UK MARKET TALK ROUNDUP: BROKERS COMMENTS

1st Jul 2010 07:50

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] 0650 GMT [Dow Jones] Tate & Lyle's (TATE.LN) disposal of its sugar refining operations in the European Union to American Sugar Refining Inc for GBP211M in cash is a "sweet deal", says an analyst. Says this deal will help to reduce the company's debt, which stood at GBP814M at March 31. Analyst adds the company is looking to exit from the sugar market altogether, noting it is taking steps to sell its molasses and Vietnamese sugar businesses, its remaining sugars operations. The exit suggests the company is focusing on its specialty food ingredients business. Shares closed at 450p. ([email protected]) 0642 GMT [Dow Jones] Greene King's (GNK.LN) preliminary FY results are promising, with pretax profit in line with consensus expectations, says a trader. Says the company has had an encouraging start to the year, despite the cautious UK consumer. Says the pub group is well positioned to emerge from a weaker recessionary background and take advantage of future growth opportunities. Says it is looking strong versus peers. Expects the stock to start up by 5p. Shares closed Wednesday at 392p. ([email protected]) 0638 GMT [Dow Jones] Debenhams' (DEB.LN) interim results are slightly disappointing, says a trader. Says the statement is cautious, and notes the company remains wary over the strength of the retail market and consumer confidence levels. However, thinks the chief executive's comments with regards to the refinancing will be well received. Says the refinancing is progressing well, and Debenham's expects this to be completed within the next few weeks, well ahead of schedule. Trader expects the stock to open up by 1p. Shares closed on Wednesday at 53p. ([email protected]) 0637 GMT [Dow Jones] Credit Suisse cuts Eurasian Natural Resources (ENRC.LN) target to 1250p from 1400p. Brokerage remains concerned over near-term momentum and reduces 2010 and 2011 earnings forecast by 18% and 8% respectively. Says this is to reflect lower ferrochrome prices in 2H '10 and greater customer discounting than previously expected. Has a neutral rating. Brokerage continues to like the longer term investment case of the stock. "A strong balance sheet and expandable assets provide the growth potential that could reach 10% per annum," it adds. Shares closed at 861p Wednesday. ([email protected]) 0627 GMT [Dow Jones] Credit Suisse initiates Vedanta Resources (VED.LN) with an outperform rating, and 3400p target price. Says with slowing commodity price momentum, now is the time to look for stocks with internal catalysts to drive performance. "Vedanta is a high-growth stock and, although a number of uncertainties exist, we believe little of the potential medium-term upside is priced in," it says. Adds following a period of underperformance, the stock currently presents an attractive entry point. Says the stock is its top pick among UK mid-caps. "Vedanta has one of the best growth profiles among the UK miners over the next three years," adds Credit Suisse. Shares closed at 2125p.([email protected]) 0621 GMT [Dow Jones] Citigroup lowers HMV Group (HMV.LN) target to 80p from 110p "to reflect the weak outlook given in preliminary results and industry de-rating." Says 4Q revenue trends in HMV suffered from a number of headwinds, most notably a tough +18.4% two-year 4Q like-for-like comparative, which falls to +2% over the peak trading period in the new financial year. However, "we think this and the combination of further modest HMV market share gain progress, the ongoing HMV product mix shift, and margin recovery at Waterstone's should allow HMV to retain a stable group EBIT platform," it adds. Has a buy rating. Shares closed at 63p Wednesday. ([email protected]) 0613 GMT [Dow Jones] UBS initiates Petropavlovsk (POG.LN) at buy with 1600p target, implying about 35% upside to the current share price. Expects the company to maintain its low-cost position relative to the sector and also to more than double output by 2014. Estimates that the company's current mines and upcoming projects have an average life span of 10-15 years but thinks additional long-term production potential is possible. Shares closed Wednesday at 1190p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 01, 2010 02:50 ET (06:50 GMT)