UK MARKET TALK ROUNDUP: BROKERS COMMENTS

21st Jun 2010 07:56

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] 0656 GMT [Dow Jones] Morgan Stanley upgrades Thomas Cook Group (TCG.LN) to equalweight from underweight but retains a 230p target. Whilst uncertainties over current trading against the backdrop of largely fixed summer capacity remain, the company can reach the brokerage's forecasts this year says Morgan Stanley. "while [volcanic] ash costs mean 3Q is unlikely to be that encouraging, cost savings are skewed to 2H and forex is more favorable, so the companies are confident they can make our FY forecasts," Morgan Stanley says. "With the shares on 8x P/E, a 5.5% dividend yield and below our price target, we cannot justify being underweight." Shares closed Friday at 201p. ([email protected]) 0654 GMT [Dow Jones] HSBC downgrades Game Group (GMG.LN) to underweight from neutral. Says difficult underlying market trends are weighing on top-line growth. Says there will be a small catalyst in the 3Q with motion sensor technology but says 1H will deliver a pretax loss. Does not see any major catalysts until the launch of fourth-generation consoles from FY '13. Lowers '11 EPS forecast by 36% to 8.4p Cuts the price target to 75p from 100p. Shares closed on Friday at 83p. ([email protected]) 0646 GMT [Dow Jones] HSBC upgrades ASOS (ASC.LN) to overweight from neutral. Says the company announces a small pretax profit beat in its final results and current trading is significantly ahead of market expectations. Says in current trading, group retail sales for the nine weeks to June 6 are up by 58%. Pushes up the price target to 1000p from 660p. Shares closed Friday at 761p. ([email protected]) 0635 GMT [Dow Jones] Investec downgrades Arm Holdings (ARM.LN) to hold from buy. Thinks the share price now reflects much of the medium-term upside. Still thinks company specifics will remain positive, but is concerned that the industry outlook may be reaching a short-term peak. Says forecasts are now incorporating best-case scenarios for consumer spending and the rush towards smartphones. Says "this may well materialize but is unlikely...to be substantially exceeded." Maintains 290p price target. Shares closed Friday at 290.2p. ([email protected]) 0558 GMT [Dow Jones] Citigroup downgrades Victrex (VCT.LN) to hold from buy, saying the shares have risen 45% year-to-date. Says on cycle-year '10 earnings Victrex shares trade on 18.8x PE and 11.5x EV/Ebitda, which is at the top of its historical range. However, increases the price target to 1150p from 1100p. Sees EPS momentum skewed to the upside given the potential growth of Invibio, and the probability that sterling remains weak and the economy continues to recover. Lifts '10 EPS forecast to 61.1p from 59.7p, and '11 EPS to 71.3p from 64.9p. Shares closed Friday at 1140p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 21, 2010 02:56 ET (06:56 GMT)