UK MARKET TALK ROUNDUP: BROKERS COMMENTS -2-

21st Jul 2010 07:50

0639 GMT [Dow Jones] Hochschild (HOC.LN) second quarter attributable production was slightly ahead of expectations due to outperformance in gold, says Damien Hackett of Canaccord. Hochschild reported 6.8 million troy ounces of attributable silver equivalent production compared to Canaccord's expectations of 6.6 million ounces. Hochschild produced 4.5 million ounces of silver and 37,570 ounces of gold. Canaccord expected 4.5 million ounces of silver and 35,000 ounces of gold. Hackett said the company has a strong track record of delivering on its production targets. The FTSE 250 miner plans to achieve its 2010 target of 26.3 million attributable silver equivalent ounces from current operations. Canaccord has a 405p target price and buy rating on the stock. Hochschild closed Tuesday -0.2% at 293p. ([email protected]) 0637 GMT [Dow Jones] Goldman Sachs upgrades Mondi (MNDI.LN) to buy from neutral, citing divergent trends in paper and packaging. Demand for newsprint and magazine papers has been in structural decline for at least a decade, but packaging grades offer some structural growth potential. GS forecasts steady price progression. Still, it cuts the price target to 564p from 713p. Shares closed Tuesday at 398p. ([email protected]) 0637 GMT [Dow Jones] The acquisition of SSL International (SSL.LN) by Reckitt Benckiser (RB.LN) is likely to be highly earnings accretive for Reckitt, says an analyst. Thinks synergies could be in the region of 10%-15% of SSL sales. But questions why Reckitt has waited so long to make a move, as SSL shares have doubled in the past 12 months alone. Regardless, does not anticipate another buyer entering the field and expects Reckitt's shares to rise sharply, Wednesday. Reckitt closed on Tuesday at 3190p. ([email protected]) 0625 GMT [Dow Jones] JPMorgan Cazenove downgrades Cable & Wireless Worldwide (CW.LN) to underweight from neutral following its profit warning, due to a slowdown in UK public spending. Thinks it will take some time to rebuild confidence in the investment case following the news. As a result of the slowdown, says the management increases cost reduction initiatives and now expects total operation expenditure to reduce year-on-year. Says C&W Worldwide management therefore expects slower growth in Ebitda, around the lower end of the range of expectations. Analysts' forecasts ranged between GBP452M and GBP484M before the announcement. Shares closed Tuesday at 69p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 21, 2010 02:50 ET (06:50 GMT)