Broker tips: Water companies, Carnival, Taylor Wimpey

19th Jun 2009 13:19

Cruise operator Carnival's second quarter trading update yesterday has been generally well received by the investment analyst community, with Evolution, Numis and Charles Stanley all making positive noises.Charles Stanley said the second quarter figures were ahead of prior guidance and market consensus, despite being affected by weak pricing. "Significantly, however, management suggested that pricing had probably troughed, with some signs of recovery in recent weeks," the broker noted.Charles Stanley has lowered its 2009 earnings per share forecast by 6.8% to $2.05, putting in the middle of the range of earnings forecasts. Though it reckons the storm is easing for Carnival, it retains its "hold" recommendation. Numis Securities was a little more optimistic, and has raised its price target for the stock from 1627p to 1748p.Ahead of the five-yearly pricing review by Ofwat, the water industry watchdog, Goldman Sachs has been running the rule over the water companies, with mixed results.The US bank has reduced its price target for Northumbrian Water to 237p from 262p, and has a "sell" recommendation on the stock. It also rates Pennon a "sell" but has upped its price target for the stock from 435p to 503p.It is neutral on Severn Trent and has raised its target price for the shares to 1451p from 1322p. United Utilities also gets its price target lifted, to 549p from 527p.The AGM statement from Taylor Woodrow on Friday morning gave a lift to the whole of the housebuilding sector, but Panmure Gordon is refusing to get carried away by the wave of optimism.Broker Panmure Gordon said the upbeat tone should not have been a surprise, however, given that the company has generally been more optimistic than its peers in its recent trading statements."That said, we still have concerns regarding the sustainability of recent momentum in the sector, and our recommendation therefore remains Hold for now," the broker said.