Broker tips: Michael Page, Amec, Wood Group...

5th Mar 2010 12:50

Michael Page fell back Friday following a mixed response to an 85% slump in profits at the recruiter last year. KBC Peel Hunt says adjusted profit before tax of £21.1m, down from £140m in 2008, was slightly ahead of expectations. "The balance sheet remains robust and the company maintains an excellent position for international growth into the next cycle," said the broker, which maintained 'buy' advice and 480p target price. But analysts at Ambrian worry that the strength of the recovery is uncertain despite half of full-year profits being earned in the final quarter. "The trading outlook is still difficult and the strong rally in the share price leaves the shares vulnerable to profit taking, particularly for those investors that take a view that the economic recovery is weak," it says. "On valuation grounds we reiterate our take profits recommendation."Nomura has cut its target price on engineer Amec but still prefers the stock over fellow engineering-focused company Wood Group. The broker notes that Amec's full year report disappointed the market and has cut its target price on the stock to 915p from 950p. 'On our numbers, there is little to distinguish the two stocks from a valuation perspective today,' Nomura says. It continues: 'Both companies have painted a similar picture of the broad outlook for 2010: the pricing environment remains tough and contracting activity is expected to show signs of improvement in the second half of 2010.' Nomura retains its 410p target price on Wood Group.Last year was a difficult one for the shipping sector, hit by the recession, low freight rates and overcapacity, but Charles Stanley sees more optimism in 2010. Volatility looks set to continue, it says, with Chinese demand and infrastructure spending likely to determine the outcome for the dry bulk sector. But the impact of the cold winter and declining oil stocks has stimulated the tankers market, while better conditions are anticipated for the containers business. Charles Stanley has an 'add' rating on Braemar Shipping with 530p target price, the same rating and 954p target for Clarkson, while Goldenport is a 'buy' with 141p target. UK-listed Braemar Shipping enters its close period ahead of full-year results in May and Clarkson is due to announce final results on 11 March, which "should herald further outperformance"