Broker tips: Tullow, Sage, Morgan Crucible

8th May 2012 11:30

Credit Suisse has raised its target price for Tullow Oil after the company revealed this morning that it has found more oil at one of its exploration wells in Kenya."Another positive update on Ngamia-1 in Kenya. This is earlier than expected, and we like what we read," the broker said, adding that it also welcomes Tullow's intention to add more rig capacity to accelerate drilling in the region.The target price is lifted from 1,818p to 1,841p and an outperform rating is kept.Merchant Securities has maintained its hold rating and 300p target price for business software firm Sage Group ahead of its interim results tomorrow."Our figures represent only marginal EBIT growth, and the consensus forecast for a decline looks conservative," said analyst Roger Phillips.The broker says that "offsetting factors" in Wednesday's figures are likely to be from weakness in Europe, with France (accounting for around 36% of group revenue) being the real risk.In spite of the market's negative reaction to Morgan Crucible's trading update this morning, Jefferies has reiterated its buy rating and 365p target price for the industrial materials group."Today's update is 'in line' but not particularly upbeat (both as we anticipated). The regional, end markets and divisional trends were largely as expected, although the four-month performance to end April arguably a touch softer," said analyst Andy Douglas.Nevertheless, the broker still says the shares are cheap relative to the sector ("more so after being down c7% on Friday"). "Any share price weakness today should be considered a medium term buying opportunity," Douglas said.BC