Broker tips: Weir, Home Retail, Kingfisher

4th Aug 2009 12:21

Weir Group's prediction that it will achieve profits at the upper end of its previous guidance has cheered KBC Peel Hunt and the broker lifts its price target on the engineer to 690p from 550p.Weir's cheery outlook came as it posted a 12% rise in both pre-tax profits and revenues, helped by a strong performance from its power and industrial and minerals division, which offset weakness in its oil and gas arm.While noting that Weir has seen a decline in order output, KBC Peel, which has a 'buy' rating on the stock, sees this turning round soon, and consequently lifts its target price on the stock.Broker Nomura has taken another look at Argos and Homebase owner Home Retail Group after shares in the firm rallied in line with a brighter economic outlook. Nomura raises its price target on the stock to 330p from 288p, but given the rally in the share price, also downgrade's Home Retail to a 'neutral' rating. It notes that Home Retail is still trading at a price/earnings ratio of 16x. "Home Retail Group is executing strongly, offers a secure 4.7% dividend yield and a robust balance sheet; however, we see greater opportunity including self help measures across the sector," Nomura says. Elsewhere in retail, Kingfisher is being returned to health and could offer more surprises over the next year, according to Singer Capital Markets in its latest review of the B&Q owner.The broker raises its price target on the stock to 235p from 215p and keeps its 'buy' rating.Singer is particularly impressed with the UK division but also sees potential upside from China and notes that things are looking better in Poland, about which it had previously been cautious.