Broker tips: SSE, Henderson, bwin.party

8th Apr 2011 12:16

Credit Suisse upgrades energy supplier Scottish & Southern Energy (SSE) from 'neutral' to 'outperform', saying that while last year's results will see many adverse earnings impacts, earnings growth could be strong from here on.The broker says that volumes in the full year ended March look likely to be at the lowest levels since 2004, thus leaving scope for further upside in future years.The target price is hiked up to 1,400p, from 1,225p.Peel Hunt ups its forecasts for fund manager Henderson Group after the completion of the Gartmore acquisition.The deal, first announced on 12 January, was completed on 4 April and is intended to "strengthen Henderson's position in retail products, provide further product diversification in both long-only and alternative products, and deliver significantly enhanced operating margins," said analyst Stuart Duncan.However, "Our asset retention and operating margin assumptions strike a reasonable balance between upside and downside risks, leaving a 'hold' recommendation looking a fair reflection of events," said Duncan.The target price is raised from 145p to 165p.Gaming firm bwin.party has seen its share price tumble 29% over the last two days following German regulation, and UBS cuts its rating from 'neutral' to 'sell' predicting further weakness in the shares. The broker estimates that bwin.party derived €175m of revenues from Germany in 2010, but new rules have proposed to licence betting from 2012, taxing turnover by 17%.Credit Suisse says that if the company is forced to cease trading in Germany - which looks unlikely - earnings downgrades could be over 50%.The target price is slashed by 46% from 185p to 100p.