Broker tips: Wolseley, Halfords, Lonmin

31st May 2013 11:24

Panmure Gordon recommends investors to take profits at heading and plumbing products group Wolseley ahead of its third-quarter results on June 4th.Analyst Andy Brown said: "As US housing data, on balance, continues to improve, investors seem happy [...]. We believe that the valuation is up with events and uncertainty surrounding its European operations is more likely to cause a negative surprise."Car and bike parts retailer Halfords was a strong riser on the FTSE 250 on Friday after UBS upgraded its rating for the stock by two notches from 'sell' to 'buy' and hiked its target price from 280p to 375p."Halfords is a brand with high market share in its core markets, good resonance with consumers, and finally is undertaking some of the investment required to succeed as a specialist retailer. The level of opex and capex investment required, in addition to the dividend cut, came as a surprise, but we consider that this will put Halfords on a path to sustainable earnings growth in the medium term."Morgan Stanley has raised its recommendation for platinum miner Lonmin from 'equal weight' to 'overweight', saying that the stock appears attractively valued versus peers."We consider Lonmin an attractive geared play on recovery, offering volume/unit cost improvement into a strengthening metal price. Whilst the macro remains the most important driver of the share price in the near term we contend that Lonmin can continue to close this valuation gap as it delivers ongoing volume/cost improvements in line with the trends identified above."