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: Shire, Whitbread and IQE

Our daily roundup of analyst commentary on shares, also including B&M and NWF.

by Michelle McGagh on Dec 21, 2017 at 05:00

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£35,235m
No. of shares out910m
No. of shares floating909m
No. of common shareholdersnot stated
No. of employees23906
Trading volume (10 day avg.)3m
Turnover8,516m USD
Profit before tax2,573m USD
Earnings per share0.58 USD
Cashflow per share2.00 USD
Cash per share0.44 USD

US tax reform could push forward Shire takeover, says Jefferies

Takeover speculation pushed up Shire (SHP) on Tuesday and Jefferies believes US tax reforms could be the catalyst for a bid.

Analyst David Steinberg retained his ‘buy’ recommendation on the shares, referencing reports US and European pharmaceutical names were circling Shire, whose shares recently fell to 15-month lows.

He reduced his price target to £49, down from £52.50. The shares fell 23.5p to £38.95 yesterday.

‘In our view, US tax reform legislation – which includes far lower US corporate tax rates and access to ex-US cash via repatriation – could drive a mergers and acquisitions reacceleration in the broader healthcare arena,’ said Steinberg.

‘This dynamic could potentially result in another bid for Shire… we have long had Shire on our “takeout” list. That said, we think the potential group of buyers to be very limited.’

Key stats
Market capitalisation£7,064m
No. of shares out183m
No. of shares floating180m
No. of common shareholdersnot stated
No. of employees42044
Trading volume (10 day avg.)1m
Profit before tax£806m
Earnings per share230.89p
Cashflow per share348.30p
Cash per share34.37p

Berenberg downplays Whitbread headwinds

Whitbread (WTB) is an ‘attractive growth story’ and Berenberg says the headwinds facing the Costa Coffee and Premier Inn owner should not be of too much concern.

Analyst Stuart Gordon retained his ‘buy’ recommendation and target price of £49.00 on the stock, which was trading flat at £38.62 at the time of writing.

He said Whitbread was ‘an attractive growth story that is being affected by two significant headwinds – weak like-for-like growth at Costa and the uncertainty about Brexit’.

‘While not wishing to trivialise either, we remain convinced that in the case of Costa, the ongoing structural growth is better than the company is being given credit for and that despite the recent attentions of an activist investor it would need a significant offer to make a sale in the interests of shareholders,’ he said.

Key stats
Market capitalisation£969m
No. of shares out686m
No. of shares floating651m
No. of common shareholdersnot stated
No. of employees475
Trading volume (10 day avg.)10m
Profit before tax£30m
Earnings per share2.72p
Cashflow per share4.28p
Cash per share0.73p

Peel Hunt: IQE at start of an upgrade cycle

Microchip manufacturer IQE (IQE) is at the start of an upgrade cycle, according to Peel Hunt.

Analyst Andrew Shepherd-Barron retained his ‘buy’ recommendation and target price of 188p on the shares, which fell 8.9% to 141p yesterday.

‘IQE is beginning what we see as a steady upgrade cycle, driven by multi-customer demand and growth investment,’ he said.

‘The quality of earnings is much improved which, together with finance no longer being an issue, means that investors can focus on the outlook.’

He added that that there was potential for the target price to move higher ‘if higher scenarios come into view, on the back of end client success and the continuing difficulty that competitors are having in matching IQE for productivity and cost’.

Key stats
Market capitalisation£4,123m
No. of shares out1,001m
No. of shares floating800m
No. of common shareholdersnot stated
No. of employees26057
Trading volume (10 day avg.)4m
Profit before tax£238m
Earnings per share14.29p
Cashflow per share17.00p
Cash per share15.60p

B&M offering long-term growth, says Liberum

Liberum predicts long-term growth at B&M (BMEB) as it believes the discount chain has a ‘superior, disruptive’ model.

Analyst Adam Tomlinson retained his ‘buy’ recommendation and increased the target price from 380p to 475p. The shares edged a penny higher to 411.6p yesterday.

‘B&M offers exposure to a self-funded, integrated, high-growth and cash generative business, which is one of the highest quality names in UK retail,’ he said.

‘Its superior, disruptive multi-price model is supporting outperformance versus peers. The group benefits from higher average transaction values in prosperous times, while footfall and volumes rise in a more uncertain climate.’

He added that management had a track record of navigating ‘exogenous shocks’ and there were ‘multiple drivers of long-term growth’.

Key stats
Market capitalisation£80m
No. of shares out49m
No. of shares floating23m
No. of common shareholdersnot stated
No. of employees901
Trading volume (10 day avg.)m
Profit before tax£11m
Earnings per share11.31p
Cashflow per share19.94p
Cash per share2.06p

NWF management has rebalanced the business, says Shore Capital

Agricultural and distribution business NWF Group (NWF) has reported an ‘encouraging’ update and is trading at a discount, according to Shore Capital.

Analyst Phil Carroll reiterated his ‘buy’ recommendation on the stock, which rose 1.1% to 166.8p yesterday.

He said first-half trading was ahead of the prior year overall, although performance was below last year in the food division.

But he noted ‘efficiency is improving with robust outbound load demand’ while the feeds division had seen an ‘improved performance with the benefits of the capital investment coming through aided by the recovering dairy market’.

‘We believe management has done well in rebalancing this business to some extent to help mitigate seasonal demand patterns,’ said Carroll.

‘Overall, an encouraging update from NWF which trades on a sector discounted valuation of 11.3x.’

More about this:

Look up the shares

  • Shire PLC (SHP.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Whitbread PLC (WTB.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
  • B&M European Value Retail SA (BMEB.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • NWF Group PLC (NWF.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