UK MARKET TALK ROUNDUP: SHARES GAINING

14th Jun 2010 12:23

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] 1123 GMT [Dow Jones] Shore Capital upgrades Go-Ahead Group (GOG.LN) to buy from hold, saying it is possibly the only UK rail operator to retain a significant element of cyclical upside from an improvement in rail volumes. "With around 30% of group profits generated from rail operations, high operational gearing could drive earnings growth in the near term, with, we estimate, every 1% increase in rail revenue increasing EPS by 6.9%." Furthermore, reckons Go-Ahead remains well placed to potentially win an additional franchise, with three franchises up for renewal in '10/'11. Shares +1.6% at 1237p. ([email protected]) 1112 GMT [Dow Jones] Brewin Dolphin raises Majestic Wine (MJW.LN) price target to 290p from 270p following the company's excellent set of FY results. Says the results highlights a strong recovery in 2H, adding the increase in the final dividend should be taken as a sign of confidence. Notes pretax profit of GBP16M is GBP0.5M ahead of the brokerage's estimate. Says the current year has started off well, but Brewin Dolphin reckons comparatives will get tougher as the year progresses. Keeps the stock at hold. Shares +5% at 285p. ([email protected]) -0 1002 GMT [Dow Jones] Goldman Sachs boosts ASOS (ASC.LN) target price to 1280p from 800p. In its FY10 results, the company indicates continuation of the strong growth trajectory reported at its April trading update, notes GS. The bank adds that retail sales for the nine weeks to June 6 are up 58% year-on-year, with the UK +36% year-on-year and International more than doubled year-on-year. "A new warehouse, initially to support GBP600M of sales but with potential for expansion to GBP1B, was also announced," GS adds. Buy rating. Shares +1.3% at 756p.([email protected]) 0949 GMT [Dow Jones] Weir Group's (WEIR.LN) acquisition of Malaysia-based Linatex fits well within the group, says Arden Partners. Arden notes the company's trading update, which it reckons is very positive. "Not only are they seeing better spares business at SPM where management now expect sales to be up 25% on previous target but more importantly they are also seeing original equipment orders starting to come through in all three divisions, which bodes well for growth into 2H '10 and onwards." Meanwhile, Arbuthnot says the acquisition looks strategically sound and will add to earnings. Both brokerages have the stock at buy. Shares +10.3% at 1048p. ([email protected]) 0922 GMT [Dow Jones] Investec Securities raises Aggreko (AGK.LN) price target to 1550p from 1500p, following an investor visit last week. Says the visit reconfirmed Investec's view that there remains strong earnings growth potential for the foreseeable future. Says on current year valuation grounds, the stock is no longer cheap, but notes its stance has been to take the long view, so keeps at buy. Shares +1.8% at 1440p. ([email protected]) 0842 GMT [Dow Jones] UBS upgrades Standard Chartered (STAN.LN) to buy from neutral. It says that at 2.3x price/tangible net-asset-value, Standard Chartered remains one of the highest-valued banks in UBS' universe. "We recognize that bank valuations are generally depressed, but Standard Chartered faces neither the funding nor sovereign strains of many peers," UBS says. However, it adds that "the more uncertain macro picture has caused us to add 50 basis points to our cost of equity, shaving 100p off our price target [of 1850p]." Shares +1.1% at 1632p. ([email protected]) 0807 GMT [Dow Jones] Royal Bank of Scotland upgrades Pennon Group (PNN.LN) to buy from hold, and raises its price target to 640p from 570p as it takes a look at the UK water sector. Says the company had a good year in '09/'10, with results sharply ahead of expectations. Also notes the dividend policy was ahead of expectations and the Lakeside energy from waste plant is now on line and included in the valuation. Raises Northumbrian Water Group (NWG.LN) price target to 330p from 310p, and keeps at buy following the company's better-than-expected FY results. Pennon shares +1.6% at 547p, and Northumbrian +0.5% at 288p. ([email protected]) 0754 GMT [Dow Jones] UBS upgrades Enterprise Inns (ETI.LN) to neutral from sell. Says the shares became over-valued on the good news of the company's refinancing of its bank facility. "Since the shares have returned to what we would consider to be fair value, we are upgrading the rating," it adds. Has a 110p target price. Says in the long-term, the leased pub model will struggle as per capita beer consumption appears to be in chronic decline, but the FIFA World Cup 2010 "offers an opportunity for substantial increases in beer sales," noting that approximately half of gross profit at Enterprise Inns comes from beer sales. Shares +4.1% at 110p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 14, 2010 07:23 ET (11:23 GMT)