Drugs giant AstraZeneca (LON:AZN) gets a shot in the arm from broker heavyweight Deutsche today, which upgrades the shares to 'buy' from 'hold'.
Its analysts have done some detailed number crunching and reckon the pharma giant will deliver a return to strong growth from a base in 2017.
"While investment in AZN still carries execution risk, we believe it offers significantly greater pipeline optionality than its peers," says Richard Parkes.
"With our Base//Bull cases justify DCF valuations of 5,900-7,500p/share and downside protection at around 4,000p, we see positive risk-reward."
He also notes that the group's pipeline has been "transformed" in recent years, with 15 new drugs now in late stage development.
The target price is also pumped up to 5,700p from 4,850p and Parkes notes that shares have underperformed EU Pharma by more than 10% in 2015 and are trading at a discount to peers on 2016 price to earnings.
"We believe this presents an attractive entry point as the company nears its return to growth in 2017/18E."
Potash mine developer Sirius Minerals (LON:SXX), which recently got green light to build the mine, gets a thumbs up from Shore Capital today, which has started covering the firm with a 'buy' recommendation.
"While an investment in Sirius will become progressively derisked as the company advances towards production, we believe that it already offers a more robust, lower-risk investment with the prospect of better returns than typical of its peers," says the broker.
"This long-life high-volume project could potentially enjoy a mine life of in excess of 100 years even at a full production rate of 20Mtpa of polyhalite, we believe."
JP Morgan Cazenove looks at playing equities generally in the light of the Fed meeting this week, and reckons regardless of its decision on rates (yes or no), it could be taken positively by markets
"We believe that the policymakers are still on the side of the risky assets and will act supportively,," says the investment bank.
It says it has been cautious on commodity shares for a while, but now advises investors tactically add exposure and ha upgrade mining shares to 'overweight' and also upgrading Energy to 'neutral'.
Turning to smaller stocks, Panmure repeated a ‘buy’ on Midatech Pharma (LON:MTPH) targeting 420p after the company reported its latest half year results, which reflected a busy period in terms of corporate and commercial development after last year’s IPO.
The same broker says ‘buy’ Collagen Solutions (LON:COS) after its acquisition of Chondromimetic product and IP. The target is 18p a share.
The total price isn’t given in the release but the paper component of 869,900 shares represents about £100,000 at the current share price and the broker assumes the full amount is therefore low hundreds of thousands.
To explain the background, Panmure says Chondromimetic was Orthomimetics’ key product and investors familiar with the space will recall Belgium-based TiGenix acquiring Orthomimetics in 2009 in a deal valuing Orthomimetics at €16mln.
“In our view, today’s deal therefore represents something of a bargain,” says analyst Dr Mike Mitchell.
“The product represents an important step up the value chain for Collagen Solutions, while still leveraging the company’s core expertise in collagen development and manufacturing.”
Copper miner Weatherly International (LON:WTI) has upgraded its production forecast for the Tschudi copper mine in Namibia from 1,000 tonnes per month to 1,150 tonnes, it emerged today.
However, with the copper price at a six year low, the company is suspending production at the Central Operations, comprising the Matchless and Otjihase mines.
The plan is to switch these mines into what the company calls a “development phase” to allow for the production of copper in greater volumes once the price improves again.
RFC Ambrian said: “Given the initial operational difficulties that the company faced at Tschudi, it is encouraging that the operations are performing better than the updated guidance given in late July. The project’s designed production rate of 1,400tpm is planned to be achieved during 4Q15, which is expected to bring production to 10,000t during CY15 and to achieve the designed rate of 17,000t during CY16.”
The broker added it was not surprised that the company has decided to limit cash outflows by suspending mining operations.
Martin Potts at house broker FinnCap added : “We have introduced new copper price forecasts; our earnings forecasts have changed and our target price has been reduced to 2.9p.”