UK MARKET TALK ROUNDUP: SHARES LOSING

21st Jul 2010 14:19

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] 1319 GMT [Dow Jones] Evolution Securities downgrades Drax (DRX.LN) to neutral from add, noting sagging UK gas prices. Says: "There are two current supports to the Drax share price: a vague bid rumor, but we have difficulty in seeing who would bid; and robust earnings in 2010 and 2011 due to forward hedging." Nevertheless, Evo anticipates the share price will slump. Has 410p target price on the stock. Shares -2.3% at 369p. ([email protected]) 1146 GMT [Dow Jones] Royal Bank of Scotland cuts Cable & Wireless Worldwide (CW.LN) price target to 105p from 115p following the company's profit warning. "Confidence has been shaken and catalysts are likely to be limited ahead of November interims," RBS says. However the brokerage doesn't believe the profit warning fundamentally changes the company's margin and market-share expansion opportunity. Keeps the stock at buy. Shares -2.2% at 68p. ([email protected]) 0929 GMT [Dow Jones] Panmure Gordon downgrades De La Rue (DLAR.LN) to sell from hold and cuts its target price to 661p from 983p, citing the company's profit warning following production problems at the banknote paper operation. With some output failing to meet quality specifications, production & shipment has been suspended and sales/profits will now be 'materially lower than planned,' says De La Rue, "While the full financial impact remains unclear, the reputational damage & knock-on effect of this should not be underestimated," says Panmure. Shares -3.6% at 749p. ([email protected]) 0919 GMT [Dow Jones] Oriel Securities initiates coverage of Ocado at sell. It reckons when the final details of pricing, etc, are revealed, the resulting valuation will not discount anywhere near enough of Oriel's concerns. "A probable valuation of around 16x November 2012 EV/ebitda [pre-start up costs] seems nothing other than highly-stretched. 10x would be our idea of fair value." Oriel notes a number of concerns, including the fact that the company's 'non-compete' clause with Waitrose within the M25 area ends in less than a year. Also, competition in web-based retailing in London is increasing, says Oriel. Shares trade at 157p against the IPO price at 180p/share. Unconditional dealing starts Monday. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 21, 2010 09:19 ET (13:19 GMT)