UK MARKET TALK ROUNDUP: SHARES LOSING

26th Jul 2010 11:01

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] 1001 GMT [Dow Jones] Bank of America Merrill Lynch resumes coverage of Babcock International (BAB.LN) at underperform with a 580p price objective. Brokerage says the underperform rating is due to the increased operational and financial risk in the business following the VT Group (VTG.LN) acquisition, the full price paid for VT, and the impact of public sector budget cuts on the ability of the group to grow organically. Brokerage says it sees this deal as circa 10% EPS accretive in the second full year due to GBP50M synergy benefits, "but there is a risk this will be mitigated by top-line and margin pressures resulting from a slowdown in the public sector." Shares -3.4% at 588p. ([email protected]) 0912 GMT [Dow Jones] UBS cuts De La Rue (DLAR.LN) price target to 695p from 860p. Says the production issues at the company are serious and could affect De La Rue's reputation, making the stock one to avoid. Notes the company's weakening order book, as well as the fact margins are at a peak. UBS applies a lower multiple to the business to reflect its view that FY'10/'11 will prove peak or close to peak earnings. Keeps the stock at sell. Shares -0.8% at 769p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 26, 2010 06:01 ET (10:01 GMT)