UK MARKET TALK ROUNDUP: SHARES LOSING

30th Jul 2010 14:33

Stocks on the fall in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 1333 GMT [Dow Jones] Citigroup cuts Barclays (BARC.LN) price target to 442p from 470p ahead of Barclays's 1H '10 results August 5. The key issue will be revenues at Barclays Capital in 2Q, says Citi. It revises down its '10 EPS forecast to 29.6p from 34.5p and '11 to 43.6p from 44.4p. However the market may be discounting too large a drop in revenues at BarCap says Citi and over the next 12-to-18 months it sees a recovery toward levels consistent with guidance. Citi also thinks bears may be ignoring fundamental value inherent in the whole group. Buy rating. Shares -1.3% at 329.8p. ([email protected]) 1211 GMT [Dow Jones] S&P Equity Research raises Reed Elsevier (REL.LN) price target to 470p from 440p after stronger than expected 1H '10 results, particularly for the Reed Exhibitions business. Notes that the shares reacted positively to the results and so thinks the stock is more vulnerable to a correction later in the year when sluggish academic markets and further research & development may hit margins. Maintains sell recommendation. Shares -0.2% at 551p. [email protected]) 1204 GMT [Dow Jones] Credit Suisse raises United Business Media (UBM.LN) price target to 645p from 620p following solid 1H results and an improved outlook. Says organic revenue growth turns positive for the first time in two years, adjusted EPS is 9% ahead of consensus and importantly, forward bookings for its top 20 events for the next 12 months are now up 12% year-on-year. Expects consensus EPS upgrades on these results. Lifts '10E adjusted EPS forecast by 1.9% to 49.9p, and '11E by 3.8% to 56.0p. Maintains outperform recommendation. Shares -5.7% at 541p. ([email protected]) 1012 GMT [Dow Jones] Collins Stewart downgrades United Business Media (UBM.LN) to hold from buy following strong share price performance. The shares have been strong this year and are now trading on a 12.1x FY '10 PER and 9.6x EV/Ebitda, broadly in line with the peer group, says CS. Meanwhile, the interim results are decent relative to the brokerage's forecasts. It says there are several encouraging signs in the performance. News distribution returned to revenue growth, print magazines showed a strong recovery in margins and events delivered 8% profits growth, though driven by the biennial cycle. Keeps at hold. Shares -5.3% at 542.5p. ([email protected]) 0949 GMT [Dow Jones] Panmure downgrades Fidessa Group (FDSA.LN) to hold from buy, but edges its target price up to 1480p from 1474p. It says the shares have outperformed the FTSE All Share by 18.7% in the past quarter, pushing past Panmure's prior target price. It sees a strong set of interim results in the wings, but the "usually reticent Fidessa imanagement will be compelled to repeat its message that growth this year will 'not be as strong as last' - and this is likely to cause the shares to do a double-take and [at best] pause for breath." Shares -1.6% at 1479p. ([email protected]) 0945 GMT [Dow Jones] Citigroup raises Admiral Group (ADM.LN) target price to 1550p from 1250p. "We think the sun, the moon and the stars are coming into perfect alignment in UK motor, such that strong share price momentum is likely to continue at least into 1H results," says brokerage. However, says the unique nature of the business makes it difficult to judge whether or not all of this is in the price. "This good news will underpin the shares at around the 1500p level rather than help it push onto new highs," adds Citi. Has a hold rating on the stock. Shares -0.3% at 1458p. ([email protected]) 0936 GMT [Dow Jones] Panmure cuts its target price on Rentokil Initial (RTO.LN) to 148p from 151p, following the release of 2Q results. Says 2Q results are 5.5% ahead of its forecast at the adjusted pretax profit level, and cost savings are running ahead of the full year target, with cash generation remaining strong. However, Panmure trims its FY EPS forecasts by around 3%, to take account of forex pressure on the back of a weaker euro, and thus cuts its target price. Still, keeps at buy with in excess of 40% upside potential in its share price. Shares -0.8% at 106p. ([email protected]) 0935 GMT [Dow Jones] Societe Generale cuts BAE Systems (BA.LN) price target to 360p from 400p. It says BAE's 1H results are strong and well ahead of consensus expectations. But it notes that management talks of the anticipated challenging trading environment as defense budgets come under pressure. SG says this is being addressed by cost reduction and efficiency improvements. It also thinks investors are waiting for the publication of the strategic defence and security review in late October. Keeps at buy. Shares are -0.3% at 319p. ([email protected]) 0919 GMT [Dow Jones] Nomura lowers BAE Systems (BA.LN) target price to 410p from 450p. Says this cut in target price is to account for a higher risk premium investors are likely to demand given the increased long-term budget uncertainty in the U.S. and Europe. However, describes the company's 1H results as strong. Adds that concerns about budgetary pressures have kept investors from focusing on the company's structural growth outlook and strong cash generation. But "with the diminishing outperformance of the industrial cyclicals and with BAE trading on an estimated 2011 P/E of 7.3x, we think BAE shares are poised for a rebound," says brokerage. Has a buy rating. Shares -0.1% at 320p. ([email protected]) 0816 GMT [Dow Jones] Numis Securities downgrades United Business Media (UBM.LN) to hold from add. It notes the shares have had a strong recent run. However it lifts its target price to 600 pence from 572 pence following the group's interim results. It says the numbers are ahead of expectations, with exhibition businesses performing well. Shares -5% at 545 pence. ([email protected]) 0719 GMT [Dow Jones] Seymour Pierce downgrades Homeserve (HSV.LN) to hold from buy, with a target price of 2200p. The 1Q trading update is low in detail, although Homeserve indicated progress in the year to date is in line with its expectations. Seymour says it has no doubts about the quality of the Homeserve business model and it sees significant growth opportunities in Europe and the US, although the share price is now ahead of events. Shares -1.6% at 2265p. ([email protected]) 0704 GMT [Dow Jones] Arden Partners downgrades Homeserve (HSV.LN) to neutral from buy. Homeserve has been on the brokerage's conviction buy list, but following outperformance during which the shares exceeded Arden's target of 2250p, a neutral rating is warranted, says the brokerage. On the company's update, Arden says it is a simple message on rising policy numbers and high retention rates across the company's territories. Arden adds that the company's key trading period is in 2H. Shares -1.3% at 2272p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 30, 2010 09:33 ET (13:33 GMT)