UK MARKET TALK ROUNDUP: SHARES GAINING

6th Jul 2010 12:12

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] 1112 GMT [Dow Jones] Tullow Oil's (TLW.LN) update shows the company has had a very successful 1H, with 73% drilling success, says Charles Stanley. Also notes some exciting prospects for 2H, in particular Owo-1 in Ghana. Says '10 will be a landmark year for the group as its Jubilee field comes on stream at the end of the year. For investors who want long-term exposure to a group with an excellent exploration record and an exciting drilling program, Tullow's underperformance could provide a good entry point, Charles Stanley says. However, reckons the share price is up with events at the moment. Reiterates hold. Shares +3.5% at 1077p. ([email protected]) 1048 GMT [Dow Jones] Liberum upgrades Balfour Beatty (BBY.LN) to hold from sell. With cycle-year '10 P/E of 7.1x and dividend yield of 5.6%, Balfour is now too cheap for Liberum to be a seller. Meanwhile, Liberum says the trading statement is in line with expectations and construction margins are holding up well. It also thinks contract performance seems strong. In the long-term it sees some exciting opportunities in renewable, power and perhaps in the private sector. But the medium term outlook tempers the brokerage's enthusiasm. Shares +3.5% at 244.9p. ([email protected]) 1024 GMT [Dow Jones] Collins Stewart upgrades Wm. Morrison (MRW.LN) to buy from hold and raises price target to 300p from 277p. Notes Morrison is now one of the cheapest European food retail stocks, at an almost 10% discount to the sector. Thinks this is unjustified given the earnings growth potential, the strength of the balance sheet and the strategic opportunities that will be available to the new CEO in early September. Shares +2.8% at 275p. ([email protected]) 0959 GMT [Dow Jones] Arbuthnot Research upgrades Spirax-Sarco (SPX.LN) to buy from neutral, following the company's 1H trading update. The brokerage says its caution on Spirax was unnecessary and the results demonstrate the quality of the company's businesses. Says sales in 1H '10 have risen by 10%, including 2% from acquisitions and 2% from exchange rates. Says this implies sales of around GBP276M, versus the brokerage's estimate of GBP258M. Expects to raise the price target from 1565p. Shares are +7.6% at 1461p. ([email protected]) 0739 GMT [Dow Jones] PartyGaming's (PRTY.LN) potential consolidation in the sector could "transform" the company's financial performance, Liberum Capital analyst Richard Taylor says. "The company admit that talks over a potential (tie-up) have taken longer than expected, but that they remain in talks. We retain our view that this could potentially transform earnings given the duplication of costs within online gambling companies," he says. Taylor says the company's second-quarter performance is better-than-expected, although it may lead to small full-year earnings consensus downgrades. Has a buy rating. Shares +3.6% at 229p. ([email protected]) 0720 GMT [Dow Jones] Tullow Oil's (TLW.LN) Owo-2 well currently drilling offshore Ghana will be the next big catalyst for the company, says NCB Stockbrokers analyst Peter Hutton. "Potential from the Owo-1 prospect west of Tweneboa will make or break [Tullow's] upside guidance of 1.4 billion barrels of oil equivalent," he says. The result could be announced within two weeks, he adds. Gives accumulate rating, 1260p target. Shares +3% at 1072p. ([email protected]) 0717 GMT [Dow Jones] JPMorgan Cazenove initiates Hikma Pharmaceuticals (HIK.LN) at overweight with 870p target, citing leading long-term growth and the potential for a near-term EPS beat. Notes Hikma's competitive advantages as the top local player in the Middle East & North Africa pharmaceutical market, which has shown sustainable growth of 14% per year between '05 and '09, well above 5%-7% global pharma market growth. JPM expects a substantial earnings beat in the company's H1'10 results and upgrades to '10 EPS, based on strong US generics sales. Shares +1.1% at 696p. ([email protected]) 0701 GMT [Dow Jones] Seymour Pierce remains cautious on Punch Taverns (PUB.LN). In tone, the trading update is more positive than in the last 2 years, it says. However, "we do not believe that the underlying long-term trend has moved into the growth momentum that the business needs to provide sustainable growth in value for equity holders." Says debt remains a key concern. Rates at sell. Shares +2.2% at 66p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 06, 2010 07:12 ET (11:12 GMT)