Broker tips: Tullow, Diageo, Imagination Technologies

12th Dec 2012 12:35

Credit Suisse has downgraded its rating for oil giant Tullow from 'outperform' to 'neutral', saying that it may take some time for investor confidence to return."While we admire TLW's ability to access acreage and its attractive exploration portfolio, where we see several 'big' opportunities to possibly come to fruition next year (e.g. Mauritania, offshore Mozambique, Norway), it is unlikely until late 1Q13/early 2Q13 (with the Sabisa well) at the earliest that sentiment will turn, in our view."Nomura has cut its target price for drinks group Diageo following the cancelled talks with tequila maker Jose Cuervo, but has retained its 'buy' recommendation, saying that the deal was dropped for the right reasons.Nomura said that although market expectations for the Cuervo deal were high, Diageo has shown "capital discipline in not over-paying or agreeing to uncommercial demands" from owners, the Beckmann family.Investec has reiterated its 'hold' recommendation and 498p target price for chip specialist Imagination Technologies, saying that while the first-half revenue performance was strong, profits were weak.Investec said that revenues were strong, coming in at £71.4m, ahead of its £66.3m estimate. However, profits were less impressive, with an in-line Technology performance offset by a "disappointing" showing in the Pure business. Adjusted operating profit came in at £16.7m below the £18.3m forecast.BC