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Broker Round-up Part 2: Afferro Mining, Beowulf Mining, Connemara Mining, Victoria Oil & Gas, Leni Gas & Oil and Nighthawk Energy

Ahead of a weekend of Jubilee festivities, there was not much celebrating by investors in fashion retailer Next (LON:NXT) today despite a bullish note from Nomura.

The broker has a ‘buy’ recommendation and shoved up its target price to 3,330 pence from 3,050 pence.

Shares may have slipped 18 pence today but Nomura analysts claim Next’s market share will continue to grow as it has done in the last 10 years.

B&Q owner Kingfisher (LON:KGF) is the jewel in the crown for brokers today.

HSBC, UBS and Liberum Capital all see the DIY retailer reigning supreme in the sector despite a tough start to the year.

But they all reckon Kingfisher will bounce back as its results were affected mainly by the April washout, not by euro zone fears.

The same cannot be said for Halfords (LON:HFD) whose shares continued to struggle today.

And Deutsche Bank doesn’t see things picking up, cutting its price target to 255 pence from 320 pence previously.

It fears that Halfords’ focus on operating cost investment this year won’t lead to revenue growth in online or in stores as planned.

US heavyweight Morgan Stanley thinks ARM Holdings (LON:ARM) will be a royal success when Windows rolls out its tablets.

The company provides chips for Windows, as well as for tech superpower Apple’s iPad.

A survey by the broker showed consumers’ preference for Windows products as 25 per cent of those who intend to buy a tablet said they would go with Windows.

“Given these products have yet to be launched, this is more bullish than we expected,” admitted the broker, which upped its target price by 35 pence to 725 pence.

And with ARM leading the way in terms of price and battery life, Morgan Stanley thinks ARM is a handy stock to invest in, backed up by earnings forecasts of five and six per cent for 2013 and 2014 respectively.

Broadcaster ITV (LON:ITV) will have to put the champagne on ice for the time being.

Broker Investec has branded the company a ‘sell’ today as the current economic climate seems to be overshadowing the Euro 2012 and Olympics effect.

ITV had hoped advertising revenues would soar from the summer of sport but Investec doesn’t see this happening, downgrading the stock from ‘hold’ and dropping its target price by 30 pence to 60 pence a share.

Afferro Mining (LON:AFF) should be in celebration mode after a positive write-up from RBC Capital.

The broker says the iron producer remains undervalued relative to its rivals and has raised its target to 275 pence from 220 pence despite the share price’s recent slump, leaving it at 41 pence today.

With important catalysts just round the corner, including an update resource, project partnering and a pre-feasibility study for Nkout, now could be the right time to invest in the stock, RBC added.

Today was also a good day for fellow iron company Beowulf Mining (LON:BEM).

Fairfax analyst John Meyer waxed lyrical about today’s results, which mean management “can now progress an extensive planned infill drilling programme at their major project”.

Elsewhere in mining, shareholders in Connemara Mining (LON:CON) are sitting on a relative gold mine, according to Optiva Securities.

The broker has a target price of 50 pence for the Irish company’s Stonepark project alone, leaving its other projects still to be priced in.

This already represents significant upside to the current market price of just over 8 pence.

Brokers were just as bullish on oil and gas juniors.

Daniel Stewart expects production and revenues from Victoria Oil and Gas’ (LON:VOG) Logbaba field imminently.

It rates the stock as “cheap” on current levels, down 0.1 pence today to 3 pence.

Northland Capital takes a similar view on Leni Gas and Oil (LON:LGO).

The company has shifted its focus towards its assets in Trinidad and is looking to move away from Spain where it sees less potential.

The broker likes the look of this new strategy, highlighting “strong evidence of progress on the ground in Trinidad, a core area where we see excellent potential for reserves and production growth.”

Shares dipped 0.14 pence today to 0.64 pence.

Westhouse Securities believes investors can look forward to more consistent and improved results from Nighthawk Energy (LON:HAWK) for the second quarter of this year.

This comes after the US-focused company announced that the bottleneck of production arising from the poor condition of topsides processing facilities at the Jolly Ranch shale oil asset was taking longer than planned.

But the broker remained optimistic for the company going forward.

“Importantly, the drilling of new wells will enable Nighthawk to demonstrate its credentials as an operator and also its understanding of the subsurface; specifically the Cherokee formation,” Westhouse added.


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