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Broker tips: Antofagasta, Tullett Prebon, Mears
Thu, 09 Feb, 2012
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Broker tips: Antofagasta, Tullett Prebon, Mears
Tue, 9 Mar 2010, 13:13:00
Shares in Chilean copper miner <b>Antofagasta</b> dipped on Tuesday after the earnings came in a tad below consensus and the dividend disappointed, but the company remains the 'best copper pure play stock' on the London Stock Exchange, according to Ambrian. 'The dividend being set at US¢23.4 vs. consensus of US¢29 might result in a few long-faces in the market, but guessing what the board/family would distribute was always going to be a lottery as the 'normal' dividend is set so low (US¢9.4 this year, up from US¢9 in previous few years), and the balance is declared in the form of a 'special' (FY08 special was US¢51 and FY07 US¢41),' notes Ambrian analyst Peter Davey. 'If copper equity exposure is sought with some degree of protection against a short-term pull back in the copper price, Anto's is our top pick,' the broker declared. 'Due to the strength of its balance sheet, its share price would likely suffer less and recover quicker in the event of the copper price correcting in the short term (not unlike BHP Billiton during the financial crisis),' Ambrian reckons. The broker has a 'buy' recommendation on the stock and a 12-month price target of 1100p. Japanese broking house Nomura Securities remains a buyer of <b>Tullett Prebon</b> shares after the inter-dealer broker announced a solid set of results for 2009 this week. In the wake of those results the broker is upping its 2020 earnings per share (EPS) forecast by around 3% to 42.5p and bumping up its price target by around 5% to 380p, 'reflecting the further positive impact of the net cash position on our valuation.' On Nomura's earnings estimates the stock trades on a multiple of 7.1, making it the least expensive listed interdealer broker (IDB), with the average European IDB trading at 11 times estimated earnings for 2010. Results from social housing maintenance specialist <b>Mears</b> held few surprises, according to KBC Peel Hunt, but 'the outlook statement remains positive across the key operations,' the broker said. 'As a consequence of these strong underlying results we remain comfortable with our earnings projections and believe the market opportunity remains significant and robust across the key areas of operations,' KBC analyst Andrew Nussey said. KBC Peel Hunt has a target price of 325p for the stock. Charles Stanley is also a fan of the stock. 'In our view, Mears is in an excellent position to benefit from further outsourcing opportunities, and a 25% discount to the wider sector is unwarranted,' the broker maintains. 'The group has a strong order book, is exposed to defensive markets with growth opportunities, and has an excellent pipeline of bidding opportunities,' Charles Stanley analyst Matthew Earl notes. The broker has a 358p target price for the stock. Also in the Mears fan club is Panmure Gordon, though its price target is lower than Charles Stanley's at 330p, based on a sum of the parts valuation.
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