UK MARKET TALK ROUNDUP: SHARES GAINING

29th Jun 2010 10:29

Stocks on the rise in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 0929 GMT [Dow Jones] Panmure Gordon upgrades Pendragon (PDG.LN) to buy from hold following a trading update. The statement suggests Pendragon continues to trade in line with expectations and that it should deliver a solid set of 1H results, thus providing good underpinning for full-year forecasts, which are unchanged. "Debt levels will be higher during 1H, but this is expected given increased activity levels, although reducing this remains a key objective," says Panmure. It also cites "25% upside to our unchanged target price of 30p equating to a 2011E P/E of 9.6x and an EV/Ebitda of 3.7x." Shares +1.1% at 24p. ([email protected]) 0822 GMT [Dow Jones] It would be a surprise if ABB (ABB) increased its offer for Chloride (CHLD.LN) says Seymour Pierce. Says any bid materially above the original ABB 325p offer (plus dividend), would be paying over 30x FY '11E earnings for a company with relatively little technology and a service business principally based around supplying replacement batteries. Says Emerson's (EMR) increased offer comes as a successful ABB bid would be a serious threat to its business outside of Europe. Says, "[this] has pushed Emerson to pay ransom-strip prices for what is a relatively mundane business." Has Chloride at hold with 325p price target. Shares +10.5% at 385p. ([email protected]) 0810 GMT [Dow Jones] Chloride Group (CHLD.LN) shares +10.5% at 385p, after U.S. industrial technology company Emerson Electric Co (EMR) Tuesday raises its offer to buy Chloride to 375p per share, valuing the UK company at GBP997M and trumping an earlier offer from Swiss engineer ABB Ltd (ABB). KBC Peel Hunt says Emerson has identified GBP33M of annualized cost savings, justifying a substantially higher bid price. "After an initial low-ball bid, Emerson now appears to be ceding most of the economic benefit of the merger to Chloride shareholders," it adds. Says that 375p is a fair value, but ABB may feel that the strategic premium for entering the uninterruptible power supply market merits a counter offer," adds KBC. ([email protected]) 0735 GMT [Dow Jones] JPMorgan Cazenove upgrades PV Crystalox (PVCS.LN) to overweight from neutral. Says the stock is its top pick in the sector, due to its net cash position, low valuation and relatively low exposure to Germany. In general for the European solar sector, thinks the worst is priced in but at the same time, there is little evidence of a rapid recovery. Has 80p price target. Shares +2.3% at 56p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 29, 2010 05:29 ET (09:29 GMT)