Broker tips: Serco, Asos, Genel Energy, Aveva

10th Nov 2014 12:45

Analysts showed their disappointment with a poorly-received statement from Serco on Monday, as the outsourcing company announced a profit warning, £1.5bn of write-downs, and a proposed a rights issue.Oriel Securities analysts said the update "provides some colour on the future shape of the group". However, "uncertainties remain aplenty in our view. There are still question marks over forecasts, capital structure and execution". Meanwhile, Investec said: "Today's update underlines the extent of the issues within this business at present."Even though the online apparel retail market has "substantial structural growth potential", Citigroup has cut its rating for Asos from 'buy' to 'neutral' following recent share-price strength.The bank has compared Asos with newly-listed rival Boohoo and German peer Zalando, saying that the three retailers have distinct business models. "Asos combines a very good own label offer with a broad third party offering. However, its sourcing does not match boohoo's and its IT and logistics do not match Zalando's. We think it can catch up but recent execution issues will take time to work through."UBS has upgraded its recommendation for Anglo-Turkish oil explorer Genel Energy from 'neutral' to 'buy', saying that "oil and money [are] both flowing" in the Kurdistan region of Iraq.The bank said that Genel is Kuridistan's leading resource holder with an estimated 1.6bn barrels (bbl) of oil equivalents and is "enviably positioned as export markets open".Plant and marine engineering firm Aveva beat Numis Securities' forecasts with its interim results, though the broker has scaled back its forecasts for the full year on the back of challenging end markets.Nevertheless, Numis kept a 'buy' rating, saying: "On a near-term view we think estimate momentum will stabilise even if end markets remain challenging, which should drive a re-rating in the shares partway back to historic multiples, albeit on lower forecasts."