UK MARKET TALK ROUNDUP: BROKERS COMMENTS

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 1133 GMT [Dow Jones] While BP (BP.LN) is a fundamentally strong company that can handle the effect of the oil leak in the Gulf of Mexico, it is not out of the woods yet, says S&P Equity Research. It notes news that BP has temporarily stopped the oil flow from the Gulf of Mexico well, but says the well has to be capped, civil liabilities are yet to be determined and US politics could undermine BP's US asset position. "Thus, we think the shares will continue to trade below our estimate of their underlying value for some time." Keeps the stock rated hold, with a 640p price target. Shares +4% at 418p.(michele.maatouk@dowjones.com) 1016 GMT [Dow Jones] Citigroup slashes JD Wetherspoon (JDW.LN) price target to 540p from 740p, reflecting the lower-than-expected margin guidance for FY '10, following the 4Q update. Also takes into account recent market weakness and a more cautious outlook. Cuts '10 EPS forecast to 34.0p from 34.8p and '11 to 36.3p from 39.7p. Still thinks JD Wetherspoon is the best operator in the pubs sector and its strong free cash flow and organic roll-out strategy continue to support Citi's buy recommendation. Shares +0.9% at 424p. (andrea.tryphonides@dowjones.com) 0953 GMT [Dow Jones] UBS lowers JD Wetherspoon (JDW.LN) target price to 560p from 580p. "Our outlook for modest economic growth should improve the backdrop for pub sales, however we feel that, since the recovery is not expected to be vigorous, value formats will be favored by consumers," it says. Says that trading through the FIFA World Cup 2010 appears to be neutral for the business. "We have reduced our FY2010 EPS estimate to 34.8p from 36.3p as a result, which is in line with consensus," it adds. Has a buy rating. Shares -0.3% at 422p. (ishaq.siddiqi@dowjones.com) 0943 GMT [Dow Jones] Evolution Securities downgrades Dana Petroleum (DNX.LN) to sell from neutral due to considerable risk that Korea National Oil Corp won't make a firm offer. The brokerage notes Dana's exploration and production update Friday and says it offers little new information, instead appearing to be a negotiating tactic after KNOC's approach earlier this month. "We are not aware that KNOC has ever been especially interested in exploration or paying up for it so in the context of a possible bid this announcement looks more like a negotiating maneuver." Evolution sees considerable risk that Dana's share price will rattle back to 1000p-1100p without a bid. 1050p target. Shares +2.1% at 1445p. (jeffrey.sparshott@dowjones.com) 0902 GMT [Dow Jones] Panmure Gordon upgrades Enterprise Inns (ETI.LN) to hold from sell. Notes the pub company reporting season has started encouragingly, with upbeat comments on current trading from Greene King (GNK.LN), Punch Taverns (PUB.LN) and JD Wetherspoon (JDW.LN). Expects other operators to echo these comments over the following couple of weeks. "As such, and given the around 32% fall in the share price since the group's interim results, we upgrade our Enterprise Inns' recommendation from sell to hold whilst retaining our 90p price target." Shares +0.4% at 95p. (michele.maatouk@dowjones.com) 0721 GMT [Dow Jones] Societe Generale initiates Michael Page (MPI.LN) at hold with 387p target and Hays (HAS.LN) at sell with 81p target. Says while recruiters of both temporary and permanent staff are reporting a strong upturn in business trends, there is a risk the uncertain macro backdrop may hold down the recovery for permanent recruiters such as Hays or Michael Page. SocGen's cautious stance on Michael Page derives purely from doubts regarding the longevity of the current upturn. Says the company's attractions are clear and cites a no-acquisitions policy aimed at returning excess cash to shareholders and a strong brand. For Hays, the brokerage's concern is its exposure to the UK and within that its reliance on the public sector. Michael Page -0.6% at 396p and Hays flat at 96p. (michele.maatouk@dowjones.com) 0709 GMT [Dow Jones] Sage's (SGE.LN) promotion of its Europe and Asia boss, Guy Berruyer to the position of CEO, is a "strong appointment," and signals an unchanged strategy, Piper Jaffray says. "He brings significant experience, with a strong track record and we believe this confirms our existing view that a new CEO will not bring a change of strategy - this is positive news." Piper sees a smooth transition, with Berruyer assuming control in October and former CEO Paul Walker remaining with Sage till December. Overweight rating, 298p target. 3Q trading update due July 27. Shares flat at 242p. (lilly.vitorovich@dowjones.com) 0651 GMT [Dow Jones] Burberry (BRBY.LN) shares are expected to rise more than 5% today following news the company has bought its Chinese retail operations for GBP70M, says a trader. Notes the move will add GBP20M to operating profit for FY '12, according to Burberry. Says this implies upgrades to FY '12 EBIT, earnings and operating margin estimates. Reckons the market will welcome the news, which will have an accretive impact on profitability and give the group more control over its distribution network in China. Shares closed Thursday at 791p. (michele.maatouk@dowjones.com) 0641 GMT [Dow Jones] Sage's (SGE.LN) appointment of its European and Asia boss Guy Berruyer as its new CEO is good news, with Panmure Gordon analyst George O'Connor noting he has "international expertise, an industry background, has built an impressive business in Europe and is steeped in the Sage and the SME culture. These factors always gave him pole position in the hunt for a new CEO, in our view. We always expected an internal appointment, and Mr Berruyer was on our list with FD Paul Harrison, UK CEO Paul Stobart and North America head Sue Swenson." Says that as with the news in April of Walker's departure, "there is unlikely to be much of a share price reaction this morning." Valuation is pedestrian (P/E of 12.7x) and shares out-performed the FTSE by 4.3% in past quarter, says O'Connor, who retains a buy rating on Sage. Shares closed at 242p Thursday. (lilly.vitorovich@dowjones.com) 0629 GMT [Dow Jones] Goldman Sachs upgrades British Land (BLND.LN) to buy from neutral and raises price target to 514p from 500p. Says this reflects the benefits of its financing position. Shares closed Thursday at 449p. (michele.maatouk@dowjones.com) 0629 GMT [Dow Jones] Goldman Sachs upgrades easyJet (EXJ.LN) to buy from neutral. Thinks its returns profile merits a share price around 24% higher than it is currently. Says it has competitive strength is its flight network, and expects the company to strengthen this as short-haul operations shrink by necessity. Nudges down the price target to 515p from 520p. Shares closed on Thursday at 414.5p. (andrea.tryphonides@dowjones.com) 0623 GMT [Dow Jones] Morgan Stanley raises Michael Page (MPI.LN) price target to 485p from 475p. Notes the company delivered gross profit performance ahead of expectations last week. In addition, says the temp staffing market industry data for 2Q has been stronger than expected in France, the US and even the Netherlands. Keeps at equalweight. Shares closed Thursday at 398p. (michele.maatouk@dowjones.com) Contact us in London. +44-20-7842-9288 Markettalk.eu@dowjones.com (END) Dow Jones Newswires July 16, 2010 07:33 ET (11:33 GMT)