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TUI upgraded thanks to “very positive” third quarter

Last updated: 14:01 17 Aug 2015 BST, First published: 10:32 17 Aug 2015 BST

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Deutsche lifts its price target for TUI today to 1385p from 1235p

---ADDS Investec RESEARCH---

Analysts at Deutsche Bank reckon TUI’s (LON:TUI) recently released third quarter results are “very positive”, even after the losses relating to Tunisia, Greece and foreign exchange volatility.

Deutsche lifts its price target for TUI today to 1385p from 1235p as forecasts for the full year were upgraded.

The German bank’s ‘buy’ recommendation views TUI’s component parts more so than valuating the business as though it was still a pure tour operator, according to analyst Geof Collyer.

Builders merchant Wolseley (LON:WOS) offers ‘good medium-term value’, according to the number crunchers at Citi, who this morning upgraded the supplier to the booming building sector to ‘buy’.

Wolseley has significant scope to advance the business in the US and says the business balance sheet is strong enough to support growth plans.

Citi, which reckons the stock is worth £47.25 a share, said the owner of the Plumb Centre chain has the potential to grow at a compound annual rate of 16% over the next three years.

On the flipside, the American bank remains a ‘seller’ of Ferrexpo (LON:FXPO), which has been a victim of the downturn in iron and steel demand.

That said, Citi’s stock pickers are a little less bearish about on the prospects for the group, evidence by the fact that price target has been raised by 20p a share to 58p.

Elsewhere Barclays was one of the more active brokers this morning as it repeated its bullish calls on two mid-cap property stocks.

It remains overweight on Capital & Counties (LON:CAPC) and Derwent London (LON:DLN), raising its price targets respectively to 468p (from 423p) and £41.80 (from £138.92). It remains equal weight on Shaftesbury.

Ahead of the earnings season for the energy sector, Investec took the opportunity to reduce earnings estimates for the six oil services firms in its ‘coverage universe’.

This is the reflected the ‘lower-for-longer’ oil price scenario we are now seeing.

Investec has two firms on its buy list (Cape [LON:CIU] and Lamprell [LON:LAM]); two it advises clients to sell (Hunting [LON:HTG] and Wood Group [LON:WG]) and two it is sitting on the fence about (Amec [LON:AMW] and Petrofac [LON:PFC]).  

“From the outside, the current travails of the oil industry can provoke morbid fascination,” the broker told investors.

“While everyone is doing their best to cope, it still makes for uncomfortable viewing. A ‘lower-for-longer’ scenario is beginning to be baked into market expectations.”

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