UK MARKET TALK ROUNDUP: BROKERS COMMENTS

30th Jun 2010 07:43

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] 0643 GMT [Dow Jones] Jefferies initiates coverage of Smith & Nephew (SN.LN) at buy with 790p price target. Sees significant re-rating in the orthopedics industry and says the company is best placed for this. Says its valuation is among the most attractive in the sector and a modest acceleration in growth coupled with margin improvements should be a catalyst for a re-rating. Also notes the company's diversified revenue stream. Says the main contribution to Smith & Nephew's growth will come from endoscopy and advanced wound management, leading to 7% revenue growth in '11 versus 2% in '09. Shares closed Tuesday at 634.5p. ([email protected]) 0637 GMT [Dow Jones] The appointment by Premier Foods (PFD.LN) of Ronnie Bell as its non-executive chairman is a good move, says an analyst. Says he has extensive food experience, with 30 years at Kraft (KFT), as well as plenty of non-executive experience. Thinks he is a heavy-weight, and the company is trying hard to improve its profile. Sees this as a modest positive for the shares Wednesday, which are looking oversold of late. Shares closed in the previous session at 19.5p. ([email protected]) 0612 GMT [Dow Jones] JPMorgan Cazenove upgrades AstraZeneca (AZN.LN) to neutral from underweight following the US Crestor patent ruling in its favor. Raises its price target to 3360p from 2960p. Says while generic challengers are likely to appeal, the probability of reversing this ruling appears to be low. Says the focus should now shift to the potential upside from a share buyback program. Thinks the upcoming Brilinta panel may cause further volatility, but thinks the upside from a share buyback far outweighs the potential risk from a negative vote here or delay in approval. Shares closed on Tuesday at 2947p. ([email protected]) 0607 GMT [Dow Jones] UBS raises AstraZeneca (AZN.LN) price target to 4100p from 3800p after it successfully defends its U.S. Crestor patent. Says this victory significantly safeguards around 17% of earnings, at risk due to the Crestor trial. From here, expects earnings momentum to continue. Says with AstraZeneca due to generate about $35Bln of net cash by '15E, the announcement of a major buyback could lead to up to 20%-40% of consensus '15 EPS upgrades, just after the FDA's meeting on Brilinta on July 28. Keeps at buy. Shares closed Tuesday at 2947p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 30, 2010 02:43 ET (06:43 GMT)