UK MARKET TALK ROUNDUP: BROKERS COMMENTS

8th Jun 2010 08:00

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] 0700 GMT [Dow Jones] Goldman Sachs upgrades Weir Group (WEIR.LN) to buy from neutral and lifts the price target to 1447p from 1070p. Says Weir offers attractive exposure to the mining and minerals industries and gas and power generation sectors. Says this should allow the company to enjoy above average structural growth over the next cycle. With Weir shares are trading at an unwarranted discount to the sector on EV/EBIT and PE on '10 and '11 forecasts, thinks the current share price offers an attractive entry point. Shares closed Monday at 894p. ([email protected]) 0656 GMT [Dow Jones] WH Smith (SMWH.LN) offers a sales update in line with expectations, says Shore Capital and thus there is unlikely to be any changes to consensus pretax profit estimates. Says WH Smith is a well run, defensive company with a strong balance sheet and good cash generation. Shore adds WHS's shares are trading on an undemanding valuation and are yielding an attractive 4.1%. Hence, keeps a buy recommendation. Shares closed Monday at 454p. ([email protected]) 0646 GMT [Dow Jones] Aggreko's (AGK.LN) trading statement is significantly ahead of expectations says an analyst. Says demand remains strong and highlights good revenue growth for international power projects in the first half, with strong margins. Says management expects 1H sales to have risen 10% on a constant currency basis with trading profit ahead by about 20%. Shares closed Monday at 1354p. ([email protected]) 0646 GMT [Dow Jones] WH Smith (SMWH.LN) trading update shows total group sales -3%, with like-for-like sales -4%, compared to the same period last year. Arden Partners' analyst Nick Bubb was looking for -3 LFL, "so the -4 is marginally worse, but not disastrously so." He says the company has turnover rents in airports, "so they have some protection from lost business, whilst the high street LFL is always down as they engineer a richer gross margin sales mix." He says it does not look like profit forecasts will change, "but I am above consensus and will probably edge down. Still cheap long term." Has a buy rating and 600p target. Shares closed at 454p Monday. ([email protected]) 0639 GMT [Dow Jones] London & Stamford Property's (LSP.LN) GBP27.5M residential acquisition at Bridges Wharf on the south bank of the Thames is small, but it is pleasing that it's sourcing value opportunities, says an analyst. Says London & Stamford is building on the success it has had on the residential side, already seen at Highbury. Shares closed Monday at 124p. ([email protected]) 0636 GMT [Dow Jones] Compass Group's (CPG.LN) acquisition of Southeast Service Corp for $65M cash is in line with the company's strategy of extending its range of food services says an analyst. However, adds, the acquisition is relatively small and not particularly significant. Says Southeast Service is a provider of soft support services operating in the education, business and industry sectors in the US. Compass shares closed Monday at 550p. ([email protected]) 0632 GMT [Dow Jones] Credit Suisse raises Johnson Matthey (JMAT.LN) to neutral from underperform, but slightly reduces target price to 1660p from 1670p. Says guidance for 2H has been more cautious. "We are broadly in line with current full year consensus EPS forecasts through FY 2012/13, and as such we see limited drivers for upgrades to consensus forecasts," it adds. Still, brokerage says U.S. heavy duty diesel [HDD] markets are picking up in calendar 2H10. "Johnson Matthey is a leader in the HDD market and we see this is a key growth driver going forward," it adds. Shares closed at 1513p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 08, 2010 03:00 ET (07:00 GMT)