Broker tips: Pearson, Anglo American, Hammerson

30th Jul 2012 12:52

Publishing group Pearson was a heavy faller on Monday, extending its losses following its first-half results on Friday. Sentiment has been dampened today after Nomura reiterated its 'reduce' rating on the stock, saying that shares are 'richly priced'.The broker noted in a research report that group organic growth was just 0.6% in the first six months of the year, "unfeasibly low" given that the shares are trading at 14.4 times earnings.The broker has maintained its 1,200p target price on the stock.Credit Suisse has lowered its price target for diversified miner Anglo American from 2,500p to 2,200p after slashing its forecasts on the back of lower volumes within copper and iron ore.The broker said that Anglo is expected to lag peers on volume growth over the next two years (2-3% per annum in 2013/14); "we believe the market continues to underestimate the potential margin squeeze in 2013 and beyond." Earnings per share (EPS) estimates for 2012, 2013 and 2014 have been reduced by 7%, 3% and 13%, respectively. With the valuation being "far from compelling", the broker maintains its 'hold' rating on the stock.Investec has downgraded its rating for retail-focused real estate group Hammerson from 'hold' to 'sell' after the recent strong performance in the shares."Hammerson has been the best performing UK major this year. It has rebounded from being oversold in Q4 2011, with performance augmented by the sale of the office portfolio, occasional and spurious bid stories, and a focus on low gearing and income growth," the broker said in a research note.The broker says that the shares are now fully valued and ahead of its new target price of 415p, down fro 425p previously. BC