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Broker Roundup: Man Group, Rank, Glencore, Chariot Oil & Gas, Desire Petroleum, Range Resources, Petro Matad, Metminco, Pan African Resources, NetPlay

Last updated: 17:33 31 May 2011 BST, First published: 16:33 31 May 2011 BST

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UBS analyst Arnaud Giblat said that Man Group (LON:EMG) is currently trading at a 26 percent discount to the sector and this is too cheap. The analyst repeated a ‘buy’ recommendation which targets 330 pence a share.

Vaughan Lewis at Morgan Stanley claimed that UK bingo and gaming firm Rank (LON:RNK) is materially undervalued, while initiating coverage with an ‘overweight’ rating with a 200 pence a share target. The analyst stressed that Rank could even pay a 150 pence a share – roughly equivalent to the current price - in special dividends over the next three years.

Nomura today initiated coverage of Glencore (LON:GLEN) -  a week after the commodities trader was fast tracked into the FTSE 100 index. The broker slapped a “reduce” recommendation on the stock, but put a price target that is higher than its current market value.

The note added to concerns that the IPO was overpriced with Nomura considering Glencore’s valuation to be expensive relative to peers, even though its management is the “most entrepreneurial team in the sector”.

Analysts at Citigroup reckon London's E&P sector offers a discount that could lure predatory, acquisition-hungry firms. Citigroup’s Michael Alsford highlighted that valuations in the UK E&P – exploration and production – sector have failed to respond to rising oil prices earlier this year and they have fallen on macroeconomic weakness in recent weeks.

Share tipster ‘Watshot’ - part of t1ps.com Ltd – pointed out that Asterand (LON:ATD) is trading at year-lows despite the fact that the company is on the verge of sustainable profitability. It said that a recent interim management statement confirmed that trading has been in line with expectations and Asterand is confident that revenue growth will continue well into the future.

However Alsford stressed that the sector’s fundamentals remain strong and it makes some of the firms attractive takeover targets. Citi’s top picks in the sector are Premier Oil (LON:PMO), Afren (LON:AFR ), Soco International (LON:SIA) and Bowleven (LON:BLVN).  

Ambrian Capital reckons Chariot Oil & Gas (LON:CHAR) it close to sealing a vital farm-out over its Nambian assets and a deal could be finalized within weeks rather than months. The broker repeated a ‘buy’ recommendation that targets 421 pence a share. 

Westhouse Securities believes that Desire Petroleum’s (LON:DES) latest update, that gave details of two new prospects in the Falklands, could rekindle interest in the stock among retail investors – although the broker repeated a ‘hold’ recommendation. “This is early-stage geology and geophysics (G&G) work, which Desire will be keen to advertise and demonstrate that it has the potential to refill the ‘hopper’ at the start of the E&P cycle, following its recent exploration disappointments,” Westhouse said. 

Range Resources (LON:RRL,ASX:RRL) spiked more than 8 per cent in afternoon trade after broker Old Park Lane initiated coverage of the stock with a buy and bullish 28.1 pence a share price target. “With Range participating in four high impact exploration wells over the next six months, we believe that investors should see the recent weakness in the share price as an opportunity to buy the shares,” the broker said.

Separately Westhouse analyst Peter Bassett repeated a ‘buy’ recommendation on Petro Matad (LON:MATD) after a visit to the group’s operations in Mongolia.

Bassett said: “We were impressed with the team that has been put together over the past twelve months and the momentum that operations are gaining in the remotely located Block XX, where drilling of DT-5 remains under way; and in Blocks IV and V, where earlier-stage exploration is also ongoing.”

Investec analyst Hunter Hillcoat said that Metminco (LON:MNC) should now be able to commit fully to the development of all of its projects, after a number of important deals were ratified at yesterday’s AGM. Metminco now owns 100 percent of all its projects.

“Our previous target price reflected a blend of valuations dependent on different ownership structures and the associated consideration. Given that the ownership issues have now been clarified, our target price is now simply in line with our base case of 35 pence per share.

Fairfax analyst John Meyer said that Pan African Resources (LON:PAF) is one of his firm’ few, favoured South African gold stocks. “A good profits report in February saw attributable earnings rise by 70 percent last year to £7.6 million on 46,655 ounces of gold production,” the analyst said in a note to clients. 

“The removal of illegal miners and increase in grades suggests that the mine should have an even better year through 2011 and this gives the company a strong platform for further growth."

Share tipster ‘Watshot’ - part of t1ps.com Ltd – pointed out that Asterand (LON:ATD) is trading at year-lows despite the fact that the company is on the verge of sustainable profitability. It said that a recent interim management statement confirmed that trading has been in line with expectations and Asterand is confident that revenue growth will continue well into the future.

Television and online gambling business NetPlay TV (LON: NPT) is now leaner, more focused and “on a much improved trajectory”, according to house broker Panmure Gordon after the firm announced its results for 2010.  Panmure reiterated its hold recommendation and nine pence target for the company’s shares.

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