UK MARKET TALK ROUNDUP: SHARES GAINING

17th Jun 2010 11:43

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] 1043 GMT [Dow Jones] Goldman Sachs cuts WH Smith (SMWH.LN) price target to 530p from 560p, after reporting continued weakness in like-for-like sales for 3Q '10. Says both the high street and travel divisions are down by 4%. But continues to expect positive growth from FY '11 in the travel business and coupled with space expansion in both divisions, this should support low single-digit growth from FY '11 onwards. Cuts '10 EPS forecast to 45.71p from 46.42p, '11 to 49.20p from 49.82p and '12 to 51.16p from 51.83p. Keeps at neutral. Shares are +0.4% at 434p. ([email protected]) 1042 GMT [Dow Jones] Liberum Capital initiates coverage of Tesco (TSCO.LN) with a buy rating and 450p target. "Tesco is well-positioned to outperform its UK peer group due to its mix of activities and strong market position. Asia is the best performing international division," Liberum says. Liberum expects Tesco to deliver a comparatively robust performance in the UK due to its low price/good value credentials and the growth stimulus from other areas--internet, non-food and financial services. Shares +0.1% at 396p. ([email protected]) 1041 GMT [Dow Jones] Goldman Sachs increases Majestic Wine (MJW.LN) price target to 370p from 356p after its FY '10 results show pretax profit is in line with the upper end of analyst expectations. Says current trading is strong, but tougher comparatives will kick in from September, as the effect of the move to a six from 12 bottle minimum purchase is captured in FY '10 and FY '11 trading. Thinks Majestic will continue to outperform the growing UK wine market. Maintains buy rating. Shares +1.2% at 293p.([email protected]) 1040 GMT [Dow Jones] BP's (BP.LN) establishment of a $20B escrow account for oil spill compensation claims is a positive step forward, says Charles Stanley. It may dissipate some of the political anger that has damaged BP's debt and equity rating. Adds the size of the fund and its independent administration should give some comfort to those affected by the disaster. For investors, the staged payments should be reassuring, while the dividend suspension is prudent given the considerable uncertainty surrounding the leaking well and unknown flow rates, says Charles Stanley. Still, with uncertainty on when the well will be plugged and the longer-term implications, the brokerage keeps the stock at hold. Shares +8% at 364p. ([email protected]) 0935 GMT [Dow Jones] BP's (BP) deal with the Obama administration Wednesday to set up a $20Bln oil liability fund is a pragmatic and conservative approach to the company's woes, says Citigroup. "With net debt around $25Bln and estimated gross cashflow in excess of $70Bln in the 2011-2012 period, we remain of the opinion that BP is well placed to meet the financial liabilities," it says. Even if ultimate spill costs hit $40Bln, BP is still worth a 590p target price and buy rating, it says. Shares +7.7% at 363p. ([email protected]) 0932 GMT [Dow Jones] HansonWesthouse upgrades BP (BP) to buy from hold after the company dealt with near-term uncertainty over the cost of the Gulf of Mexico oil spill. The establishment of a $20 billion oil spill fund, "will alleviate much of the political pressure that has been building in the US. While Tony Hayward must still face Congressional hearings later today [Thursday] he does so in a better position than he would have done earlier in the week," HansonWesthouse says. "The cancellation of the dividend is regrettable, the shares now appear to be undervalued in the short-to-medium term," it adds. [no price target]. Shares +7.7% at 363p. ([email protected]) 0915 GMT [Dow Jones] Westhouse Securities upgrades BP (BP.LN) to buy from hold. Says this reflects the actions put into motion by the company Wednesday to address a significant portion of the near-term uncertainty regarding the impact of the oil spill on the company. Adds that the establishment of the Independent Claims Facility will alleviate much of the political pressure that has been building in the U.S. "While the cancellation of the dividend is regrettable, the shares now appear to be undervalued in the short to medium term," says Westhouse. Shares +7.2% at 361p. ([email protected]) 0914 GMT [Dow Jones] Societe Generale upgrades Antofagasta (ANTO.LN) to hold from sell on valuation grounds. Reckons the market has turned excessively gloomy on the outlook for commodities in general. Thinks base metals prices will trend higher as Chinese infrastructure spending remains very strong, and that spot prices of bulk commodities should be supportive. SocGen expects copper consumption to exceed supply this year, which is likely to push up prices. Also notes copper consumption is supported by ongoing emerging markets infrastructure projects and may also benefit from a recovery in U.S. housing construction. Keeps target price at 850p. Shares +0.2 at 879p. ([email protected]) 0856 GMT [Dow Jones] Standard & Poor's Equity Research upgrades Prudential (PRU.LN) to buy from hold, "now that the dust has begun to settle after the termination of the American International Assurance transaction." Updates earnings forecasts to allow for positive comment around the AGM on sales in Asia and the US. "Our 2010 'as reported' (actual currency, before restatements) forecast sales growth rates are increased to 18% from 10% in the US and to 20% from 6% in Asia." Raises target price to 685p from 622p. Shares +0.4% at 572p. ([email protected]) 0841 GMT [Dow Jones] Collins Stewart upgrades BP (BP.LN) to buy from hold. Says the setting up of a $20B claims response fund and the cancelling of the dividend have clarified two of the most important issues which have been overhanging the shares. Adds some investors may prefer not to hold BP at all for the next several months because of environmental concerns or social conscience issues, and Collins Stewart says it fully acknowledges that the risks on the stock remain high. "Nevertheless, we think the balance of risk and reward has shifted enough to upgrade the stock to buy," it adds. Has 450p target price. Shares +8% at 365p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 17, 2010 06:43 ET (10:43 GMT)