BP Share News (BP.)

Broker comments in the UK today. Compiled by Dow Jones Newswires Markets Desk, markets.eu@dowjones.com Contact us in London. +44-20-7842-9464 Markettalk.eu@dowjones.com 1238 GMT [Dow Jones] BP (BP) could book a $25 billion provision to cover the cost of the oil spill in the Gulf of Mexico in its 2Q results Tuesday, pushing the company to a $13 billion loss, says Barclays Capital. Excluding spill costs, BP should put in a robust operation performance with earnings of almost $5 billion, it says. The total cost of the spill could reach $37 billion, it adds. Gives underweight rating, 430p target. Shares +2.2% at 407p. (james.herron@dowjones.com) 1056 GMT [Dow Jones] Ambrian analyst Mike Ward says he retains a buy on GlaxoSmithKline (GSK) after 2Q results showed benefits of an increasingly diversified business whose strong pipeline has delivered a further five Phase III candidates. Says drug maker "is gradually returning to growth after a period of high generic sales attrition, which is now almost over ... GSK combines improving growth prospects with high yield." Shares -2.2% at 1161p. (Sten.Stovall@DowJones.com) 1002 GMT [Dow Jones] Collins Stewart initiates coverage of online gaming stocks. Says despite periodic regulatory shocks, online gaming markets have continued to deliver strong growth, increasing their share of the global gaming market. Projects double-digit market growth over the next three years in global online gambling. "Overall, we believe that online gaming is a significant medium-term growth opportunity, overlaid with short-term risk - but for most, the risk appears to be priced in." Starts Playtech (PTEC.LN) and Sportingbet (SBP.LN) at buy with 552p and 71p price targets, respectively. Also initiates coverage of PartyGaming (PRTY.LN) at buy, with 265p price target. Starts 888 Holdings (888.LN) at sell, with 41p price target. (michele.maatouk@dowjones.com) 0945 GMT [Dow Jones] Goldman Sachs raises Vodafone Group (VOD.LN) to 160p from 155p, after the company "reported slightly better than expected 1Q FY11 revenues." Goldman has a neutral rating on the stock and continues to believe that the stock's recent outperformance (driven mostly by multiple expansion rather than earnings momentum) has fully reflected the group's return to revenue stability. "We see the potential for modest incremental upside from a variety of corporate catalysts, including payment of dividends from Verizon Wireless and a variety of possible asset sales (likely to begin before year-end), which if used to buy back stock would be highly accretive," adds Goldman. Shares +0.5% at 151p. (ishaq.siddiqi@dowjones.com) 0943 GMT [Dow Jones] Altium Securities downgrades SDL (SDL.LN) to hold from buy following the stock's 24% outperformance over the last three months. Remains convinced of the medium-term attractions of the market, but in the absence of further upgrades believes the stock is fairly valued. "One note of caution is with regard to the recent strengthening of the pound against the dollar and euro, which if it continues will provide a headwind to both revenues and profits." Has 525p price target on the stock. Shares +1.3% at 552p. (michele.maatouk@dowjones.com) 0925 GMT [Dow Jones] Nomura nudges up Vodafone (VOD.LN) price target to 168p from 165p to reflect the positive CFC tax settlement. Notes the company's emerging market and US exposure have been a source of earnings upgrades rather than earnings risk this quarter, helping to offset the FX headwinds. However, says the outlook in Europe - the region most important for sentiment and where Vodafone's performance is below par - is clouded by an increasing sector-wide focus on market share, which is likely to intensify competition in Vodafone's main European markets. Keeps the stock at neutral. Shares +0.3% at 151p. (michele.maatouk@dowjones.com) 0852 GMT [Dow Jones] The scale of the disaster in the Gulf of Mexico has always indicated that significant management changes at BP (BP) were unavoidable, says Westhouse Securities. "We now expect Tony Hayward's tenure at the group to continue for very limited time," it adds. For now, BP is only saying that at present Hayward has the full backing of the board - although this could change at the board meeting later Monday, says Panmure Gordon. "This would be bad news for BP given that Tony Hayward was doing a good job that was only marred by the tragedy in the Gulf of Mexico," Panmure says. The market now awaits BP's 2Q earnings, due July 27, for further details. BP shares +1.7% at 405p. (ishaq.siddiqi@dowjones.com) 0804 GMT [Dow Jones] Evolution Securities cuts Cairn Energy (CNE.LN) to neutral from buy following a run up in the company's shares of 15% in the last three months. "The shares though are now trading 14% above our target price based on the core plus risked upside," it says. "While an outright sell is not merited on the basis of the unrisked upside potential in Greenland we believe it prudent to stop buying the shares at the current level ahead of any drilling news." Cairn has started drilling its first exploration wells this summer in Greenland, which is seen as a high risk, but high opportunity area. Gives a 417p target. Shares flat at 473p. (james.herron@dowjones.com) Contact us in London. +44-20-7842-9464Markettalk.eu@dowjones.com 0749 GMT [Dow Jones] Adjusted EPS consensus for Pearson's (PSON.LN) 2010 EPS should settle around 71-72p if management is comfortable with guiding toward 70p at this stage of the year, RBS analyst Paul Gooden says. It follows "strong" 1H results, with adjusted EPS of 16.6p, well ahead of Gooden's 8.1p forecast. But bears will remain concerned about Pearson being countercyclical with risk that progress could slow as economies stabilize, says Gooden. On the M&A front, Pearson paid 5.5x sales to expand in Latin America last week and the shares trade at a material premium to peers, Gooden notes. Hold rating, 865p target. Shares +3.1% at 1003p. (lilly.vitorovich@dowjones.com) 0746 GMT [Dow Jones] The European bank stress tests should have been tougher, says Evolution Securities, and the whole exercise lacks credibility. "We don't see the Tests as a strong positive catalyst for equity investors, although we do expect them to help in the gradual normalisation process of funding markets," says Evolution. Says it becomes increasingly selective on the banking sector, as the average upside (22%) is now more limited. Says Santander (STD) remains its core conviction buy, with Lloyds Banking Group (LYG), BNP Paribas (BNP.FR), and Standard Chartered (STAN.LN) core buys. Replaces ING (INGA.AE) and Ageas (AGS.BT) with BBVA (BBV) and RBS (RBS.LN) as core buys. Says National Bank of Greece (NBG) and Banco Popolare (BP.MI) got the lowest results in its universe, and remain core sells. (peter.nurse@dowjones.com) 0702 GMT [Dow Jones] Reckitt Benckiser (RB.LB) 2Q "slightly ahead" of Shore Capital's forecast, says analyst Darren Shirley. Says the core business has modestly outperformed, driven by emerging markets. Europe is still suffering from increased competition, particularly from Proctor & Gamble (PG). See no change to full-year forecasts and reiterates buy stance. Shares -0.5% at 3320p. (michael.carolan@dowjones.com) 0655 GMT [Dow Jones] Bank of America Merrill Lynch raises Capita Group (CPI.LN) to buy from neutral. "We expect Capita to win more big ticket contracts over the next 12 months which, coupled with less run-off, should drive an improvement in organic growth over 2011/12," says brokerage. Adds that Capita is a high quality name, with strong market positions, management and cash flow returns. Has a 820p price objective. Shares closed at 739p. (ishaq.siddiqi@dowjones.com) Contact us in London. +44-20-7842-9288 Markettalk.eu@dowjones.com (END) Dow Jones Newswires July 26, 2010 08:38 ET (12:38 GMT)