UK MARKET TALK ROUNDUP: SHARES GAINING

21st Jul 2010 16:03

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] 1503 GMT [Dow Jones] Cannacord raises its target price for IG Group (IGG.LN) to 520p from 485p, and keeps a buy rating "to reflect slightly faster revenue growth assumptions," which it pegs at 12% to 13% a year over the next few years. IG Group stock is up 10% at 488p, also helped by an earlier target price upgrade by Bank of America Merrill Lynch, to 500p from 485p. ([email protected]) 1355 GMT [Dow Jones] Reckitt Benckiser's (RB.LN) acquisition of SSL International (SSL.LN) makes both strategic and financial sense, says Charles Stanley. It will enhance Reckitt's ability to make further value-adding acquisitions in over-the-counter healthcare in the future and make the company's balance sheet more efficient. "Little has been said about revenue synergies or growth opportunities, other than in general terms, but it seems likely to us that the SSL business is likely to grow faster, over the next decade, than the household goods businesses, and of course the margins are likely to be higher. So we are wholly in favor of the deal." Has Reckitt at accumulate. Shares +3.2% at 3292p. ([email protected]) 1317 GMT [Dow Jones] GlaxoSmithKline's (GSK.LN) 2Q update is solid, with EPS slightly ahead of expectations and consensus, and sales in-line, says Evolution Securities. Evolution notes beating of consensus by a small margin was mainly driven by a lower tax rate. Noteworthy contributors to profit growth came from emerging markets and the vaccines business, each of which demonstrated over GBP100M improvement in profits compared to the previous year. With the Avandia overhang removed, 2H'10 should represent a period of outperformance, Evolution says. Reiterates buy rating. Shares +1% at 1185p. ([email protected]) 1242 GMT [Dow Jones] BP's (BP.LN) asset sale to Apache Corp (APA) goes a long way towards meeting the $10Bln disposal target the company has highlighted as a way of meeting the costs related to the Macondo oil disaster, says Evolution Securities. Thinks BP got an excellent price for the assets. Also notes that BP has hinted Far East gas assets in Pakistan and Vietnam could be up for grabs. Has BP at buy with 580p price target. Shares are +3.3% at 400p. ([email protected]) 1216 GMT [Dow Jones] BP's (BP) sale of $7 billion of oil and gas production assets in North America and Egypt won't compromise the company's growth strategy, says JPMorgan analyst Fred Lucas. "As a test of the strategic importance of the assets sold to Apache, we challenge investors to find much or any reference to them in BP's recent key strategy updates," he says. BP could raise a lot more money selling assets in Alaksa, the North Sea, or Argentina while still maintaining its strategy, he adds. The speed of the sale also dispels worries about BP's liquidity, he says. Shares +3.3% at 400p. ([email protected]) 1129 GMT [Dow Jones] Top line progression in GlaxoSmithKline's (GSK.LN) 1H results is pleasing, as is the significant cash inflow and net debt reduction, says Jeremy Batstone-Carr, analyst and director of private client research at Charles Stanley. Says investors should not have been surprised by the restructuring or the legal charge both of which impacted the P&L. Adds the dividend increase is in line with expectations. Elsewhere, says news of the filing of Benlysta in the USA and EU remains significant for sentiment. Maintains accumulate recommendation. Shares +0.5% at 1179.5p, nudging a tad higher since the release of the results. ([email protected]) 1006 GMT [Dow Jones] Investec Securities lifts its full-year earnings per share forecast on Next (NXT.LN) to 218p from 213p following a completed share buy-back ahead of the company's first-half trading update on August 4. Expects group to deliver upper end of 1H guidance in retail. Buy rating and 2,420p target price. Shares +2.8% at 2127p. ([email protected]) 1002 GMT [Dow Jones] Royal Bank of Scotland nudges up United Business Media (UBM.LN) price target to 540p from 520p. Notes that industry data suggest there has been modest growth in U.S. tech magazine advertising in 2Q, after several years of decline. Also, says message volumes at PRNewswire are up 4% year-on-year in 1H '10, an improvement on 2H '09 when message volumes were down 5% year-on-year. Narrows its FY '10 organic revenue decline forecast for the print magazine division to -10% from -20%. Keeps at hold. Shares +2.1% at 525p. ([email protected]) 0956 GMT [Dow Jones] Citigroup cuts Cable & Wireless Worldwide (CW.LN) price target to 87p from 110p following the company's profit warning. Brokerage also cuts its '11 EPS estimate to 6.2p from 7.2p and its '12 EPS estimate to 9.1p from 10.2p. Still, notes the sharp fall in the share price on the back of the news and maintains its buy rating on the stock "in the expectation of something of a recovery from here." Shares +1.3% at 70p. ([email protected]) 0946 GMT [Dow Jones] Bank of America Merrill Lynch raises IG Group (IGG.LN) price target to 500p from 480p following an encouraging start to FY'11 and slightly more favorable forex effects than previously estimated. BofA Merrill notes current trading remains strong and reckons the company is well positioned to increase market share. Raises '11 EPS estimate to 33.19p from 32.16p and '12 EPS estimate to 35.75p from 34.76p. Keeps the stock at buy. Shares +5.9% at 469p. ([email protected]) 0937 GMT [Dow Jones] UBS raises IMI (IMI.LN) price target to 800p from 720p, saying it expects 2Q trading to have been strong. Raises '10 EPS estimate to 63p from 60.9p and '11 EPS estimate to 70.8p from 67.4p. "We think investor focus on returns...and free cashflow generation (yield 8%) provides further upside to valuation, while a net cash balance sheet in 2011 is supportive for dividends/buybacks." Notes the stock trades at a 15% discount to the sector and remains a key pick along with Weir (WEIR.LN) and Renishaw (RSW.LN). IMI shares +3.4% at 751p. Keeps at buy. ([email protected]) 0929 GMT [Dow Jones] Royal Bank of Scotland lifts Premier Oil (PMO.LN) price target to 1700p from 1500p. Says the shares still have further to go, even after the re-rating following the recent Catcher discovery in the North Sea, M&A read-across and a well-received analysts' visit to its Southeast Asia operations. Says: "The shares can continue to re-rate on the back of positive sentiment over the growth profile and near-term drilling." Increases '10 production forecast to 44.0kboep/d (thousand barrels of oil equivalent per day) from 43.4kboep/d, on better than expected performance of the Indonesia and UK assets in 1H '10. Keeps at buy. Shares +3.2% at 1476p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 21, 2010 11:03 ET (15:03 GMT)