BON.L Share News (BON)

(ShareCast News) - Petrofac got a boost on Wednesday as Goldman Sachs upgraded the stock to 'buy' from 'neutral' and lifted the price target to 1,066p from 912p.It said the upgrade was driven by Petrofac's geographic exposure, which is predominantly geared to the Middle East and by the current backlog for 2017, which stands at 87%. In addition, it pointed to scope for additional contract awards driven by the Middle East.The bank also highlighted the potential for free cash flow improvement from 2017. GS said it expects capex to start falling from 2017, which would lead to a FCF yield of about 10%/14% in 2017/18."Given the low level of contracts awards year-to-date, we believe that any meaningful contract (over $500mn) is likely to be taken positively by the market, particularly as one of the key areas on which investors focus for E&C companies is contract awards.""Petrofac management has mentioned that it will focus on reducing its capital intensity as well as investments within the Integrated Energy Services segment: should the company succeed in doing so, and at the same time reduce its net debt, this is also likely to be taken positively."Goldman Sachs said key downside risks include a low level of contract awards, execution problems on projects leading to lower margins than anticipated, and deteriorating levels of net debt. Clothing retailer Bonmarche shares was under the cosh on Wednesday after Canaccord Genuity cut its rating to 'hold' from 'buy' and lowered its target price to 90p from 160p.The company last week issued a profit warning after reporting poor sales of its autumn range in September due to recent hot weather. Bonmarche said its full year profit before tax is likely to fall within a range between £5m & £7m. It also expects first half like-for-like (LFL) sales will drop 8%."Given the volatile trading conditions and potential wider-scale clothing sector discounting to monetise excess inventory, we have erred towards the conservative end of this guidance," Canaccord said."Management has a good track record on managing operating costs in relation to top line evolution, but the severity of first half's LFL declines cannot be fully mitigated by such measures."Canaccord added that the company's shares could be helped by a return to more seasonal weather patterns and a favourable reaction to new chief executive Helen Connolly's plans when laid out eventually.The broker said the new profit before tax guidance is a "major disappointment" even if driven primarily by weather."With trading volatile, and in the absence of the new CEO's plans, we believe it prudent to assume a modest rate of pre-tax profit recovery going forward."On any further reduction to our fiscal year 2017 EBITDA forecast we would potentially be forecasting a technical breach of the sole covenant on the undrawn revolving credit facility, which on our revised forecasts remains just above the minimum 1.5:1 adjusted EBITDAR to net finance charges ratio." ICAP shares dropped on Wednesday as Citigroup downgraded the stock to 'neutral' from 'buy' and slashed the target price to 490p from 530p.The broker is set to be renamed NEX Group Plc once it sells its global broking business to Tullett Prebon Plc for £1.1bn."NEX Group is going to be a capital-lite, cash-generative entity with lower ongoing regulatory capital requirements," Citi said."This, we think, will enable it to maintain good operating cash flow conversion levels and to pay a sustainable dividend policy of around 60% for fiscal year 2018 and beyond."For 2017, Citi believes the company can maintain its 22p DPS, based on the current business mix and the cash on its balance sheet that will remain after the disposal.Citi also lowered its average daily volume foreign exchange (FX) estimates for its FX business EBS, which account for 50% of NEX's earnings.Citi added that it acknowledges US elections in November and a possible US rate hike in December will be catalysts for heightened FX volatility."However, notwithstanding this, we believe consensus expectations for full year 2017 EBS revenues are too high."