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 1321 GMT [Dow Jones] Ambrian initiates coverage of Vectura Group (VEC.LN) with a buy rating and fair value of 98p. Analyst Chris Redhead says the drug maker is significantly undervalued. A program with Novartis (NOVN.VX) could bring the companies a significant share of the $9 billion-a-year market for medicines for chronic obstructive pulmonary disease, or smoker's lung, and a clear route to market exists in Europe for Vectura's generic version of GlaxoSmithKline (GSK.LN) asthma blockbuster even if it doesn't in the U.S., he says. It also has other products ready for partnering with a big drug maker, Redhead adds. Shares flat at 44p (jason.douglas@dowjones.com). 1315 GMT [Dow Jones] Collins Stewart lowers Keller Group (KLR.LN) target price to 644p from 670p. The company's 1H results are "very weak," but this was well flagged by the profit warning in May. Most of the damage was done by the US operations, in which EBIT swung to GBP1M loss from a GBP19M profit, with revenues down by a quarter, the brokerage says. Still, Collins Stewart says the outlook is starting to improve, with the company seeing orders grow at the group level for each month since December 2009. Buy rating. Shares +4.7% at 575p. (ishaq.siddiqi@dowjones.com) 0934 GMT [Dow Jones] Deutsche Bank cuts Anglo American (AAL.LN) price target to 3450p from 3520p following the company's 1H '10 results. Earnings are marginally ahead of expectations but essentially, this is a result of strong outperformance in iron ore. Operationally, Met coal, thermal coal, nickel and copper are below expectations. Deutsche also notes further bad news regarding the Minas Rio project. The project has been delayed and Anglo is not able to clearly forecast the capex level. Deutsche thinks the delay will be least nine months and as a result, capex is up $750M. Keeps at buy. Shares are +3.5% at 2612p. (andrea.tryphonides@dowjones.com) 0744 GMT [Dow Jones] Hammerson (HMSO.LN) "is doing all the right things" says an analyst at Evolution Securities. The analyst notes Hammerson is the only major real estate investment trust to increase its dividend year-on-year in 1H. "We support this strongly," says the analyst. The analyst says the company is also the only major REIT to have changed its corporate structure in the first half. This follows last year's rights issue. "Lower gearing, less development risk and greater asset churn are the manifestations." Add rating, 420p target. Shares +4% at 404p. (anita.likus@dowjones.com) 0735 GMT [Dow Jones] Hammerson's (HMSO.LN) results are in line with expectations, says KBC Peel Hunt. Hammerson has been one of the most active recyclers of capital amongst its peer group in the last 18 months, making over GBP700M of disposals, while acquisitions have totaled about GBP100M,says KBC Peel. It notes the company is bullish on the City office market, based on market expectations of a sustained recovery in rental levels over coming years. Buy recommendation. Shares +4.2% at 404.7p. (andrea.tryphonides@dowjones.com) 0733 GMT [Dow Jones] WS Atkins' (ATK.LN) 1Q interim management statement is in-line yet cautious says Execution Noble. Unsurprisingly, weakness has been evident in education while the group's UK highways and international activities appear steady. The acquisition of PBSJ, is a strategically important move, says Execution. It represents an opportunity to diversify the group's revenues, given budgetary headwinds, says Execution. The key issues are on the business fit as well as updated prospects for the UK business. Hold rating. Shares +2.7% at 733p. (andrea.tryphonides@dowjones.com) 0657 GMT [Dow Jones] Intertek Group's (ITRK.LN) 1H results are stronger than expected at a revenue level but in line at EBITA level, says an analyst. Says the revenue beat is driven by robust organic growth. Says for '10, the company expects organic revenue growth in mid-single digits and for margins to be flat. As a result, the analyst does not expect significant upgrades to consensus estimates. Shares closed on Friday at 1577p. (andrea.tryphonides@dowjones.com) 0657 GMT [Dow Jones] Intertek's (ITRK.LN) 1H results are stronger than expected at revenue level, but in line at Ebita level, says analyst. In terms of the outlook, the company now expects organic growth in mid single digits and flat margins. But this is "not enough to push consensus materially higher," the analyst adds. Intertek shares closed at 1577p Friday. (LEV) 0648 GMT [Dow Jones] Senior's (SNR.LN) interim pretax profit is ahead of expectations says a trader. FY adjusted EPS is lifted by 4% to 10.7p notes the trader. The trader sees potential for further upgrades during the 2H and says the shares look attractive particularly as the outlook for civil aerospace continues to improve. Shares closed Friday at 127.5p.(andrea.tryphonides@dowjones.com) 0638 GMT [Dow Jones] Randgold Resources (RRS.LN) will likely open weaker Monday, after lowering its production guidance from its Loulo gold mine says a trader. Says Randgold is expecting Loulo's output for '10 to be within 5% and 10% of its original forecast of 400,000 ounces. Shares closed on Friday at 5730p. (andrea.tryphonides@dowjones.com) 0620 GMT [Dow Jones] Citigroup raises British American Tobacco (BATS.LN) target to 2570p from 2460p after its 1H '10 adjusted EPS beats consensus by 3%. Says the company's 1H results are stronger than expected in all regions apart from Eastern Europe. Lifts '10 EPS forecast to 178.4p from 175.4p and '11 to 195.2p from 191.9p. Says the global slowdown has impacted cigarette volumes much more than the market expected but this has been made up for by very large price increases. Notes that British American is seeing signs of improving volumes, especially in Russia. Maintains buy rating. Shares closed Friday at 2194p. (andrea.tryphonides@dowjones.com) 0615 GMT [Dow Jones] Citigroup nudges up British Airways (BAY.LN) price target to 295p from 280p, based on 100% profitability of its joint-venture with American Airlines going ahead and on updated combined BA/Iberia Lineas Aereas de Espana (IBLA.MC) valuation. Also, following stronger than expected 1Q results, raises '11E operating profit to GBP437M from GBP245M. Lifts '11 EPS forecast to 8.9p from a loss per share of 2.0p, and raises '12 EPS forecast to 27.3p from 22.1p. Keeps BA at buy. Shares closed on Friday at 219.6p. (andrea.tryphonides@dowjones.com) Contact us in London. +44-20-7842-9288 Markettalk.eu@dowjones.com (END) Dow Jones Newswires August 02, 2010 09:21 ET (13:21 GMT)