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The Expert View: Tullow Oil, Nautical Petroleum and Premier Foods
A round-up of analyst notes, including their take on Misys and Berkeley Group Holdings.
by Harry Brooks on Mar 20, 2012 at 05:01
We’ve rounded up some of the best comment from top analysts to give you their views on Tullow Oil, Nautical Petroleum, Premier Foods, Misys and Berkeley Group.
Galvan slaps 'strong buy' on Tullow Oil
Andrew Gibson, head of research at Galvan, has placed a 'strong buy' recommendation on Africa-focused oil explorer Tullow Oil (TLW.L) based on what he described as 'solid gold' fundamentals at the group and expectations of more discoveries in the year ahead.
Last Wednesday Tullow announced an almost 500% increase in profits for 2011, which was boosted by a realised oil price of $108 per barrel, up 38% from $78 per barrel in 2010.
'Ongoing good news and fresh oil discoveries in Africa just keep rolling in at Tullow Oil,' Gibson said, 'while the solid gold fundamentals are backed by a near 500% rise in profits last year. On this basis, the Galvan Research team view the shares as a very strong buy opportunity, and we tip the stock to head for 52-week highs in the coming weeks.'
As well as his positive stance on the group's fundamentals, Gibson said the technical picture indicates that the shares could go as high as £18.
Shares in the group closed at £15.26 on Monday, down 2.00p or 0.13%.
If you'd like to learn more about the company, watch our video on Tullow's prospects in the year ahead.
Peel Hunt lifts Nautical Petroleum's target price on Kraken promise
Werner Riding, analyst at Peel Hunt, has ramped up his target price for AIM-listed oil and gas explorer Nautical Petroleum (NPE.L) following half-yearly results that confirmed the commercial prospects of the group's Kraken acreage in the North Sea.
Last week saw Nautical Petroleum sell a 25% stake of Kraken to Enquest, and this will cover the company's share of development costs. Riding said that development of the prospect is going well, with preparations under way to submit a final development plan by the summer.
'We maintain our buy recommendation and adjust our target price upwards to 525p/share,' Riding said, having lifted his target from 440p previously. Following the results analysts at Investec and Numis also restated their 'buy' recommendations.
Shares in the group closed at 338.75p on Monday, up 2p or 0.59%.
More updates from Peel Hunt:
- Iomart (IOM.L), 'buy' (unchanged), target price: 170p (was 160p)
Investec puts Premier Foods under review as profits slump
Martin Deboo, analyst at Investec Securities, has placed his target price for St Albans-headquarted food maker Premier Foods (PFD.L) under review following disappointing 2011 results.
Trading was worse than Deboo had expected, with the group declaring an overall pre-tax loss of £259.1 million in 2011 - compared with a pre-tax profit of £28.5 million in 2010 - as a result of having to write down the value of its Hovis brand.
Deboo said that the key question now is the cost of the proposed refinancing of £1.2 billion of the company's debt, which was confirmed on Monday. 'The details are complicated and we will want to review in more detail,' Deboo said, adding that although the refinancing would buy some time financing costs will soon begin to rachet up, giving the management little time to turn around the business.
Shares in the group closed at 11.50p on Monday, down 0.5p or 4.17%.
More updates from Investec Securities:
- Misys (MYS.L), 'hold' (unchanged), target price: 270p (under review)
- Nautical Petroleum (NPE.L), 'buy' (unchanged), target price: 600p (was 650p)
Singer expects £1.4 billion Misys takeover to win investor approval
Tintin Stormont, analyst at Singer Capital Markets, has retained his 'fair value' stance on banking software maker Misys (MSY.L) after the group recommended that investors accept a £1.27 billion takeover offer from private equity group Vista.
Bidco, an investment vehicle indirectly owned by Vista funds, has offered 350p per share for Misys, valuing the company at £1.27 billion.
On the offer, Stormont said: 'We believe this is at the lower end of expectations but market conditions remain tough and an accompanying third-quarter update showing deterioration in trading is a good reminder of that.' The statement showed that revenues for the three months to 29 February had fallen 12%, and Stormont said this makes it more likely that investors will approve the proposed takeover.
Shares in the group closed at 355.46p on Monday, up 25.96p or 7.88%.
Collins Stewart backs Berkeley Group
Alastair Stewart, analyst at Collins Stewart, has retained his 'buy' recommendation on Surrey-based housebuilder Berkeley Group Holdings (BKG.L) following encouraging quarterly results.
Over the period between 1 November and 29 February the group said that demand for residential property in London and the South East had been 'resilient'. The company's statement said that 'Despite the wider economic challenges, Berkeley has delivered a robust trading performance over the period, most noticeably through the further growth in cash due on forward sales which currently exceed £1 billion compared with £813 million at 1 May 2011.'
The statement also said that it is on track to double its pre-tax profits to £220 million by 30 April 2013 - two years earlier than originally planned.
However, Stewart urged investors not to get too carried away by this announcement: 'management are past masters at expectation management,' he said. The analyst concluded by saying that the statement was 'fairly positive' overall, but he warned that any clampdown on foreign ownership of high-end property would hit the group.
Shares in the group closed at £13.67 on Monday, down 26.40p or 1.89%.
More about this:
Look up the shares
- Misys PLC (MSY.L)
- Nautical Petroleum PLC (NPE.L)
- Premier Foods PLC (PFD.L)
- Barclays PLC (BARC.L)
- Berkeley Group Holdings PLC (BKGH.L)