UK MARKET TALK ROUNDUP: BROKERS COMMENTS

24th Jun 2010 13:39

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] 1239 GMT [Dow Jones] Nomura raises Diageo (DGE.LN) price target to 1530p from 1500p as it takes a look at the beverages sector. Brokerage continues to be optimistic about a return to medium-term growth rates for the spirits industry EBIT from FY'11 and says this means around 7% per annum for Diageo. Has a neutral stance on the beverages sector and says the relative valuation looks good value compared with other consumer sectors. Keeps Diageo at buy. Shares -0.4% at 1084p. ([email protected]) 1204 GMT [Dow Jones] DSG International's (DSGI.LN) preliminary results are slightly ahead of the pre-guided range and about 3% ahead of Credit Suisse's expectations, the brokerage says. Notes clean pretax profit of GBP109M, against Credit Suisse's estimate of GBP106M. "Overall this is a solid set of results and there are growing signs of stabilization in the group's international markets." Adds the company's transformation plan is starting to gain traction in terms of both sales and margin performance. Has the stock at outperform, with 50p price target. Shares -1.5% at 27p. ([email protected]) 1056 GMT [Dow Jones] Eaga's (EAGA.LN) trading update is positive and broadly in line with expectations, says Panmure Gordon. The change in chief financial officer is good news, says Panmure. It expects the government to continue to support environmental issues, which should benefit Eaga. "With the ongoing drive to improve energy efficiency, fuel poverty, environment and carbon reduction issues, backed up by government funded schemes, we have a positive stance." 175p target. Shares +1.9% at 120p. ([email protected]) 0847 GMT [Dow Jones] Investec Securities raises ASOS (ASC.LN) price target to 895p from 570p. Recognises the company's solid growth track record and the increased credibility of its international growth story following the new warehouse investment. Expects significant earnings growth to continue well into FY'12 and FY'13. "However, we believe the market is already discounting growth to at least GBP600M of sales in five years, and remain holders of the stock." Shares -0.8% at 853p. ([email protected]) 0832 GMT [Dow Jones] The departure of Micro Focus (MCRO.LN) CFO Nick Bray, possibly to a competitor, is likely to overshadow the group's solid FY results, particularly given weaker-than-expected cash conversion, Piper Jaffray says. "Investors' first real opportunity to assess new CEO, Nigel Clifford, will be today and we expect a message of tightening the bolts on the recent acquisitions before returning to M&A later in the year," says Piper Jaffray. "We continue to see value in the shares," but they may tread water near term, the brokerage says. Overweight rating, 520p target. Shares -12% at 464p. ([email protected]) 0826 GMT [Dow Jones] KBC Peel Hunt Thursday initiates coverage of Entertainment One (ETO.LN) with a buy rating and 115 pence target. KBC Peel says the firm should continue to grow and could be an attractive asset for larger film companies. Analyst Patrick Yau says film markets have proven both defensive and stable throughout the downturn. He says as physical markets decline over time, the company is hedged through its ownership of digital music, movie and TV rights. Shares are flat at 80p.([email protected]) 0733 GMT [Dow Jones] British American Tobacco's (BTI) CEO appointment is "a pretty logical progression," says Evolution's Chas Manso. He doesn't expect any major changes to BAT's strategy after Nicandro Durante takes the helm. Manso adds that Durante has already had dealings with the analyst community and has "come across very well." Manso has a buy recommendation. Shares -0.5% at 2143p. ([email protected]) 0723 GMT [Dow Jones] Ambrian initiates coverage of Oxford BioMedica (OXB.LN) with a buy rating, and fair value of 24p. Analyst Chris Redhead is confident the biotechnology company can secure a deal for its experimental Parkinson's disease treatment ProSavin within nine months. Adds investors can also expect to see data from a promising eye disease program with Sanofi-Aventis (SAN.FR) in 2011. Redhead says the company is adequately-financed, with GBP25.3 million in the bank, but this isn't reflected in its share price. The company's gene therapy technology is "ground-breaking," he says. Shares flat at 11.5p. ([email protected]) 0711 GMT [Dow Jones] Go-Ahead's (GOG.LN) full-year pre-close trading is slightly behind Shore Capital's higher-end expectations. The brokerage says there's scope to nudge down its 2011 forecasts by GBP5 million due to a higher tax rate and more cautious forecasts in the rail segment. Buy recommendation. Shares -3.5% at 1273p. ([email protected]) 0657 GMT [Dow Jones] Shore Capital downgrades McBride (MCB.LN) to hold from buy following the company's subdued update, which showed flat FY sales. Says the primary sales slowdown has been in Europe, with the group citing weak retail sales across many markets, such as Spain, France and Holland, rather than any increase in competitor activity. Also notes management highlighted the growing impact from rising input costs. As a result, Shore foresees further pressure on margins, with costs recovery likely to be a 3-6 months process. Shares closed Wednesday at 179p. ([email protected]) 0648 GMT [Dow Jones] Goldman Sachs raises Weir Group (WEIR.LN) price target to 1550p from 1447p as it adjusts estimates to reflect stronger market recovery in '10, a stronger SPM business, and the Linatex acquisition. Raises '10/'11/'12 EPS estimates by 14%/8%/6% respectively to 91p/101p/112p. "We continue to view Weir shares as an attractive way of gaining exposure to the minerals, oil and gas and power generation sectors, markets we believe should enjoy attractive structural growth over the next cycle." Reiterates buy rating. Shares closed Wednesday at 1102p. ([email protected]) 0645 GMT [Dow Jones] Micro Focus International's (MCRO.LN) FY results are fine, says Panmure Gordon. Notes the license sales are stronger than expected. Says Nick Bray resigning as chief financial officer is a disappointment, but the shares look cheap on Panmure's unaltered forecasts of 12.1xPE. Shares closed Wednesday at 528p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 24, 2010 08:39 ET (12:39 GMT)