Broker tips: Tullow, Greene King, Misys

9th Jun 2009 12:29

Oil stocks generally failed to sustain early gains in London on Tuesday despite the price of Brent crude edging up by almost a dollar a barrel, but Tullow Oil remains firm after an upbeat note on the company from Deutsche Bank.Tullow remains Deutsche's top pick among UK oil explorers and producers, following a spectacular run of success with its exploration prospects. Meanwhile, Tullow's next well, Ngassa-2, is 'undoubtedly the most binary it has drilled for some time,' the bank notes.The Ngassa-2 well 'tests deep potential below Lake Albert (Uganda), where reservoir development/hydrocarbon charge remain key risks. However, the upside is also material. Ngassa could double the discovered gross resource in Uganda, tripling Tullow's net exposure,' Deutsche Bank said.The bank has raised its price target for Tullow from 1010p to 1165p.Since raising £207.5m through a rights issue in late April brewer and pub chain owner Greene King has wasted little time in spending a large chunk of it to good effect, and this has not been reflected in the share price, reckons broker KBC Peel Hunt.The company announced today it has acquired 11 high quality managed pubs from Punch Taverns for £30.4m in a deal which broker Panmure Gordon estimates will boost earnings per share by around 1.5%, while KBC Peel Hunt puts the expected 2010 earnings improvement slightly lower at 1%.KBC Peel Hunt says there is no shortage of cheap pubs and expects Greene King to carry on buying, while it will also continue to buy back discounted bonds 'on an opportunistic basis.'KBC has a 'hold' rating for Greene King, but with a 470p target price it believes there is a buying opportunity with the shares currently languishing at around 420p.The recovery in financial markets should prove a boon to Misys, the supplier of IT solutions to the banking sector, according to Deutsche Bank.The German bank has lifted its rating on Misys from 'hold' to 'buy' and upped its price target for the stock from 135p to 200p, saying that, in contrast to the group's healthcare business, the banking services division is undervalued.