Broker spotlight - Soco International, ASOS, Cineworld, Whitbread, Morrisons


Whitbread and ASOS dominated the chat today, with brokers warming to both.

UBS has admitted it was wrong to put a ‘sell’ rating on Costa Coffee and Premier Inn owner Whitbread (LON:WTB) in September.

The Swiss broker has scrapped is now at ‘neutral’ saying that the market is clearly happy to pay a premium for a quality company with a strong track record.

SocGen downgraded accontancy software specialist Sage (LON:SGE) to ‘sell’ from ‘hold’.

The current valuation leaves no room for error in the current transformation, it said.

This year’s targets may be achievable and short-term fundamentals are robust, but the broker is more cautious on its medium-term prospects even though its target price edges up to 435p.

A warm glow is definitely surrounding ASOS (LON:ASC) this morning with upgrades everywhere for the online fashion house.

SocGen has raised its price target to 4,666p, saying that the US was a stand-out performer in its latest quarter.

UK sales growth also accelerated over the three months.

Deutsche Bank and JP Morgan Cazenove also raised their targets though they still look well off the pace.

DB raised its share price target on the firm by 1,100p to 3,500p, while JP Morgan is at 3,600p but ASOS shares are already above both at 3,780p. 

Oil and gas firm Soco International (LON:SIA) was out of favour among brokers after a tough day yesterday.

Shares slumped on Thursday after the group wrote off US$79.5mln from exploration assets in Vietnam and the Democratic Republic of Congo.

Falling oil prices also put a dent in the group’s financial results.

Today, Jefferies and BMO Capital Markets both sent out downgrades, dropping their target prices to 180p and 140p respectively. 

A star rating was also afforded to cinema chain Cineworld (LON:CINE).

After yesterday’s blockbuster figures from the group, JP Morgan sees shares reaching 500p – they’re currently 473p.

Brokers clearly weren’t impressed by Morrison’s (LON:MRW) full-year figures yesterday. Nomura, Deutsche Bank and JP Morgan have all downgraded the firm today.

To smaller fry and Liberum repeats a 'buy' on Providence Resources (LON:PVR) after it told investors that analysis of 2D seismic points to the Silverback exploration prospect containing up to 1.3bn barrels of oil. 

A technical report of Licensing Option (LO) 13/04, in the South Celtic Sea Basin, confirms the presence of the Silverback prospect as well as a number of other prospects within the area.

The broker targets 648p on the stock - significant upside from the current price of 24.25p.

Meanwhile, house broker Northland repeated a 'buy' call and has a price target of 12.9p on diamond firm Paragon (LON:PRG) after it raised £130,000 to explore a possible new mine acquisition that will be developed alongside Lemphane in Lesotho.

Its plan would be to develop both simultaneously, with significant savings to come from combining management teams and contractors.

Mapping and chip sampling has identified new areas of gold as well as copper at Block 4 in Oman, Savannah Resources (LON:SAV) said today, which house broker RFC Ambrian said was encouraging.

"We look forward to the results of the ten-hole diamond drilling programme on the Oman acreage, currently at the mid-way point, to provide further clarity on the prospectivity of the Block 4 targets. 

"With five holes drilled across the Ghayth and Sarami prospects on Blocks 4 and 5 respectively, we expect an update following the completion of the programme in the coming weeks," added the broker.

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