Citywire for Financial Professionals
Share this page:
Stay connected:


Citywire printed articles sponsored by:

View the rest of this gallery online at

The Expert View: BP, Merlin and TUI

Our daily roundup of analyst commentary on shares, also including Craneware and Pendragon.

by Michelle McGagh on Feb 14, 2018 at 05:01

If you would like to receive news alerts on any of the stocks mentioned in The Expert View, click on the star icons below to add them to your favourites.
Key stats
Market capitalisation£95,102m
No. of shares out19,929m
No. of shares floating19,778m
No. of common shareholdersnot stated
No. of employees74500
Trading volume (10 day avg.)40m
Turnover172,676m USD
Profit before tax18,917m USD
Earnings per share0.12 USD
Cashflow per share0.75 USD
Cash per share0.93 USD

BP gaining momentum, says Barclays

BP (BP) is on track a year into its five-year plan and momentum is building across the business, says Barclays.

Analyst Lydia Rainforth retained her ‘overweight’ recommendation and target price of 675p on the shares, which fell 3p to 476p yesterday.

‘We conclude that progress is on track, if not slightly ahead of plan, with both marketing and manufacturing delivering strong results,’ he said.

‘There is still a long way to go, but momentum across the entire BP business is building and we expect it to become increasingly evident over the coming 12 months that BP can deliver a material and sustained improvement in free cashflow.’

By 2020, Rainforth estimated that the downstream dividend and the fixed price part of the upstream business should by themselves ‘more than cover the dividend, leaving plenty of excess free cashflow for the group to make capital allocation choices’.

Key stats
Market capitalisation£3,269m
No. of shares out1,020m
No. of shares floating700m
No. of common shareholdersnot stated
No. of employees19489
Trading volume (10 day avg.)4m
Profit before tax£451m
Earnings per share20.72p
Cashflow per share33.59p
Cash per share21.17p

Opportunity in Merlin share price fall, says Numis

Shares in Merlin Entertainments (MERL) are trading back at their 2013 flotation price, which Numis said is an opportunity to invest.

Analyst Tim Barrett retained his ‘buy’ recommendation and target price of 454p on the shares after a 40-week update showed only marginal improvement in the London day trip market. The shares rose 2p to 320p yesterday.

The derating of the stock ‘more than reflected estimate risk’ creating a medium-term opportunity, said Barrett ‘Merlin’s share price has underperformed by 10% since its 40-week update,’ he said. ‘It is now trading back at its IPO price from 2013, notwithstanding 20% earnings per share growth over that period and an expected compound annual growth rate of 9% over the next three years.’

He added that the 2018 price/earnings multiple of 15.2 was ‘attractive versus peers and relative to earnings per share growth’.

‘Sales momentum may remain negative for several more quarters, which could weigh on short-term performance,’ he said. ‘However, we expect… investors to start to take more interest which could underpin material upside on a 12 months view.’

TUI cruising into profitable waters, says Shore Capital

Travel operator TUI (TUIT) is continuing its push towards higher quality business which will help it grow earnings over the coming years, says Shore Capital.

Analyst Greg Johnson reiterated his ‘buy’ recommendation on the stock after ‘robust’ first quarter results. The shares were up 1.2% at £16.14 yesterday.

‘TUI continues to make good progress in delivering on its strategy to recycle capital into high quality growth channels of cruise ships and hotels, with a further delivery for its TUI Cruise joint venture announced for 2023,’ he said.

‘These channels continue to deliver strong profit growth with less seasonality. The tour operator segment continues to deliver a resilient performance with demand strong for most regions, albeit sterling-related cost pressures continue to impact the UK, where margins and profits are likely to be down year-on-year.’

Key stats
Market capitalisation£440m
No. of shares out26m
No. of shares floating19m
No. of common shareholdersnot stated
No. of employees263
Trading volume (10 day avg.)m
Turnover42m USD
Profit before tax13m USD
Earnings per share0.35 USD
Cashflow per share0.38 USD
Cash per share1.42 USD

Peel Hunt: Craneware has entered its growth phase

Craneware (CRW), provider of software to US hospitals, has announced two ‘significant’ contract wins that proves it has entered its ‘growth phase’, says Peel Hunt.

Analyst Damindu Jayaweera reiterated his ‘buy’ recommendation and target price of £21.00 on the stock after news of ‘significant multi-year signatures with two new US hospital providers’. The shares jumped 4.5% to £16.70 yesterday on the news.

He said the deals showed that ‘not only has Craneware passed an inflection point in its momentum, but the arrival of the value cycle era is helping the company expand on its already leading market share’.

The fact that there have been contracts signed also ‘confirms the rude health of the underlying market’.

‘This confirms our view that Craneware has truly entered its next growth phase, which will be driven by a broader offering… these deals are also confirmation of strong first half traction continuing into the second half,’ said Jayaweera.

Key stats
Market capitalisation£341m
No. of shares out1,424m
No. of shares floating1,346m
No. of common shareholdersnot stated
No. of employees9656
Trading volume (10 day avg.)3m
Profit before tax£159m
Earnings per share3.81p
Cashflow per share7.79p
Cash per share5.85p

Pendragon on the right track, says Jefferies

The UK motor industry has faced some problems but the decline is slowing, which is good news for car dealership Pendragon (PDG), says Jefferies.

Analyst Will Kirkness retained his ‘hold’ recommendation and target price of 25p on the shares after ‘encouraging’ preliminary results that showed ‘underlying trading inline and as guided, albeit the low tax rate is a nice extra and should drive up consensus earnings per share to mid-single digits’.

‘The strategy remains clear and consistent, lower capital expenditure and disposals should drive enhanced free cashflow and returns next year as well as net debt to earnings reductions from an already comfortable 0.9x,’ he said.

Kirkness added that third quarter performance was challenging but UK motor margins were ‘back on track’.‘New car volumes remain challenged, although the rate of decline in UK new car registrations improved in January,’ he said. The shares jumped 12% to 23.35p yesterday.

More about this:

Look up the shares

  • BP PLC (BP.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Merlin Entertainments PLC (MERL.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Craneware PLC (CRW.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Pendragon PLC (PDG.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them


More galleries

 See all

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

Sorry, this link is not
quite ready yet