Broker tips: Booker, Rightmove, Stobart

21st Aug 2009 13:22

Booker hosted an investors event Thursday where it highlighted improvements in its Cash & carry offering. Singer Capital Markets, already a fan of the stock, was suitably impressed.Refits of Booker outlets are being done at a rate of around 30 a year and typically are paying back the cost of the improvements in 12 months. 'Sales uplifts are adding c0.75% to LFL [like-for-like] sales currently, as well as supporting a better margin mix. Plans to grow the Delivered side of the business are also compelling,' Singer said.Although the shares are up 40% over the last year Singer believes there is more juice to be squeezed out of the share price. The debt situation is improving and, notwithstanding the possibility of acquisition activity, Booker should be able to pay down its remaining debt with in the next two years.Panmure Gordon has raised its price target on property web site Rightmove after the company's strong interim results.Panmure Gordon said Rightmove's first-half results were 'materially better than expected,' with the company now on track to achieve 2009 earnings before interest and tax not far short of 2008's levels, despite the continuing slump in the housing market. This is an implicit upgrade of around 15% to 20% on prior expectations, Panmure Gordon's Alex DeGroote reckons.In response to the figures the broker has upgraded its earnings per share forecasts for the current year by 10% and for 2010 by 15%.Panmure Gordon has reiterated its 'buy' recommendation and lifted its price target from 450p to 600p. 'RMV [Rightmove] has easily the most attractive operating model we have ever seen, and we are in the early stages of a powerful upgrade cycle,' DeGroote concluded. Charles Stanley is encouraging its clients to get on the Stobart bandwagon after the trucking firm's trading update on Friday morning.'In a period of consolidation, the group continues to make significant progress. The core business continues to secure new contracts. The group has made progress in its port and airport developments and the focus remains on new business (like the new rail venture) and the integration of the prior acquisitions,' said Charles Stanley analyst Peter Ashworth.The broker is forecasting a profit before tax of £28.2m for the current fiscal year, which runs to the end of February. Second half performance should be solid on the back of recent contract wins, additional new business and action taken to reduce costs.Charles Stanley rates the shares a 'buy' and has a price target of 150p.