UK MARKET TALK ROUNDUP: BROKERS COMMENTS -3-

22nd Jun 2010 08:44

0648 GMT [Dow Jones] Barclays Capital initiates coverage of Centrica (CNA.LN) at underweight, with 295p price target. Says Centrica has outperformed the utilities sector by around 25% over the last 12 months. Says the outperformance has been due to an improving outlook for the company's downstream business and a large increase in wholesale traded gas prices. However, BarCap notes UK and European spot gas prices are subject to a cap, which is now being approached, and Centrica's outperformance may stall as a result. Shares closed Monday at 303p. ([email protected]) 0648 GMT [Dow Jones] Whitbread's (WTB.LN) interim management statement is very strong with group like-for-like sales up 7.6% in the 13 weeks to June 3, says an analyst. The statement is 'exceptional' and risks lie to the upside. The analyst says management is going to remain vigilant on cost control and is planing to be broadly cash flow neutral this year. The analyst thinks it may be too early for changes to consensus forecasts and certainly does not expect any changes ahead of the UK budget, expected at 1130 GMT. However, the statement is extremely good, the analyst says. Seperately, a trader notes that the stock is trading at a discount to hotel peers. Shares closed Monday at 1478p. ([email protected]) 0630 GMT [Dow Jones] Bunzl's (BNZL) trading statement is in line with expectations, says an analyst. Notes in particularly the company's success in winning business in the US is good news. Also sees better margins in the UK and Ireland, although revenue in the first half is below the same period last year in these regions due to economic conditions. Says the company is flagging up further acquisitions being finalized during the remainder of the year, which is always good news for Bunzl. Shares closed on Monday at 746.5p. ([email protected]) 0602 GMT [Dow Jones] JPMorgan Cazenove downgrades EasyJet (EZJ.LN) and Ryanair (RYA.DB) to neutral from overweight as it takes a look at the airline sector. EasyJet's share price performance is being overshadowed by Stelios's disagreements with the board over strategy, says GS. Until these issues are resolved permanently, the share performance is likely to remain muted. Where Ryanair is concerned, the brokerage says it remains one of its favorite picks for the medium term. However, in the short term, relative share price performance risks are being eclipsed by a recovery in the flag carriers. EasyJet shares closed Monday at 426p, Ryanair at EUR3.67.([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 22, 2010 03:44 ET (07:44 GMT)