UK MARKET TALK ROUNDUP: BROKERS COMMENTS

23rd Jun 2010 07:19

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] 0619 GMT [Dow Jones] The VAT increase announced by the UK Chancellor will benefit UK water and energy networks, says Deutsche Bank. Says the increase will be a benefit for the regulated networks since it will feed through to inflation via the retail price index. Says the government's revised RPI forecasts look extremely attractive and would imply asset base and earnings growth for the UK water and energy networks in excess of what is currently reflected in share prices or consensus estimates. Notes though RPI inflation benefits may be slightly offset by reductions in capital allowances for investment in plant and machinery. ([email protected]) 0612 GMT [Dow Jones] Citigroup lifts Whitbread (WTB.LN) price target to 1700p from 1645p following the company's 1Q update. Citigroup raises its '11 EPS forecast to 104.7p from 99.7p and its '12 EPS estimate to 114.9p from 109.5p to reflect the strong 1Q performance at Premier Inn. However "Whitbread's capital-heavy rollout model absorbs considerable free cash flow, which reduces our valuation upside. Combined with the more limited international exposure and lower operational gearing, this leads us to retain our hold rating." Shares closed Tuesday at 1531p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 23, 2010 02:19 ET (06:19 GMT)