Citywire for Financial Professionals
Share this page:
Stay connected:

 

Citywire printed articles sponsored by:


View the rest of this gallery online at http://citywire.co.uk/money/gallery/a881467

The Expert View: Randgold, Berkeley and Legal & General

Our daily roundup of analyst commentary on shares, also including Hammerson and Rank.

by Michelle McGagh on Feb 10, 2016 at 05:00

If you would like to receive news alerts on any of the stocks mentioned, click on the star icons below to add them to your favourites.
Key stats
Market capitalisation£5,566m
No. of shares out93m
No. of shares floating92m
No. of common shareholdersnot stated
No. of employees2548
Trading volume (10 day avg.)1m
Turnover694m USD
Profit before tax131m USD
Earnings per share1.40 USD
Cashflow per share2.71 USD
Cash per share1.59 USD

*Correct as at 9 Feb 2016

Randgold valuation favourable to peers

Africa-focused gold miner Randgold Resources (RRS) is showing strength in a difficult market, according to Barclays analyst Amos Fletcher.

Fletcher reiterated his ‘overweight’ recommendation and target price of £48.00 on the shares, which fell 1.6% to £59.05 yesterday.

‘Randgold delivered another strong operational and cashflow performance in Q4 with production rising 7% quarter-on-quarter to a new record, cash costs down 10% quarter-on-quarter and strong free cashflow generation,’ he said.

‘The investment case remains on track: we believe Randgold offers a combination of rising production driven by higher grades, declining capex, rising net cash and as a result strong dividend upside potential. The company should be in a position to fund its next mine development and pay a high single-digit medium-term dividend yield. This compares favourably to the UK mining peer group in virtually all respects, while trading at a 14% 2016 price/earnings ratio discount to Fresnillo.’

Key stats
Market capitalisation£4,219m
No. of shares out137m
No. of shares floating125m
No. of common shareholdersnot stated
No. of employees2045
Trading volume (10 day avg.)1m
Turnover£2,120m
Profit before tax£424m
Earnings per share276.98p
Cashflow per share278.74p
Cash per share315.32p

*Correct as at 9 Feb 2016

Go long, not short on Berkeley

Investors may be betting against house builder Berkeley Group (BKGH) over fears of an over-heating London property market but Jefferies says investors should keep buying the stock.

Jefferies analyst Anthony Codling retained his ‘buy’ recommendation and target price of £46.50 on the shares, which fell 1.3% to £30.90 yesterday.

‘Perhaps the box office hit The Big Short is spurring investors to short Berkeley Group in what some perceive as an overheated London housing market,’ he said.

‘We would not short Berkeley Group as its investment case is based on strong foundations, solid group and physical properties rather than intangible synthetic mortgage products. We still believe cash is king and Berkeley will meet its promises to return cash to shareholders; go long, not short.’

Key stats
Market capitalisation£4,256m
No. of shares out784m
No. of shares floating780m
No. of common shareholdersnot stated
No. of employees419
Trading volume (10 day avg.)2m
Turnover£207m
Profit before tax£699m
Earnings per share95.66p
Cashflow per share-9,999,999.00p
Cash per share3.65p

*Correct as at 9 Feb 2016

Hammerson: positive news from Irish division

Deutsche Bank analysts met with the Irish division of property developer Hammerson (HMSO), which is confident of securing new properties this year.

Deutsche Bank analyst Oliver Reiff retained his ‘buy’ recommendation and target price of 775p on the shares, which edged 9p lower to 540p yesterday.

‘The Irish portfolio of loans secured against prime retail assets in Dublin represents c.10% of Hammerson’s assets. Management remain confident in taking ownership of the assets (in particular the Dundrum shopping centre),’ he said.

‘We see this acquisition as strategically logical as it gives Hammerson exposure to prime shopping locations in a high density area.’

He added that ‘competitor threats [are] limited [in the] medium term’ and ‘the site next to Dundrum is likely to be used for retail extension and/or residential’.

Key stats
Market capitalisation£12,115m
No. of shares out5,949m
No. of shares floating5,880m
No. of common shareholdersnot stated
No. of employees9005
Trading volume (10 day avg.)25m
Turnover£51,517m
Profit before tax£985m
Earnings per share16.54p
Cashflow per share17.71p
Cash per share383.79p

*Correct as at 9 Feb 2016

L&G portfolio breakdown allays investment fears

Insurer Legal & General (LGEN) has provided details of its bond portfolio in order to allay market fears.

Shore Capital analyst Eamonn Flanagan reiterated his ‘buy’ recommendation but does not have a target price on the stock. The shares were flat at 202.4p yesterday.

‘In a move to allay fears in the market over its bond portfolio, L&G has set out an up-to-date split of its book as at the end of December 2015. The portfolio amounted to c.£39 billion at the end of the year, down from £40.7 billion at the end of 2014. By credit rating, c.4% was AAA, 28% was AA, 33% was A, BBB accounted for 31% and the balance was BB or below – to us, this is a sign of the level of security within the portfolio and the conservative approach taken by the fund managers,’ he said.

‘We view the economic basis underlying the investment case for L&G to be robust and retain our expectations for an 18% increase in the 2015 dividend to 13.25p.’

Key stats
Market capitalisation£1,000m
No. of shares out391m
No. of shares floating170m
No. of common shareholdersnot stated
No. of employees10721
Trading volume (10 day avg.)m
Turnover£701m
Profit before tax£59m
Earnings per share15.10p
Cashflow per share25.93p
Cash per share22.93p

*Correct as at 9 Feb 2016

Rank Group on a winning streak

Gambling company Rank Group (RNK) is delivering improvements and catalysts are in place for a re-rating.

Peel Hunt analyst Nick Batram retained his ‘add’ recommendation and increased his target price from 289p to 292p. The shares fell 1.8% to 255.4p yesterday.

‘The H1 results demonstrated solid underlying progress,’ he said. ‘The straight-forward strategy, laid out by chief executive Henry Birch, is already delivering improvements across the business and this has been recognised by the rerating.

‘The next stage of this process will see the new digital platform launch (by end of March) with further upside presented by potential M&A. We continue to see good long-term upside and retain our “add” recommendation.’

More about this:

Look up the shares

  • Berkeley Group Holdings PLC (BKGH.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Legal & General Group PLC (LGEN.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Hammerson PLC (HMSO.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Rank Group PLC (RNK.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Randgold Resources Ltd (RRS.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Archive

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