logo-loader

Broker Roundup: Provident Financial, KESA, ENRC, Medusa Mining, Kenmare, Ormonde, Hardy Oil & Gas, Cupid, Synchronica, Software Radio Technology

Last updated: 16:40 23 Jun 2011 BST, First published: 15:40 23 Jun 2011 BST

no_picture_pai

 

RBC analyst Peter Lenardos said it is unlikely that Provident Financial (LON:PFG) will achieve the broker’s full year forecasts. As such he downgraded his forecasts to take into account the lower growth, he also cut his rating to ‘underperform’ and slashed his price target from 910 to 885 pence.

KESA Electrical (LON:KESA) has the ability to defend its market position in what is a tough market because it has a strong balance sheet, according to analysts at Nomura. The City firm has a ‘neutral’ rating on the retailer, but with a 157 pence target price the broker believes KESA’s shares could rise over 14 percent from the current 137p level.

Analyst Christopher Walker described KESA’s Darty unit as an attractive and ‘forgotten business’ and stressed that the French chain-store keeps improving both margins and market share. 

Eurasia Natural Resources Corporation (LON:ENRC) remains a ‘buy’ for broker Citi despite recent boardroom turmoil and a recent softening of the spot price for ferrochrome denting earnings projections. The broker says that while weakening of the spot price for ferrochrome has led to a 5% downgrade in its 2011 earnings for the group, this has had little impact on its valuation for the stock or its 2012-2013 forecast. 

The broker, furthermore, argues that ENRC’s share price of 744p (as at 21 June) implies zero growth for the company. Even this scenario, however, suggests a valuation of 900p for the shares. 

The disappointing news that Medusa Mining (LON:MML, ASX:MLL,TSE:MLL) has downgraded its production guidance in the forthcoming year by 12.5 percent as it develops its Co-O mine has been tempered by the fact that development costs will be less than expected, says broker Seymour Pierce.

It comes as Medusa told investors yesterday that it expects to produce between 100,000 and 110,000 ounces of gold in the forthcoming year at cash costs of around $200 per ounce - a downgrade from earlier estimates. 

Analyst Asa Bridle said: "The reason behind the downgrade is the significant development work required in Q1 (full year 2012)  for the company to achieve its long term production goal. He added: "Furthermore, the downgrade is tempered by a 12.5 percent reduction in the estimate of the development's capex (now US$70million), which the company can finance out of existing cash and future cashflows. 

Bridle rates the mining company a "buy" with a target price of 563 pence.

Kenmare Resources (LON:KMR) is a stock on fire, says Renaissance Capital’s Jonathan Williams. “I have been highlighting the underperformance of Kenmare Resources versus Iluka Resources,” he said.

“Whether the market is looking at Kenmare as a rare earths play all of a sudden is uncertain, but they do have some rare earth deposits at Moma. Ilmenite, Zircon and Rutile have not been classified as such before. 

“Whatever, the underlying commodity prices are extremely good and I believe there will be consolidation in the sector so keep buying.”

A number of analysts welcomed Ormonde Mining’s (LON:ORM) latest batch of drill results from the Barruecopardo project in Spain. Analysts at Northland say that while it is difficult to gauge the performance of grades from today’s small set of results, which show some lower grades, the skew of 0.18% to 0.64% tungsten trioxide “seems reasonable against the global inferred grade of 0.45%”.

House broker Fairfax, meanwhile, said the drill results continue to prove up the scale and value of the Barruecopardo tungsten project.  “This is a good scale tungsten project with relatively simple processing,” it said. “News to date [from the project] has been broadly encouraging and suggests that a relatively coarse grind liberates, the key tungsten bearing mineral within the ore. This should mean that recovery costs will be low and a lower burden on power supply.”

Fox-Davies analyst Shahin Amini repeated a ‘buy’ recommendation on Hardy Oil & Gas (LON:HDY) after it announced a new discovery in India yesterday.“This discovery endorses the operator’s geological model and technical understanding of the plays in the block, by de-risking the fourth well which is expected to be drilled by the end of this year.

“Although the announcement of the discovery is positive, more information will be required to assess whether this is in fact a commercial discovery, which could be developed through a subsea tie-back to the facilities in the neighbouring D6 block.”

While repeating a ‘buy’ recommendation Peel Hunt analyst Paul Morland upgraded his forecasts for Cupid Plc (LON:CUP) by 3-5 percent because of the deal, and raised his target price to 220 pence a share. The analyst added: “Following recent success in France, Cupid is now rolling out its highly effective model in Germany. It is acquiring multiple dating sites for £2.5m, in a deal that comes with strong management and marketing expertise.” 

Broker Northland Capital Partners repeated a ‘buy’ recommendation for Synchronica (LON:SYNC), targeting 53 pence, after it unveiled a mass-market roll out for mobile phone users in Africa through a tie-up with Bharti Airtel.

Analyst David Johnson said today: “Roll out of the Airtel Africa service exposes Synchronica’s Mobile Gateway product to more than 200 million subscribers.

"Synchronica has access to a massive addressable market through its contracts with 83 MNOs (major network operators) and 8 handset manufacturers and, as services are deployed and taken up by subscribers we expect follow on orders to come through, smoothing the revenue curve of the business."

Arbuthnot analyst Kevin Fogarty began his coverage of Software Radio Technology (LON:SRT) with a ‘strong buy’ recommendation, targeting 50 pence a share.

“SRT is the global leader in the provision of AIS technology for marine and homeland security applications. The first regional automatic identification system (AIS) mandate in 2009 transformed SRT's financial performance and it is now well positioned in a compliance-driven market,” the analyst said. 

“Having reported 157 percent revenue growth for 2011, prospects for a dividend yield enhance the investment case.” 

 

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

1 hour, 25 minutes ago