Liberum Capital is impressed with Xcite Energy Limited (LON:XEL), the North Sea oil field developer, following its financial results statement and a restatement of its crude reserves.
Analyst Andrew Whittock said Xcite’s current share price does not recognise enough value for the Bentley heavy oil field (the company’s primary asset) and, as Liberum repeated a ‘buy’ recommendation the price target rose slightly to 43p from 42p.
Liberum’s target implies some 200% upside to Xcite’s current price of 14p.
“Satisfactory 2015 results came with an updated Bentley CPR. That report maintains reserves and reduces costs, sustaining the field’s NPV even at lower oil prices,” Whittock said in a note.
“This should help Xcite’s plans to secure the financing required for its Bentley development plan and to get some financial flexibility from bondholders ahead of the maturity end Q2.”
Elsewhere, Deutsche Bank lifted its price target significantly for Vedanta (LON:VED) to 260p from 185p, and has set a ‘hold’ rating.
Peel Hunt upgraded parenting retailer Mothercare (LON:MTC) to ‘buy’ from ‘hold’ though the target remains as 275p per share.
Sky Plc (LON:SKY) was upgraded by Exane BNP Paribas to ‘outperform’ from ‘neutral’.
In the downgrades section, Glencore (LON:GLEN) was cut to ‘market perform’ from ‘outperform’ in BMO Capital’s view, and a new 160p target was set.
Deutsche Bank, meanwhile, moved to ‘hold’ on Glencore as well. It was, however, just one of a number of mining downgrades.
It also dimmed its view of Kaz Minerals (LON:KAZ), Rio Tinto (LON:RIO), BHP Billiton (LON:BLT), South32 (LON:S32), Ferrexpo (LON:FXPO), Antofagasta (LON:ANTO) and Acacia Mining (LON:ACA).
Elsewhere, among small caps today, Shanta Gold Limited (LON:SHG) reached a major milestone - receiving a US$9.1mln financing with a Tanazania bank to build a 7.5Mw power station at its flagship New Luika gold mine.
The move will cut costs of supplying power to the mining operation significantly, it told investors.
Broker SP Angel noted: “The power station project is another positive development in Shanta’s progression towards lower costs and longer term development.
“Shanta’s recent high-grade gold discover at Askari, just 14km away from the New Luika gold mine, announced last month was an important milestone towards the longer-term development of a larger gold mining business.”
Shares eased 3.57% on the day to 6.75p.
Meanwhile, back office optimisation software company eg solutions PLC (LON:EGS) is set to return to sales and earnings growth this year, according to house broker finnCap.
The year to 31 January 2016 was always going to be one in which the company invested for the future, and it started the fiscal year budgeting for a small loss; in the end, thanks to a focus on containing costs, it managed to eke out a small profit before tax of £9,000, versus a profit of £407,000 the year before.
Strip out share based payments of £98,000 (fiscal 2015: £46,000) and the pre-tax profit performance looks better still at £107,000 versus £453,000 the year before.