'life is simpler elsewhere'."During its bear raid in January, we were relaxed that the aftermarket dynamics in the unconventional oil and gas market would save the day. Looking at its aftermarket input, however, suggests that this is a more difficult market to pin down, and it may take Weir more time and more investment to envelop it. The broker says that while the 2011 results beat expectations, the trends in margins, mix dynamics and the trajectory of its balance sheet were "less reassuring". The broker has cut its estimates by around 4% and has in turn reduced the target price from 2,550p to 2,350p.Nomura has maintained its positive stance on advertising and media giant WPP, saying that the group's 2011 earnings and 2012 guidance were better than expectations.The broker said it remains a buyer of WPP due to five main reasons: "a) the best emerging market exposure of the agency group; b) decent digital capability; c) a low valuation relative to peers, the market and history; d) earnings growth should continue to benefit from acquisitions; and e) excess cash not deployed for acquisitions is likely to be used for increasing the dividend payout ratio and share repurchase."A 990p price target and buy recommendation are maintained.BC