UK MARKET TALK ROUNDUP: SHARES GAINING

16th Jul 2010 13:06

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] 1206 GMT [Dow Jones] Charles Stanley raises its '12 EPS estimate for Burberry (BRBY.LN) by 6% to 47.7p to reflect the anticipated additional profit contribution from China, following the company's acquisition of its Chinese retail operations. Says the acquisition price of GBP70M appears reasonable. The agreement will enable Burberry to take full control of distribution in a country its management regards as one of the world's key growth luxury goods markets, the brokerage says. Adds the group is highly cash generative and while the stock's valuation represents a premium to the global luxury goods peer group, this is justified by superior earnings growth. Accumulate rating. Shares +2.4% at 810p. ([email protected]) 1043 GMT [Dow Jones] UBS raises Premier Oil (PMO.LN) target price to 1675p from 1560p following the company's trading update. It says Premier has added a number of new exploration prospects to its inventory for 2H10 and 1H11 production. It adds that Premier is guiding toward an additional 165M barrels of oil equivalent/day gross resource in Catcher [UK Central North Sea) which is conservative relative to Encore Oil's (EO.LN) implied additional 180M-to-300M barrels of oil equivalent/day recoverable resource. "For Premier's exploration portfolio, we now forecast 77% unrisked exploration upside over the next 12 months." Buy rating. Shares +2.6% at 1483p. ([email protected]) 1004 GMT [Dow Jones] Citigroup raises Blinkx (BLNX.LN) price target, almost doubling it to 100p from 55p. Citi cites strong search volumes, steady monetization and high online video CPMs [impressions per 1000 page view]. These, combined with favorable forex moves drive the target price increase. Citi says recent newsflow, including commentary on advertising from Google, the signing of new content deals and the creation of new distribution platforms reinforces Blinkx's value proposition and should drive growth/returns. Buy rating. Shares are +2.3% at 67p. ([email protected]) 0924 GMT [Dow Jones] Panmure Gordon upgrades SThree (STHR.LN) to buy from hold ahead of the company's final results on July 19. "With ongoing expansion of headcount and offices indicating confidence in a future recovery, this means that we expect profitability to be more 2H-weighted than last year, as previously flagged." That said, the brokerage says that with a solid yield of 4% still on offer and good cyclical upside potential, SThree is an attractive stock to own. I reckons the long-term risk/reward profile is positive from here. Has 330p target. Shares +2.3% at 291p. ([email protected]) 0923 GMT [Dow Jones] Evolution lifts Burberry (BRBY.LN) price target to 830p from 780p following the company's acquisition of its Chinese business from its franchisee. As a result, Evolution lifts '12 EPS forecast by 6% to 48.1p. It says the deal is expected to add GBP20M to group operating profits in FY '11/'12. Strategically, the deal will enable Burberry to ensure the brand is presented to consumers in a consistent manner and will also give the company full control of the expansion of the business, says the brokerage. Keeps at neutral. Shares are +2.9% at 813p. ([email protected]) 0855 GMT [Dow Jones] Burberry's (BRBY.LN) acquisition of its Chinese business from its franchise partner is an "excellent" deal financially and gives the company greater control of its products, Evolution Securities analyst Dennis Weber says. Adds: "Strategically, this will allow Burberry to ensure that the brand is presented to consumers in a consistent fashion. It will also give the company full control of the further expansion of the business." Neutral rating and 830p target price. Shares +3.2% at 815p. ([email protected]) 0853 GMT [Dow Jones] Investec upgrades Reckitt Benckiser Group (RB.LN) to buy from hold. Is surprised by the share price weakness since the 1Q results and says the de-rating presents a buy opportunity for investors. Says Reckitt continues to deliver organic growth in its base business, and its superior cash conversion is being undervalued. Says: "To us this represents a unique and valuable investor proposition that should be prized." Cuts the price target to 3560p from 3600p. Shares are +0.3% at 3262p. ([email protected]) 0831 GMT [Dow Jones] Societe Generale upgrades British Airways (BAY.LN) to buy from hold and lifts the price target to 285p from 220p. The new price target indicates 37% potential upside potential says SG. At its 1Q results on July 30, SG expects the airline to maintain its '11 guidance for break-even pretax profit, despite the negative impact of the strikes on traffic. SG arrows its '11 loss per share estimate to 1.2p from 6.8p, due to a better cost performance. It raises its '12 EPS forecast to 24.8p from 24.2p. Shares +2.4% at 208.5p. ([email protected]) 0800 GMT [Dow Jones] Credit Suisse upgrades London Stock Exchange (LSE.LN) to neutral from underperform, but its cuts price target to 680p from 710p. Says the downside risks in terms of competition in UK cash equities are increasingly discounted in the LSE's share price. Notes the stock is down 10% in the last year, and 70% from its peak. "Moreover the LSE's March 2012E PE multiple of 9x is at the bottom end of the historical valuation range and with no signs of another EPS downgrade cycle." Shares +0.3% at 625p. ([email protected]) 0727 GMT [Dow Jones] Merchant Securities keeps staffing firm Healthcare Locums (HLO.LN) on a buy rating. Says the company's three planned acquisitions of nursing staffing agencies are "equally encouraging" for the future prospects of the group. Reckons the acquisitions will add to bottom-line profits in the first full year. Says it expects earnings to be enhanced by at least 3% in 2011. Keeps a 300p price target. Shares +2% at 164p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 16, 2010 08:06 ET (12:06 GMT)