Broker tips: Utilities, Laird, Bookmakers

22nd Mar 2012 11:41

While Nomura has maintained a bearish view on the UK utilities sector, yesterday's Budget did include a cut in corporation tax leading the broker to upgrade its target prices for utilities under its coverage.Nomura made the following changes to its ratings/reiterations in the utilities sector today:Centrica: target raised from 350p to 355p, neutral rating keptDrax: target raised from 485p to 495p, reduce rating keptNational Grid: buy rating and 705p target price maintainedPennon Group: neutral rating and 755p target price maintainedSSE: target raised from 1,405p to 1,425p, reduce rating keptSevern Trent: target raised from 1,640p to 1,645p, neutral rating keptUnited Utilities: buy rating and 695p target price maintained.UBS has cut its recommendation for electrical components manufacturer Laird from buy to neutral following a recent strong run in the stock. Including today's 2.49% fall (from 209.1p to 203.9p), shares in Laird still stand 41.5% above where they were a year ago and some 21.37% higher over the last month alone. Having recently exceeded UBS's previous target price of 190p, the broker has been forced to downgrade its rating.However, UBS has raised its target price to 198p to factor in the sale of Laird's handset antennae business for £20m announced earlier this month. This is expected to complete in the second half of the year. Bookmaking peers William Hill and Ladbrokes were making gains on Thursday, rebounding after yesterday's fall on the back of gaming duties proposed by the government's Budget.As announced in last year's Budget, the government will introduce a Machine Games Duty (MGD) from February 1st 2013 onwards. The standard rate of MGD will be 20% and the lower rate will be 5% of net takings. Investec was expecting a 17% standard rate of MGD and has subsequently cut its target prices for both stocks.William Hill is still rated a buy but with a target price of 285p, down from 300p previously, while Ladbrokes's target has been cut to 145p, from 154p, and its hold recommendation has been maintained.BC