Broker tips: Micro Focus, Imagination Tech, WS Atkins

While Singer expects revenue in the current year for Micro Focus to be slightly lower than its expectations, the broker keeps its 'buy' rating and 415p target price (TP).Results for the year ended April 2011 came in line with the range of guidance given, Singer notes, with the legacy software specialist seeing a 6% decline in like-for-like revenues with Cobol flat and Testing down 16%.Meanwhile, the company indicated that ongoing discussions with regard to a number of potential offers continue. "There is still a lot to deliver to turnaround the business operationally and put it back on a growth track. This is counterbalanced by the bid offers. We see no reason to change our 415p TP," Singer said.Peel Hunt also expects a weaker current-year performance than previously expected, and revises its numbers down by 3% on lower sales. The broker has kept its 'hold' rating "in the absence of a bid". A TP of 340p is retained.Peel Hunt has upgraded Imagination Technologies from a 'sell' rating to 'hold' and raised the price target from 390p to 413p, saying that the downside risks look limited.Results from Imagination, which makes graphics technology used in chips for computers and mobile phones, were in line with Peel Hunt's forecasts and the broker has moved up its conservative royalty forecasts for the current year and the next "to reflect the trajectory towards [the company's target of] 1bn units within five years.""We see the current share price as reflecting [Imagination's] lower-end market share forecasts and have moved to a 'hold'," said analyst Alex Jarvis.UBS has raised its target price for design and engineering consultancy WS Atkins from 725p to 770p given the year-end pension adjustments, but the broker stays cautious with a 'neutral' rating.Results for year ended 31 March were broadly in-line with consensus on an underlying basis, the broker notes. However, the UK outlook continues to provide some concern as it accounts for "60% of revenues and conditions are difficult."Around a half of UK revenues come from rail and highways where volume and competitive pressures remain, pushing down UK profit by 20% year-on-year in 2011.While the broker cuts FY12-13 earnings before interest and tax estimates by 1-3%, lower tax and interest guidance mean that earnings per shares are raised by 6-7%.---BC