Broker tips: Tullow Oil, Hays, G4S

1st Jul 2013 13:14

Analysts at Nomura have upped their view on shares of oil exploration group Tullow Oil ahead of what they expect will be a positive trading update from the company this next Wednesday. That is particularly true, they believe, given the generally sombre outlooks typical for large-cap majors in Europe and after a 40% fall in the share price (in US dollar terms) since last February. Then there are the upcoming 'trigger well' results expected in the next few months. In that regard the broker writes that "a six pronged campaign testing multiple geological plays suggests Tullow's business remains extremely active and competitive."Nomura has raised its view on the shares of Tullow Oil to neutral from reduce, albeit while reducing its price target to 1,250p from 1,400p previously.While recruitment outfit Hays is expected to continue to meet challenging conditions in Australia its current share price is currently discounting almost no value in its UK segment. Not only that, the highly operationally geared UK business is expected to recover, driven by both cost reduction and a return to gross profit growth. As well, the Australia business has proved adept at rapidly cutting costs historically and already began that process at the end of calendar 2012.For all of the above reasons analysts at Credit Suisse have decided to raise their view on the company's shares to outperform from neutral, alongside a price target of 99p.Canaccord Genuity analysts argue that the market is underestimating the potential for G4S's new Chief Executive to turn the company around.Julian Cater and Graham Brown say investors have priced in a "kitchen sinking" of G4S's accounts and a fundraising when Ashley Almanza updates them at the security outsourcer's interims on August 28th. Though both are possible, the analysts reckon the market has not paid enough attention to Almanza's scope to reallocate capital, report more clearly, generate cash and do more business in fast-growing markets.Due to the above the broker has seen fit to reiterate its buy rating and 300p price target on the shares.AB