UK MARKET TALK ROUNDUP: SHARES GAINING

2nd Aug 2010 12:33

Stocks on the rise in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 1133 GMT [Dow Jones] Morgan Stanley lowers Barratt Developments (BDEV.LN) target price to 180p from 230p. Says that near-term risks include an inflection in house prices, leading to write-downs, and the UK government's detailed spending review in October. "However, with the stock trading at just 0.5x tangible NAV and pricing in a very weak housing market outlook and a high risk of further asset impairments, there is value on offer for the patient investor, in our opinion," says brokerage. Keeps overweight rating. Shares +4.2% at 100p. ([email protected]) 1120 GMT [Dow Jones] Morgan Stanley raises United Business Media (UBM.LN) to 535p from 510p, following 1H earnings, which beat the brokerage's earnings forecast. Brokerage says that at the company's exhibitions division, the indicators are incrementally positive with forward bookings on the top 20 shows now up 12% against +3.5% in May and +5.9% a year ago. "The key Southeast Asian shows are performing well but UBM is also seeing stronger rebooking and attendee revenues in the UK and U.S.," adds brokerage. Says that its businesses Data Services and PRNewswire, are both solid with modest organic revenue growth partly offset by increased investment. Shares +2.5% at 564p. ([email protected]) 1107 GMT [Dow Jones] Bank of America Merrill Lynch raises St James's Place (STJ.LN) price target to 320p from 310p. Says the company's interim results come in well ahead of expectations, allowing the company to raise its dividend by 10%. Merrill Lynch increases its cashflow estimate for '12 by 8% to GBP71M. Estimates that free cashflow yield will increase to 11% from 3% by '15. Says for those with a long term view, assets under management growth and operational leverage should rapidly improve earnings and cashflow. Reiterates buy recommendation. Shares +1.8% at 281p. ([email protected]) 1044 GMT [Dow Jones] Investec raises United Business Media (UBM.LN) price target to 686p from 639p after a good set of 1H results, outperforming the brokerage's and consensus expectations. Says the outlook is reassuring but feels that management is overly cautious in terms of earnings implications for the full year. Lifts '10 EPS forecast to 50p from 46.8p and '11 to 55.2p from 51.8p. Retains buy recommendation. Shares +3.3% at 568p. ([email protected]) 1013 GMT [Dow Jones] UBS decreases Anglo American (AAL.LN) target to 2840p from 2930p. Is disappointed by another capital increase and the delay at Minas Rio. Says while the delay was largely anticipated, the magnitude of the capital increase will likely come as a surprise. Says these relate to delays in receiving critical licences required for construction of the plant. Says Anglo has guided to an additional $180M capex for every three month delay, and UBS is incorporating a 12 month delay in its modeling. Keeps buy recommendation. Shares +3.8% at 2620p. ([email protected]) 0952 GMT [Dow Jones] UBS raises Rolls-Royce Group (RR.LN) price target to 500p from 400p after a good set of 1H results, coming in at the upper end of consensus expectations. Says a very strong performance at marine in both sales growth and margins offset a weak margin performance in civil aerospace, its core earnings driver. Maintains sell recommendation given its weak cash flow profile, added accounting issues and its premium valuation. Says Rolls trades at a significant 30% premium to its close sector peers. Shares +1.1% at 586.5p. ([email protected]) 0950 GMT [Dow Jones] HSBC Holdings (HBC) beat expectations on lower provisions for the first half of the year, says Citigroup. Adds investment banking also better-than-expected, driven by trading income and lower impairments. Pretax profit from Hong Kong also ahead of consensus. Keeps stock at hold with 700p target. Shares +5.2% at 680p. ([email protected]) 0933 GMT [Dow Jones] Improved impairments on bad loans offsets slightly weaker revenue in HSBC Holdings' (HBC) 1H results, says Oriel Securities. It says profit figures met consensus estimates, as drops in both trading income and net interest income were balanced against impairments' sharp fall to $7.5Bln from $13.Bln in the first half of 2009. Oriel keeps add rating. Stock +4.3% at 674p. ([email protected]) 0917 GMT [Dow Jones] HSBC (HBC) shares +3.4% at 668p, shooting higher Monday following the company's 1H earnings, which show net profit doubled on lower impairment charges. "Today's numbers underline the overall strength of the bank, whilst the dramatic reduction in the loan impairment provision is an additional bonus," says Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. Adds the shares have recently struggled, but these earnings may render the company worthy of a revisit for many investors. "The general market view of the shares as a buy seems to have been vindicated today," says Hunter. ([email protected]) 0912 GMT [Dow Jones] HSBC's (HBC) 1H results are positive, says Execution Noble analyst Joseph Dickerson, but the increase in costs should be taken with caution. Adds while investment banking profits are down, HSBC still did better than its peers in U.S. and Europe. Shares +3.2% at 667p. ([email protected]) 0858 GMT [Dow Jones] Deutsche Bank cuts National Grid (NG.LN) target to 620p from 815p following the completion of its rights issue. Sees 20% upside. Says the completion of the issue leaves National Grid with an attractive yield and the funds to accelerate growth of its UK energy network. Says the 7.7% prospective '12E dividend yield looks sustainable and is one third higher than the sector average. Keeps buy recommendation. Shares are +1.6% at 517p. ([email protected]) 0816 GMT [Dow Jones] JPMorgan Cazenove starts coverage of Jupiter Fund Management (JUP.LN) at overweight. Thinks Jupiter has considerable scope for future, highly profitable growth in assets under management (AUM). Says the company has the scope to leverage its investment performance and brand into new products, new distribution segments and geographies. Suggests the operating platform could cope with twice the current level of AUM with only modest additions to the fixed cost base. Says the shares can have a premium valuation over time, to reflect the company's attractive competitive position and growth potential. Shares are +0.7% at 194p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires August 02, 2010 07:33 ET (11:33 GMT)