Broker tips: Focusrite, WS Atkins, Just Eat

(ShareCast News) - Inspired by watching a documentary about helmet-wearing French electronic music duo Daft Punk, Panmure Gordon analyst George O'Connor issued a 'buy' recommendation on music technology group Focusrite. Panmure's price target for the AIM-listed company, whose ticker code is TUNE, was held at 217p, which offers more than 40% upside on Monday's closing price.Focusrite, which supplies hardware and software products used by professional and amateur musicians around the world, is well positioned in the electronic dance music (EDM) market, which has recently been the fastest-growing segment of the music industry, with Novation has been Focusrite's fastest growing division.Novation is an electronic instrument manufacturer, with the brand focused on allowing customers to make electronic music using synthesisers and computer-enabled technology.Although he issued a disclaimer that "I wear a cardigan", O'Connor walked though the rise and rise of Daft Punk based on their fusion of "elements of house music with funk, techno, disco, rock, and synthpop", climaxing with their 2013 huge global hit 'Get Lucky'.Also citing the 1977 collaboration on 'I Feel Love' between producer Giorgio Moroder and Donna Summer, and namechecking the Chemical Brothers, David Guetta and Calvin Harris, O'Connor said the BBC documentary noted that tools for EDM production include a computer, MIDI keyboard and mixer/sound recorder, with technology having heralded a "democratisation of music" via the bedroom music studio, and that it accelerated the process of "making music easy to make" both of which are mantras of Focusrite.Last year Novation grew sales 22.7% to £14.2m but, said O'Connor, getting down to business, Focusrite's current share price "does not reflect the opportunity: Focusrite offers a unique investment proposition".He noted that the shares have weakened in the general market pullback and the Daft Punk documentary was a reminder that now was a good time to revisit the investment case, given the current attractive discount to the global peer group, that is a price/earnings ratio of 18.6 times versus the sector's 12.8. RBC Capital Markets has upgraded WS Atkins from 'sector perform' to 'outperform' on its medium-term outlook, but reduced its target price from 1,550p to 1,400p.In a note released on Tuesday, the investment bank said current trading is mixed for the FTSE 250 design, engineering and project management consultancy company."We have brought our 2017E forecasts down by 7% to reflect a tougher Middle East segment given the roll-off of some projects and the potential impact of the lower oil price along with some caution on the Oil & Gas segment."Conversely, trading in the UK is relatively stable and whilst the US market is currently flat, we expect a better H2 given contract wins and would expect some improvement post election."It noted that WS Atkins is well-positioned for the medium-term."We continue to believe that the company is well placed medium-term given its strong market positions and reputation in key markets where investment in infrastructure is likely to grow."RBC Capital Markets said while it isn't a fan of the acquisition of the Projects, Products and Technology (PP&T) segment of international nuclear engineering business EnergySolutions, it appeared to make strategic sense."The deal creates a global platform and accelerates the group's position in a key growth market." Just Eat's shares rose on Tuesday after Investec initiated its coverage of the stock with a 'buy' rating.Investec said the online take-away food ordering company is comparatively valued to platform peers, such as Rightmove, on enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA), despite offering "much higher growth"."Recent market weakness provides a good entry point to acquire what we believe is an industry-leading and highly cash generative growth company," said Investec analyst Alex Paterson."Whilst competition is intensifying, particularly at the premium end of the market, we believe barriers to both entry and switching in the mass market are high."Paterson said Just Eat offers an estimated 22.9% revenue compound annual growth rate (CAGR) from 2015 to 2020 and around 32.3% EBITDA CAGR as margins rise through operational maturity.The company's recent acquisitions should boost scale and accelerate breakeven in countries outside of the UK, Denmark and Australia, Paterson added."The group remains focused on being a mass market online marketplace and has avoided direct ownership of capital and labour intensive delivery arms in its main markets," the analyst said."We believe concerns over rising competition are exaggerated as new entrants are predominantly targeting the premium end of the market and charging unsustainably high fees, whether through commission, delivery charges, or both, which are only affordable for a small percentage of the population."Investec issued a discounted cash flow target price of 435p.