UK MARKET TALK ROUNDUP: SHARES LOSING

29th Jun 2010 10:40

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] 0940 GMT [Dow Jones] HSBC cuts JD Wetherspoon (JDW.LN) price target to 455p from 550p, noting concern over the impact of rising VAT and duty costs next year. Cuts '11 pretax profit forecast by 5.5% to GBP70.9M and says this is 8.2% below consensus. Still, HSBC reckons extended opening hours, weak comparatives and relatively benign cost inflation should mitigate some of the pressures. Keeps the stock at neutral. Shares -0.7% at 399p. ([email protected]) 0848 GMT [Dow Jones] Serco Group's (SRP.LN) trading update confirms the group continued to trade strongly in 1H and is on track not only to meet guidance for the FY, but also its longer-term guidance on margins for '12. Says: "We rate management highly and believe that Serco is very well placed to benefit from outsourcing contracts resulting from the deficit reduction program in the UK." Regards Serco as a high quality holding in the sector and reiterates buy rating on the stock. Has 695p price target. Shares -2.3% at 609p. ([email protected]) 0843 GMT [Dow Jones] Carpetright's (CPR.LN) FY '10 pretax profit is in line with expectations, but company margins have come under greater pressure than anticipated and the dividend fell short of market forecasts, says Investec Securities. Adds: "With margin pressures likely to persist and earnings visibility remaining low, we place our forecasts under review and remain sellers of the stock." Puts 470p price target under review. Shares -9.7% at 641p. ([email protected]) 0751 GMT [Dow Jones] Royal Bank of Scotland lifts Senior (SNR.LN) target to 140p from 128p. Says the trading update is robust, indicating that 1H '10 profits will be in line with management's expectations. Says the company's cash flow has also been strong and despite a GBP8M-GBP10M currency impact, it expects debt at end-June '10 to be below FY '09 debt of GBP102.3M. Thinks further upgrades could be on the cards later in the year. Thinks current weakness in the share price represents a buying opportunity. Keeps at buy. Shares -0.9% at 125p. ([email protected]) 0726 GMT [Dow Jones] National Express (NEX.LN) trading update is "reasonably encouraging, with no signs of reversals," says Gerald Khoo, analyst at Arbuthnot Securities. Says trading is "particularly encouraging in North America given the challenging fiscal environment faced by the group's school board customers." Khoo adds he expects the majority of margin improvements in UK bus and North America to fall in 2011 and 2012. Says revenue in Spain is better than his forecasts but the key summer period is still ahead. Has 220p target price and neutral rating. Shares -0.2% at 227p. ([email protected]) 0720 GMT [Dow Jones] Carpetright's (CPR.LN) preliminary results show a 64% increase in pretax profit, indicating an expansion in its share of the UK market, says Shore Capital. Brokerage says the market share gain is helped by the rolling up of Allied Carpets and the development of its house building and insurance contract revenues. Notes the management appears to be cautious in their outlook as the FY dividend comes in below consensus expectations, at 16p vs an expectation of 20p. However, brokerage thinks the company will emerge from the downturn in a stronger position. Keeps at hold. Shares -5.3% at 672p. ([email protected]) 0708 GMT [Dow Jones] National Express (NEX.LN) has announced its trading update for the period to the end of June, says Shore Capital, with trading in line with management's expectations. Says revenue trends have remained resilient, whilst cost savings programs and operational focus have accelerated in the period. Keeps hold rating. Says the group has successfully issued a new GBP225M 10-year bond, and secured a new GBP50M new bank facility, but the current levels leave limited scope for disappointment on margin recovery in UK bus and North America, with the upside already factored into the valuation. Shares -1% at 225p. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 29, 2010 05:40 ET (09:40 GMT)