UK MARKET TALK ROUNDUP: BROKERS COMMENTS

15th Jul 2010 07:47

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] 0647 GMT [Dow Jones] Experian (EXPN.LN) 1Q figures overall are better than expected, says Shore Capital, although the mix of business shows an increasing divergence in what drives revenues, with interactive services and Latin American business in particular much stronger than expected, while North American credit services business still lagging and UK weak. "Experian's future is in interactive services and new markets, not the credit-checking business," analyst says. Shore Capital has a hold rating which is under review pending a meeting today. Shares closed Wednesday at 634p. ([email protected]) 0640 GMT [Dow Jones] UBS raises ASOS (ASC.LN) price target to 960p from 750p as it lifts its earnings forecasts to reflect increased confidence in ASOS's international growth prospects. Notes a stronger than expected start to FY '11, with sales growth up in response to higher stock levels and an increased number of product lines. Raises '11 EPS estimate to 27p from 26.7p and '12 EPS estimate to 35.3p from 33.2p. "Fundamentally, we believe ASOS is a strong business and that it is capable of delivering exceptional growth, justifying its premium to the sector." However, reckons the stock is fully valued. Keeps at neutral. Shares closed Wednesday at 949p. ([email protected]) 0632 GMT [Dow Jones] A modest rally in GlaxoSmithKline's (GSK.LN) shares could follow after the FDA voted in favor of keeping Avandia on the US market, says Citigroup. The brokerage notes the withdrawal of Avandia could have reduced the group's '11 EPS by 3.3%, or 6.4% in the event of worldwide withdrawal. "The reaction we saw to the recent AstraZeneca (AZN.LN) Crestor victory suggests a stronger response could occur than purely driven by the earnings impact." Expects the FDA to rule within a couple of weeks, and thinks it will follow the panel recommendation by further restricting Avandia use. Has a buy rating, and 1375p price target. Shares closed Wednesday at 1182p. ([email protected]) 0624 GMT [Dow Jones] The debate on GlaxoSmithKline's (GSK.LN) Avandia medicine will likely continue, despite the FDA Advisory Committee voting in favor of keeping the drug on the U.S. market, says Jefferies. While the shares responded positively in the U.S. following the announcement, says there may be further talk as to how precisely the FDA will now act. But says the positive panel recommendation should be seen to cancel out the perceived increased litigation risk. Adds that a short-squeeze in the very near term may also help the shares to perform. Maintains buy rating and 1275p price target. Shares closed on Wednesday at 11812p. ([email protected]) 0620 GMT [Dow Jones] UBS cuts Hansen Transmissions (HSN.LN) price target to 75p from 100p to reflect ongoing challenges in the wind industry and the lack of positive near-term catalysts. Does not expect a significant short-term rebound for Hansen, and reckons direct-drive technology will pose an issue in the medium term. Cuts '11 EPS estimate to EUR0.01 from EUR0.03 and '12 EPS estimate to EUR0.04 from EUR0.09. Keeps the stock at neutral. Shares closed Wednesday at 70p. ([email protected]) 0617 GMT [Dow Jones] Citigroup downgrades Ashmore Group (ASHM.LN) to hold from buy and lowers the price target to 300p from 325p. With slowing fund flow momentum and performance fees driving a fall in FY '11E EPS, Citigroup finds it difficult to see Ashmore building on its premium rating. It thinks significant further upside for Ashmore looks unlikely. However Citigroup notes Ashmore's strong longer-term performance track record and says its well positioned to capture longer-term structural growth in assets under management, due to increasing institutional allocations to emerging markets. Shares Wednesday at 273.9p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 15, 2010 02:47 ET (06:47 GMT)