Broker tips: Petrofac, Ocado, Stagecoach

26th Jun 2012 11:33

Investec has downgraded its rating for oilfield services group Petrofac from 'buy' to 'hold' and cut its target price from 1,900p to 1,500p, saying that caution over 2013 still remains as the backlog continues to decline."We still believe in the medium-term investment case for Petrofac and have little doubt that it can meet its medium-term objective of doubling recurring 2010 group earnings by 2015, but the shares are unlikely to perform in a drifting oil price environment (even though this has little tangible impact on PFC's business) and whilst the ECOM contract wins are failing to replace the existing backlog, increasing uncertainty for 2013 forecasts."Jefferies says that Ocado's first half was as expected and has maintained its 'hold' rating and 80p target price on the online grocery stock."With capacity constraints now fully solved, we are looking for confirmation that the group can accelerate sales growth strongly," the research report said."Events in London over the summer, however, could be having an impact on the group's ability to execute and may result in a hit to performance near term," Jefferies said.Nomura has reiterated its 'buy' recommendation and 305p target price for transport group Stagecoach after its full-year figures came in four per cent higher than forecasts."Despite concerns around the UK bus business in the wake of the First Group profit warning, trading has been robust, with FY2012 ahead of our forecasts," the broker said in a research note on Tuesday morning. All major divisions except West Coast beat its forecasts.Nomura says that risk reward is "favourable" with the shares trading at just nine times 2013 forecasts.BC