UK MARKET TALK ROUNDUP: BROKERS COMMENTS

14th Jul 2010 08:08

Broker comments in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 0708 GMT [Dow Jones] Seymour Pierce upgrades JD Wetherspoon (JDW.LN) to hold from sell following the company's trading update. Notes the group has returned to a like-for-like sales growth trend. Says in recent days the stock has risen in anticipation of a positive pre-close statement and the market seems to have been proved right on this. Adds that so far, most pub groups have been reporting positive LFL trading trends in 2Q '10. Notes the shares have fallen from over 540p to closer to 400p. "Long term we are fans of the business model (it has the highest returns of the sector)." Has 450p price target. Shares -1.8% at 430p. ([email protected]) 0700 GMT [Dow Jones] ASOS's (ASC.LN) 1Q trading update is good, but fully factored into the current share price and slightly weaker than the first nine-week trend, says Seymour Pierce. Overall, the UK figures were in line with expectations, while international sales are still tracking ahead of projections, the brokerage says. Retains hold recommendation on the stock but continues to advise investors to take profits at these levels. Notes the stock has had a phenomenal run up by over 60% over the last quarter. Adds that the complexities of developing the business overseas have not been fully factored into the share price. Shares closed Tuesday at 896p. ([email protected]) 0659 GMT [Dow Jones] London Stock Exchange's (LSE.LN) revenues in the company's interim management statement come in above consensus expectations, says Shore Capital, despite a GBP2.3M negative impact from currency effects. Also, total income is reported at GBP166M against a consensus forecast of GBP162.5M and Shore's forecast of GBP160.2M, mainly due to higher than expected net interest income. Shore says these appear to be resilient results and it sees no reason to change its forecasts for the year. Reiterates buy recommendation. Shares closed on Tuesday at 604.5p. ([email protected]) 0655 GMT [Dow Jones] JD Wetherspoon's (JDW.LN) trading update is better than expected, says Shore Capital. Like-for-like sales are up 1% in 4Q from 0.8% the previous quarter and ahead of the brokerage's expectations of broadly flat. Shore retains its 2010 pretax profit estimate of GBP71.3M and EPS estimate of 34.9p. "The outlook statement is also encouraging highlighting resilient sales, strong performance from new openings and substantial opportunities to acquire sites." Reiterates buy rating on the stock. Shares closed Tuesday at 438p.([email protected]) 0655 GMT [Dow Jones] Mitie Group's (MTO.LN) interim management statement confirms trading is in line with expectations says KBC Peel Hunt. The brokerage continues to look for March '11 pretax profit forecast of GBP105.9M and '12 of GBP114.9M. it expects cash generation to remain strong, with March '11 net debt of GBP64.0M, which is well within the facilities of GBP230M to January '12. KBC Peel says the outlook is reasonably robust but notes the public sector uncertainty ahead. The shares look up with events, it adds. Keeps at hold with a 240p price target. Shares closed on Tuesday at 214.9p. ([email protected]) 0653 GMT [Dow Jones] ICAP's (IAP.LN) interim management statement confirms the company has had a good start to the year with revenues up 8% and profits up by 5% in the three months to June 30 period, says Shore Capital. It notes however that volumes slowed in June as risk appetite receded. Retains hold recommendation. Shares closed on Tuesday at 436.2p. ([email protected]) 0651 GMT [Dow Jones] Barratt Developments' (BDEV.LN) FY results are broadly in line with expectations, says Shore Capital. Notes debt has fallen to GBP375M, but says this largely reflects deferred land payments. Maintains sell recommendation on the stock. Shares closed Tuesday at 105p. ([email protected]) 0650 GMT [Dow Jones] London Stock Exchange (LSE.LN) beats consensus estimates by 2.15% with GBP166M in first fiscal quarter income. And "most importantly, the LSE is beating expectations in post-trade services - an area the LSE has singled out for growth," says Arden Partners analyst Sarah Spikes. Spikes says June figures give confidence that the LSE is regaining market share. She keeps a buy rating and 1000p target. Shares closed Tuesday at 605p. ([email protected]) 0645 GMT [Dow Jones] Ashmore Group's (ASHM.LN) 4Q interim management statement shows assets under management ahead of expectations says KBC Peel Hunt. Says this is driven by inflows of $2.9Bln, well ahead of the $0.7Bln the brokerage was expecting. Says the performance fees for the year are estimated to be GBP82.9M, compared to the GBP57M KBC was looking for, as a result of strong fund performance. Expects the shares to react positively to the statement. Shares closed Tuesday at 264p. KBC has the stock at buy with a 305p price target. ([email protected]) 0640 GMT [Dow Jones] JD Wetherspoon's (JDW.LN) 4Q sales show improvement on the previous quarter says Investec. Breakfast openings and good weather are believed to be the main factors behind this. The company is on track to deliver on full-year estimates, says Investec. However it's concerned that a number of brokerages continue to forecast a substantial pick-up in profits next year. Investec says this is in contrast with management's commentary and there is a risk of disappointment. Notwithstanding this, Investec says Wetherspoon appears on track to meet the brokerage's expectations. Buy rating, 590p target. Shares closed Tuesday at 437.7p.([email protected]) 0638 GMT [Dow Jones] Goldman Sachs upgrades JD Wetherspoon (JDW.LN) to neutral from sell, saying the risk-reward is now more balanced. Notes the share price has traded down and is now in line with the brokerage's 6-month price target of 410p. "We believe JD Wetherspoon's value price points and planned estate growth leave it well positioned in a subsector in which we expect limited growth over the next year." However, continues to see greater potential upside elsewhere in its transport, travel and leisure coverage. Shares closed Tuesday at 438p. ([email protected]) 0635 GMT [Dow Jones] Royal Bank of Scotland initiates coverage of Thomas Cook Group (TCG.LN) at buy with 270p price target. Says the stock has underperformed significantly this year on concerns over summer trading and future growth prospects. Says: "We believe market concerns about the death of the package holiday are overdone." But the brokerage thinks the business has performed exceptionally well in very tricky markets and is well placed for the future. Says Thomas Cook is still reducing costs, in particular in airline and accommodation procurement, where it has restructured and increased its in-resort resources. Shares closed Tuesday at 198p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires July 14, 2010 03:08 ET (07:08 GMT)