UK MARKET TALK ROUNDUP: BROKERS COMMENTS

9th Jul 2010 07:58

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] 0658 GMT [Dow Jones] Bovis Homes's (BVS.LN) 1H performance is solid but not dramatic, says KBC Peel Hunt. Says land spending is higher than the brokerage expected, which could lead to more rapid volume expansion across the next three years. "More aggressive land acquisition is the smart move - we believe it is right to buy land now even if prices are likely to slip back. It provides assurance and visibility into how margins can recover." Adds that the shares remain expensive. Keeps the stock at sell, with 365p price target. Shares closed Thursday at 349p. ([email protected]) 0655 GMT [Dow Jones] Interserve's (IRV.LN) 1H update confirms trading in line with expectations, says KBC Peel Hunt. Notes the order book has been maintained at around GBP6B, but says the tone of the statement is more cautious. Says cash flow performance should have been robust but expects favorable working capital movement to reverse in 2H. Brokerage maintains its Dec '10 pretax profit estimate of GBP68M and EPS estimate of 37.5p. Keeps the stock at hold, given that with the impending UK public sector pressures there are no immediate catalysts. Has 200p price target. Shares closed Thursday at 202p. ([email protected]) 0623 GMT [Dow Jones] HSBC initiates coverage of UK house builders. Expects 5% to 35% falls in the share prices of the five UK house builders with the biggest exposure to northern regions based on its construction team's forecast of a 5% regionally-weighted contraction in house prices in '10-'11. Sees the long-term recovery of house-builder stocks restrained by limited affordability and restricted mortgage availability. Starts Berkeley Group (BKG.LN) and Bovis Homes (BVS.LN) at neutral with 823p and 374p targets, respectively. Starts Barratt Developments (BDEV.LN), Persimmon (PSN.LN) and Redrow (RDW.LN) at underweight with 61p, 278p and 107p targets, respectively. Also starts Taylor Wimpey (TW.LN) and Bellway (BWY.LN) at underweight with 21p and 525p targets. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 09, 2010 02:58 ET (06:58 GMT)