UK MARKET TALK ROUNDUP: BROKERS COMMENTS

26th Jul 2010 07:55

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] 0655 GMT [Dow Jones] Bank of America Merrill Lynch raises Capita Group (CPI.LN) to buy from neutral. "We expect Capita to win more big ticket contracts over the next 12 months which, coupled with less run-off, should drive an improvement in organic growth over 2011/12," says brokerage. Adds that Capita is a high quality name, with strong market positions, management and cash flow returns. Has a 820p price objective. Shares closed at 739p. ([email protected]) 0650 GMT [Dow Jones] William Hill's (WMH.LN) restructuring of its telephone betting operations is positive, but guidance will remain unchanged, says an analyst. Says the restructuring should eliminate some GBP4M of annualized cost so "this should be seen as positive management action." William Hill Online will establish a new telephone betting operation in Gibraltar, which will allow the group to close its directly owned telephone betting subsidiary in the U.K. The services will then be provided by William Hill Online and Vertex (an outsourced service provider). Shares closed at 174p. ([email protected]) 0649 GMT [Dow Jones] Aberdeen Asset Management's (ADN.LN) GBP300M net inflow in the fiscal third quarter is "a pleasant surprise," says corporate broker JPMorgan Cazenove, which had expected an outflow. Total assets under management came in below JPM's expectations, but the lower figure is countered by a modestly-higher revenue margin, and the effects of the market rally since the end of June mean little change to its estimates. Broker keeps an overweight rating. Shares closed Friday at 133p. ([email protected]) 0643 GMT [Dow Jones] Pearson's (PSON.LN) shares are expected to rise after upgrading its outlook for 2010 after strong 1H results, says a media analyst, noting there was some concern in the market that the group wouldn't be able to maintain its strong performance. While market conditions remain uncertain and growth is expected to slow in the 2H due to tough comparables, Pearson forecast adjusted earnings of approximately 70p a share for the year, up from 65.4p a year earlier. The guidance takes into account the earnings impact from the sale of its 61% stake in Interactive Data Corp. Pearson shares closed at 973p Friday. ([email protected]) 0641 GMT [Dow Jones] Tullow Oil's (TLW.LN) latest oil discovery offshore Ghana in the Owo field is "really exciting," and could add a billion barrels to the resource estimate for the area, says Panmure Gordon analyst Peter Hitchens. If Owo had not found oil, resources in the greater Tweneboa area would probably have been capped at 400 million barrels of oil equivalent, but the new find makes it more likely that the area contains around 1.4 billion boe, he says. Owo is also potentially more valuable to Tullow than the Jubilee field's estimated 1.5 billion boe because it has a larger stake of 49.95%, he adds. Has a buy rating, 1500p target price. Shares closed Friday at 1179p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 26, 2010 02:55 ET (06:55 GMT)