Things are not looking great for gambling sector with an increasingly tough regulatory backdrop and uncertain economic outlook over the next 12-18 months, argues Investec.
But for investors that throws up the prospect of more M&A due to increased regulation, rising costs and intensifying competition.
The broker’s rationale is straightforward enough.
That at least is the opinion of Cantor Fiztgerald analyst Sam Wahab, who repeated his ‘buy’ and 101p a share price target for the stock.
“Sound has grown its acreage position to become a material player in Mediterranean gas,” he said.
The headwinds facing the life insurer that intensified this year are starting to ease believes the German broker, which has upped its target price to 1,590p from 1,385p.
Management has taken corrective action and with the recent rise in bond yields the capital position is returning to robust levels.
Broker Panmure repeated a 'hold' stance on the shares, noting it had downgraded the stock at the start of September.
Analyst Kieron Hodgson said while he sees longer term value in the firm, short term optimism was too bullish.
The broker reckons the investment programme to increase production to over 80,000 ounces a year by 2021, the low-cost nature of the operation, an unrivalled yield and significant cash resources offer enough incentives for investors to ensure the Caledonia story remains interesting.
Even if the discovery stopped here, analysts at City broker Beaufort say it would still be a decent find, but it’s expecting more.