UK MARKET TALK ROUNDUP: BROKERS COMMENTS

30th Jul 2010 09:19

Broker comments in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 0819 GMT [Dow Jones] A delay to development of BTG's (BGC.LN) experimental sepsis treatment CytoFab has only a marginal impact on BTG's valuation, says Ambrian analyst Chris Redhead. AstraZeneca (AZN.LN), which is developing CytoFab, said Thursday it expects to file the product for approval in 2015. It previously said it would file it in 2014. Redhead adds CytoFab is already perceived as a high risk program. Keeps buy recommendation, although notes some investors may take profits given that the stock has appreciated by around 20% since March. Sees fair value for BTG at 268p. Shares +0.1% at 215p ([email protected]) 0740 GMT [Dow Jones] United Business Media's (UBM.LN) 1H results are slightly ahead of KBC Peel's forecasts says the brokerage, but with a cautiously optimistic outlook. KBCPH adds that Print continues to dilute overall performance, but Events continues to drive the group. Still, the brokerage keeps a buy rating, saying on a FY2011 recovery basis, the stock looks inexpensive. Shares -3.8% at 557.5p. ([email protected]) 0738 GMT [Dow Jones] Investec (INVP.LN) should be attractive to both growth and value investors, says Numis Securities, after what Investec called a "satisfactory" first fiscal quarter. Numis keeps a buy rating and 606p price target, saying the group's earnings have been "substantially more resilient than all the major U.K. focused banks through the credit crunch," and that its post-tax return on equity should reach 20% next year. Shares -0.6% at 504p, in a lower London market. ([email protected]) 0709 GMT [Dow Jones] Rentokil Initial's (RTO.LN) 1H results are ahead of expectations, says Seymour Pierce. Says good progress has been made on cost savings with Rentokil achieving GBP40M of savings in the period, on track to meet its FY10 GBP75M target. Adds that customer retention is reported to be improving across the group. "While the costs performance has been strong against a weak comparative, these results confirm that there is still a long way to go before a recovery can be announced," it says. "The main problem is how to get revenue growth without impairing service levels," adds brokerage. Has a sell rating and 100p target price. Shares -2.7% at 104p. ([email protected]) 0659 GMT [Dow Jones] Shore Capital upgrades PartyGaming (PRTY.LN) to hold from sell following the announcement of its plan to merge with Bwin (BWIN.VI). This deal is highly attractive and could provide significant future earnings accretion, says Shore. However, there remains some transaction risk and the shares may drift post this announcement until completion, thus the hold rating rather than a buy, says Shore. Still, the merger is transformation not only for PartyGaming, but the industry as a whole, says Shore. Shares closed Thursday at 309.5p. ([email protected]) 0644 GMT [Dow Jones] UBS downgrades Bovis Homes Group (BVS.LN) to neutral from buy in a review of UK housebuilders's stocks. Despite consistent improvement in all key housebuilding company metrics in 2010, the sector has underperformed by 16% year-to-date, giving back all the outperformance in 2009. "We do not think that this primarily reflects risks to house prices or the impact of government austerity measures, but [it reflects] the stalling of mortgage approvals at circa 50,000 per month and the consequent risk over the timing/quantum of normalized returns," adds UBS. Bovis shares closed Thursday at 348p. ([email protected]) 0629 GMT [Dow Jones] TalkTalk's (TALK.LN) 1Q results "look fine" and broadly in line with expectations, says Evolution Securities analyst Steve Malcolm. 1Q revenue of GBP444M is GBP1 million above consensus, while broadband average revenue per user is 4p below consensus, he notes. "If there is any criticism at all, or any niggles, it is just that the mix between the B2B and the consumer business is probably a little bit more skewed towards B2B," he adds. The group has said it is on track to deliver its fiscal 2011 guidance, Malcolm says. The deal with Vodafone (VOD.LN) was "widely expected", Malcolm retains. He retains a buy rating on TalkTalk and 161p target price. Stock closed at 123p Thursday. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 30, 2010 04:19 ET (08:19 GMT)