UK MARKET TALK ROUNDUP: SHARES GAINING

11th Jun 2010 08:51

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] 0751 GMT [Dow Jones] BP (BP) +5.3% at 385.0p, climbing to the top of the FTSE 100, after the shares have lost about 12% this week alone. Sam Wright at Spreadex says the speculators are pausing for breath, despite the US government doubling its estimate of the Gulf oil spill. Another London-based trader says the market has now realized it has mispriced the risk of BP defaulting and it is highly unlikely the end of the company is nigh. Also detects that the politicizing of the saga is now wearing thin. ([email protected]) 0751 GMT [Dow Jones] UBS raises ASOS (ASC.LN) price target to 750p from 630p following the company's strong preliminary results. Says the better growth reflects stronger buying with 64% more products, as ASOS starts FY '11 with a more positive outlook on consumer spending for its target customer group. Raises '11 EPS estimate to 26.7p from 25.3p and '12 EPS estimate to 33.2p from 31.1p. Says ASOS demonstrates that the structural shift online and demand for fast fashion remain more powerful business drivers than the general state of the UK economy. Keeps the stock at neutral. Shares +2% at 729p. ([email protected]) 0735 GMT [Dow Jones] The 15% leap in online fashion retailer Asos PLC's (ASC.LN) share price Wednesday, following full-year results that were "merely in line with expectations", came as a surprise, says FinnCap analyst David Stoddart. Says as Asos' management is seeking to restrain fiscal 2011 forecasts, the reason for the rise appears to lie in expectations for international growth potential and bid hopes. But says these points are almost universally accepted in the market already, while doubts persist about the level of competition facing Asos overseas. Rates the stock "sell". Shares +2% at 729p. ([email protected]) 0717 GMT [Dow Jones] The bid approach for Brit Insurance (BRE.LN) by a private equity firm should encourage investors in the sector, says Shore Capital. Says with a number of companies in the sector trading at significant discounts to Shore's '10TNAV estimates, the approach highlights the value latent in the sector. Still, "at current ratings we do not suspect that management was under enormous pressure to accept." Notes hurricane season, which has in the past impacted potential M&A activity in the sector, is rapidly approaching. Keeps at hold. Shares +22% at 888p. ([email protected]) 0716 GMT [Dow Jones] Citigroup cuts Home Retail (HOME.LN) price target to 220p from 290p after a weaker than expected first quarter, particularly at Argos. Given fading household cashflow in 2H and the risk of a more competitive electrical market around peak trading, cuts February '11E pretax profit forecast by 9% to GBP270M. Keeps at hold, reflecting the view that consumer cashflow will deteriorate through '10. Says despite Home Retail's strong cash generation, about 7% dividend yield, and earnings accretion from buybacks, the group's 7x '11E EV/EBIT multiple is unlikely to expand. Shares +0.7% at 230p. ([email protected]) 0704 GMT [Dow Jones] Citigroup raises Halfords (HFD.LN) price target to 630p from 570p after rolling forward the target year and after EPS increases. Says the preliminary results show pretax profit slightly ahead of forecasts, while the company is targeting 15% EPS compound annual growth rate over the medium term. Lifts '10 EPS forecast to 39.4p from 38.6p and '12 to 51.9p from 49.7p. '11 EPS nudges down marginally to 45.9p from 46p. Says Halfords offers a combination of defensive qualities, growth opportunities, a strong balance sheet and a progressive dividend. Keeps at buy. Shares +1.1% at 536p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 11, 2010 03:51 ET (07:51 GMT)