Broker tips: Ryanair, miners, Halfords, Man

8th Jan 2010 13:10

Commerzbank has reiterated its hold stance of no-frills airline Ryanair with a target price of €3.50 after an update on the group's long-term strategy.The German broker says that following the cancellation of the large Boeing order at the end of last year Ryanair will concentrate on optimising yields and profits in fiscal year 2014 and 2015. As a result, capex will be significantly reduced and a one-time cash distribution will be on the agenda,it says.Credit Suisse (CS) keeps car parts and bike seller Halfords as 'outperform', but has increased its 2009/10 profit forecast, while the price target goes up to 460p from 440p.The broker expects pre-Christmas sales to come through much stronger than previously expected and has increased its 2009/10 pre-tax profit estimate by 7% to £112m ahead of the next trading update on 14 January.While the east Asian economic powerhouse is stepping up its investment in mining projects, UK miners are still setting the pace in copper and iron ore, according to RBS, which has upped target prices across the sector.China is investing heavily in coal, but will need to accelerate investments in 2010 to gain market influence in key commodities, the broker notes.RBS's top picks in the sector are Vedanta and Rio Tinto, whose price targets it has raised to 3,500p from 2,500p and to 4,000p from 3,300p respectively.Close behind are Xstrata and ENRC, whose price targets are raised to 1,450p and 1,200p and 1,100p from 850p respectively.It has 'buy' stances on all stocks, including ENRC on which it used to have a 'hold' stance.It keeps its 'buy' stance on BHP Billiton and lifts its target price to 2,300p from 2,000p.The target price of Antofagasta, on which it keeps its 'hold' recommendation, climbs to 1,050p from 900p. Morgan Stanley has cut hedge fund manager Man Group to 'equal weight' from 'overweight' and dropped its price target to £3.40 from £4.The broker, which also removed Man from its best ideas portfolio, said the downgrade reflects an 18% cut in its FY11e [estimatated full year 2011] EPS [earnings per share] on lower performance fees and reduced sales.It likes Man's exposure to a number of growth areas - distribution in Asia, capabilities in onshore to complement offshore structured products and benefit from UCITS III Opportunities - but pressures on sales and earnings are not fully reflected in market numbers.