Broker tips: Reed Elsevier, Kingfisher, Ladbrokes

16th Feb 2012 10:54

Nomura has reiterated its buy recommendation and 668p target for business information solutions provider Reed Elsevier, saying that the group's full-year results were "reassuring".The firm said that underlying sales growth was 2% in 2011, 3% excluding biennial cycling, compared with Nomura's 1.1% forecast."The main differences were in Risk where growth was 4% vs. our 2.9% forecast and Exhibitions where growth was flat versus our -2% forecast," the broker said."For 2012, the company expects continued growth in organic revenue. Consensus is around 2-2.5% and our current 1.3% estimate looks a touch conservative."Panmure Gordon has maintained its buy rating and 350p target price for DIY retailer Kingfisher saying that the current valuation looks too low following the group's full-year results.The broker says that Kingfisher is making "good underlying progress" but has had to reduce next year forecasts slightly to take into account adverse currency movements. "We continue to believe that Kingfisher has a significant growth opportunity. We believe that it could (over the long term) double its business in Poland and Spain, treble in Turkey and quadruple in Russia. Also, China is close to profitability," said analyst Philip Dorgan.While Peel Hunt still prefers bookie William Hill over rival Ladbrokes, Peel Hunt has kept its buy rating and 168p target price (TP) for the latter after the group's full-year results came in ahead of expectations."This was a solid performance, given the lack of the World Cup, £8.1m VAT boost in 2010 and the investment in eGaming," said analyst Nick Batram."It is fair to say that the jury is still out on management's ability to narrow the gap online with its closest peers. However, we consider that this is largely in the price and therefore there is room for positive upside surprise," Batram said.BC