Broker tips: Transport stocks, Misys, easyJet

26th Jan 2012 11:29

Nomura has downgraded its rating on the 'European Industrial Transportation' sector from bullish to neutral, saying that it expects slow growth or even no growth from stocks this year.In its summary of the sector, Nomura said: "with the outlook for volume growth finely balanced between sub-trend growth and a double dip, and visibility as poor as we can remember it, we retain cautious forecasts at the start of 2012 and as a consequence focus our investment recommendations on the strongest companies in each subsector." Changes/reiterations that Nomura has made to the UK transportation stocks under its coverage are are as follows:IAG - Nomura keeps buy rating and 265p target; Firstgroup - Nomura downgrades from neutral to reduce, target cut from 333p to 330p; Go-Ahead- Nomura cuts target from 1,500p to 1,480p, neutral rating kept; Stagecoach - Nomura raises target from 281p to 305p, reiterates buy; EasyJet - Nomura reiterates buy rating and 470p target; DP World - Nomura slashes target from 1,040p to 880p, buy rating unchanged; Ryanair - Nomura downgrades from buy to neutral, target cut from €5.50 to €4.90.Panmure Gordon has reiterated its hold recommendation on financial software provider Misys, saying that the figures were shy of its (and consensus) expectations. "As we expected, Misys revenue is coming from selling 'bits and pieces' (i.e. moves/add/changes), which has driven up revenue in its Global Services division, but licence sales are down 6.5% year-on-year," said analyst George O'Connor."Takeover talks will keep the 'pep' in the share price and a good narrative on Bankfusion (8 new sales and 11 installs) should cheer investors but, following these results and associated downgrades, shares are coming down," he said. Panmure cuts its target from 335p to 295p.EasyJet's first quarter statement impressed the both the markets and Panmure Gordon today, with the broker maintaining its buy rating for the budget airline. Passengers carried in the three months to December 31st rose 8.1% to 12.9m, while the load factor improved 0.9 percentage points to 87.6%. Total revenues per seat increased by 9.2% while the cost per seat (excluding fuel) fell 1.6%."We believe this is a positive IMS, which demonstrates that EZJ's revenues per seat continue to grow strongly. We retain our buy recommendation and 450p target price," said analyst Gert Zonneveld.BC