Johnston Press PLC Share News (JPR)

US foods group Kraft will need to boost its offer to stand any chance of winning control of Cadbury, the world's second largest confectionery company in terms of sales, broker Charles Stanley reckons.'The Kraft offer values Cadbury on less than 2x sales, significantly lower than the 2.3x sales it paid for Danone's biscuit operations or the $23bn, 3.7x sales, paid by Mars for Wrigley (12x EV/EBITDA [enterprise value/earnings before interest, tax, depreciation and amortisation]). The approach also values Cadbury at 12x EV/EBITDA and 19x 2010 P/E, based on our estimates for next year,' Charles Stanley notes.The broker suggests that a cash offer north of 800p might persuade Cadbury shareholders to allow the iconic confectionery company to follow its peer Rowntree into foreign hands. Kraft's offer is valued at 745p per Cadbury share, made up of 300p cash and 0.2589 new Kraft shares.Broker Panmure Gordon also seems to think 800p is the magic number and has upgraded its price target to 800p from 645p. 'Kraft will come back with an improved offer, with a larger proportion of cash,' Panmure Gordon analyst Graham Jones predicts.The share price of local newspaper publisher Trinity Mirror has risen 248% since Singer Capital Markets advised its clients to buy the stock back in February, but the broker believes the shares are still worth buying as the publisher embarks on the next phase of its recovery.'Stabilising revenues and a clearer picture on cash generation/debt reduction should continue to drive TNI [Trinity Mirror] near term,' reckons Jonathan Barrett of Singer Capital Markets. The broker has lifted its price target from 92p to 218p.Recent results from sector peer Johnston Press allayed some fears about the health of the advertising market in regional newspapers while 'at the revenue level nationals [national daily newspapers] are trading better.'Singer reckons advertising revenues will start to grow 'or look like they will grow again' in the coming 12 months, prompting a sharp re-rating 'and we see scope to the 15x to 20x level implying a valuation of 444p to 592p per share.'Nomura Securities is changing the emphasis of its portfolio strategy, moving away from the traditional cyclical groups such as basic industries, consumer cyclicals and capital goods towards some of the recent laggards, such as telecoms, healthcare and utilities.According to Nomura's thinking the cyclicals require a 42% upgrade relative to other non-financial stocks to bring them back to normal levels. 'Comparisons based on dividend yield and EV [enterprise value] to capital employed also suggest that the cyclicals are pushing against the boundaries of the past 20 years of relative valuation,' Nomura analyst Ian Scott maintains.Nomura believes the telecoms, utilities, media and energy sectors look underpriced, especially in comparison with prevailing corporate bond yields. The broker specifically mentioned publisher Reed Elsevier and gas and electricity pipeline grid operator National Grid among its preferred UK stocks, while engineer Invensys and property firm Hammerson get the elbow.