UK MARKET TALK ROUNDUP: SHARES LOSING

27th Jul 2010 17:20

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] 1620 GMT [Dow Jones] S&P Equity Research downgrades Rolls-Royce Group (RR.LN) to sell from hold and cuts the price target to 580p from 600p ahead of the 1H results. Says FY '10 "will not be plain sailing" and finds the shares already well supported. With the first outcomes of the UK Strategic Defence and Security review unlikely until at least Q4, the brokerage sees few positive short-term catalysts for the share price. Adds that airspace disruptions and the lower aircraft utilization rate in 1H will potentially weigh on service revenue streams, while it is also disappointed by the flow of orders from the Farnborough air show. Shares closed -1.6% at 593p, Tuesday. ([email protected]) 1228 GMT [Dow Jones] Panmure Gordon cuts ARM Holdings (ARM.LN) to sell from hold following 2Q results. Says the company has given another strong set of results and could help drive continued momentum in the stock, "which currently can do no wrong." However, Panmure continues to believe that "the long-term prospects for ARM are more than valued in at current levels." Brokerage retains 275p target price. Shares -3.2% at 336p. ([email protected]) 1110 GMT [Dow Jones] Halfords' (HFD.LN) 1Q update shows the company remains on track to deliver FY '11 earnings in line with previous guidance, Investec Securities says. Says 1Q like-for-like sales were in line with the brokerage's expectations given adverse weather and World Cup effects. "With gross margin flat, operating costs under tight control, and benefits accruing from other initiatives and closure of Central Europe, the full-year outturn looks well underpinned at this early stage." Has buy rating and 545p price target on the stock. Shares -2.4% at 504p. ([email protected]) 1016 GMT [Dow Jones] Collins Stewart downgrades Provident Financial (PFG.LN) to sell from hold, as the share are trading above CS's 800p price target. The 1H '10 results read positively, the group is well funded and it is able to honor its commitment to pay a 25.4p interim dividend, says CS. It warns though that the government's austerity program may hit forecasts. It fears management may reduce Home Credit lending in 2H '10 and market forecasts may prove to be too high. Shares are -4.4% at 844p. ([email protected]) 0945 GMT [Dow Jones] Goldman Sachs increases Anglo American (AAL.LN) price target to 4480p from 4085p, reflecting the substantial increase in the brokerage's platinum group metal (PGM) price forecasts for FY '11-'14. Given this, Goldman's expectations for the earnings stream from Anglo Platinum in the Anglo American group also increase, driving higher cashflows and a faster reduction in net debt over '10-'13E. Keeps Anglo American at buy. Shares are -0.3% at 2531p. ([email protected]) 0750 GMT [Dow Jones] HSBC downgrades Rentokil Initial (RTO.LN) to underweight from neutral and cuts target price to 90p from 110p. "We are concerned about weak contract retention rates in recent quarters, in spite of management's focus on service levels." Also sees a risk that 'ad hoc' spot business declines during the recovery will offset some benefits from cost savings. Shares -1% at 108p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 27, 2010 12:20 ET (16:20 GMT)