UK MARKET TALK ROUNDUP: BROKERS COMMENTS

6th Jul 2010 07:26

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] 0626 GMT [Dow Jones] Persimmon (PSN.LN) reports very positive numbers ahead of the first half so shares are likely to rise after the statement, says Liberum Capital analyst. Says the company already sold GBP1.5 billion worth of homes for the year, which is really good news and that margins are also ahead of expectations. Adds that borrowings are also lower than expected. Has hold rating. Shares closed Monday at 348p. ([email protected]) 0625 GMT [Dow Jones] UBS upgrades GKN (GKN.LN) to buy from neutral. Says the recent decline in its share price offers a good opportunity to buy the stock again. "Although our investment case and profit forecasts are unchanged, we believe the lower valuation now offers an attractive risk-reward profile for investors," it says. Says GKN is a well-run business with leading technologies, strong market positions and several opportunities. "In addition, we see some further upside risk to profits. Our only major concern remains a low cash conversion, largely as a result of pension payments," adds UBS. Maintains 140p target price. Shares closed at 112p. ([email protected]) 0623 GMT [Dow Jones] Investec Securities upgrades AB Foods (ABF.LN) to buy from hold and raises target to 1080p from 1060p as it takes a more positive view of Primark's valuation ahead of the company's 3Q results on July 8. Increasingly sees Primark as a winning proposition and thinks profit growth at a rate of 12% to 14% per annum is sustainable on a five-year view. Says this merits a premium rating. Thinks the market's valuation on Primark of 7-8x Ebitda/15-16x PER is too low, and reckons 8-9x ebitda is more appropriate. Shares closed Monday at 947p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 06, 2010 02:26 ET (06:26 GMT)