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UK MARKET TALK ROUNDUP: BROKERS COMMENTS

Mon, 19th Jul 2010 07:28

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 0628 GMT [Dow Jones] HSBC initiates coverage of UK bus and rail stocks with National Express (NEX.LN) at overweight, 275p target; FirstGroup (FGP.LN) and Go-Ahead Group (GOG.LN) at neutral with 360p and 1110p targets respectively; and Stagecoach (SGC.LN) at underweight with 175p target. The sector faces a mixed outlook, says HSBC. It says rail passenger revenue trends are improving but the outlook for bus is more difficult. It notes the bus industry is heavily funded by the government and expects these subsidies to come under threat. On Friday, National Express shares closed at 235p, FirstGroup at 371.7p, Go-Ahead at 1129p and Stagecoach at 182.3p.(andrea.tryphonides@dowjones.com) 0616 GMT [Dow Jones] UBS upgrades PayPoint (PAY.LN) to buy from neutral and lifts the price target 410p from 275p after the National Lottery Commission provisionally denied Camelot the permission to branch out into bill payments and mobile top-ups. That would have been a substantial threat to PayPoint and has been a major overhang on its shares. A final decision from the NLC is expected September 3. Meanwhile, PayPoint's valuation is undemanding says UBS, but investors are questioning the diversification of its business model. These concerns are likely to overhang the shares the near-to-medium-term. Shares closed Friday at 350p. (andrea.tryphonides@dowjones.com) 0610 GMT [Dow Jones] Citigroup raises Pearson (PSON.LN) target price to 1100p from 1070p, citing better long-term growth prospects and a cheap valuation. Still, cuts 2011-2012 EPS estimates by around 6%, reflecting the disposal of Interactive Data Corporation. Says M&A is likely to enhance growth/returns. "Encouragingly, Pearson's track record in this area has been strong and our review of potential targets leads us to believe that, all-in, portfolio realignment will be accretive to growth/returns," it says. Keeps a buy rating. Shares closed at 925p. (ishaq.siddiqi@dowjones.com) Contact us in London. +44-20-7842-9288 Markettalk.eu@dowjones.com (END) Dow Jones Newswires July 19, 2010 02:28 ET (06:28 GMT)
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Tuesday 2 August 
Caffyns PLCAGM
Syncona LtdAGM
Tanfield Group PLCAGM
Wednesday 3 August 
Block Energy PLCAGM
Molten Ventures PLCAGM
Cambium Global Timberland LtdGM re wind-up
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Investec PLC and LtdAGM
STM Group PLCAGM
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JPMorgan Global Core Real Assets LtdAGM
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