UK MARKET TALK ROUNDUP: BROKERS COMMENTS -3-

19th Jul 2010 13:30

0715 GMT [Dow Jones] Nomura raises its Burberry Group (BRBY.LN) target price to 826p from 818p and maintains a neutral rating following the company's announcement it will buy out its Chinese franchisees' and take control of its operations in that market. The company expects the deal to be broadly earnings-neutral in FY11 and to add GBP20M incremental operating profit in FY12, notes Nomura. It raises FY12 and FY13 EPS earnings estimates by 6-7% to reflect the deal. "We are very encouraged by the deal as we believe it demonstrates that Burberry continues to focus on increasing control of operations and enhancing the brand image," adds Nomura. Shares -0.4% at 796p. ([email protected]) 0711 GMT [Dow Jones] Debenhams' (DEB.LN) renegotiation of its banking facility is good news as it will bring down the company's interest charge significantly next year, with the average interest cost on debt to fall to 4.5% from about 7%, says Arden Partners. Arden says this should lead to a bounce in the stock and so maintains an add recommendation. It notes highly-geared Pendragon (PGG.LN), rated at buy, will be hoping to do the same as Debenhams next spring and will renegotiate with its banks over its debt facility to cut punitive interest charges. Debenhams shares -0.4% at 58p.([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 19, 2010 08:30 ET (12:30 GMT)