Commodities crisis or not, three mining majors were today upgraded by Liberum.
Neither BHP Billiton (LON:BLT), Rio Tinto (LON:RIO) nor Glencore (LON:GLEN) are worth selling anymore, according to analyst Richard Knights who now moves his recommendations to ‘hold’.
The Liberum analyst describes the upgrade as ‘reluctant’ but adds that all three major mining stocks are now “approaching plausible fair value” following prolonged decline.
Don’t, however, think for a second that he is bullish on the sector.
“We expect mining fundamentals to continue to deteriorate into the second half as demand conditions worsen, supply in some key commodities accelerates and dividends come under pressure,” Knights said in a note.
“However, valuation sensitivity to a set of feasible long-run assumptions suggests risk/reward is fairly evenly poised.”
Elsewhere there was no let up for Fresnillo (LON:FRES), which yesterday cut its dividend and revealed disappointing financial results. Deustsche Bank this morning reduce its target price to 715p from 750p and repeated its ‘hold’ rating.
Elsewhere, Cineworld (LON:CINE) rushed to set a new high in early deals, on the same day that Barclays Capital upgraded the share to ‘overweight’ from ‘equal weight’.
The cinema operator, which reports its interim financial results next week, traded up to a new high of 529.68p, before easing back to 522.5p (still up 1.65% for the day so far).
Analysts at JP Morgan Cazenove reckon being ‘overweight’ is ideal after rising fast food sales; they are, of course, talking specifically about the rating for Just Eat Plc (LON:JE.) which yesterday revealed that orders through its online platform rose by 52% to 41.9mln.
The blue-chip broker today increases its target price to 630p from 550p.
British ‘turnaround’ investor Melrose Plc (LON:MRO) was downgraded to ‘hold’ from ‘add’ by Numis Securities.
Thomas Cook is downgraded to ‘sell’ from ‘hold’ by Berenberg which says the latest bearish changes to next year’s outlook is now “a step to far”.
It comes after the tour operator’s third quarter results reset some expectations for 2016.
Berenberg analyst Stuart Gordon, in a note, said: “The company estimates that consensus following the Q315 results will settle between £300m and £310m, with the company setting a floor of £284m.
“We believe that TCG will deliver much closer to the floor.”
Berenberg’s target price moves to 100p from 130p.
Jefferies, meanwhile, appears more bullish as it retains a ‘buy’ recommendation, albeit with a lower target of 145p from 165p.
There, analyst Mark Irvine-Fortescue says the negative impacts of the terrorist attack in Tunisia and the economic problems in Greece are higher than he had provided for, but, otherwise the trading and outlook was as expected.