Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

The Expert View: BSkyB, Premier Foods and Diageo

Our daily round-up of analyst recommendations and commentary, also featuring Renishaw and Shell.

Our daily round-up of analyst recommendations and commentary, featuring Shell, BSkyB, Premier Foods, Diageo and Renishaw.

If you'd 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 favourite

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Market capitalisation£136,098m
No. of shares out6,312m
No. of shares floating6,301m
No. of common shareholdersnot stated
No. of employees97000
Trading volume (10 day avg.)4m
Turnover237,577m USD
Profit before tax12,992m USD
Earnings per share2.12 USD
Cashflow per share3.79 USD
Cash per share1.41 USD

*Correct as at 30 Jan 2014

New Shell boss allays fears after profit warning

A Q4 profit warning for energy behemoth Shell (RDSB.L) has forced its new chief executive to outline the company’s strategy early.

Investec analyst Neill Morton retained his ‘hold’ recommendation on the shares and a target price of £23.00 after a drop in Q4 earnings and full-year earnings, although both were in line with expectations.

The results are the first for new chief executive Ben van Beurden who decided to update investors on the company’s priorities aimed at ‘sharper performance and rigorous capital discipline’.

Morton said: ‘Ideally, Shell’s new CEO would have preferred to present his plans for the company at the strategy update on 13 March but the Q$ profit warning has forced his hand.

‘His comments on ‘change of emphasis’ and ‘improved returns’ are admirable but strike us as a holding statement.’

At the time of writing shares were up 2.61%, or 55p, at £21.80.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Market capitalisation£13,913m
No. of shares out1,580m
No. of shares floating938m
No. of common shareholdersnot stated
No. of employees18890
Trading volume (10 day avg.)4m
Turnover£7,235m
Profit before tax£979m
Earnings per share59.70p
Cashflow per share82.74p
Cash per share88.46p

*Correct as at 30 Jan 2014

ITV tie-up readies BskyB for battle with rivals

BSkyB (BSY.L) has come out fighting against its rivals, detailing a new link up with ITV in its Q2 statement.

Jefferies analyst Jerry Dellis retained a ‘hold’ recommendation and set the target price for the shares at 860p.

The results showed dividend per share was up 9% which ‘underlines management confidence in growth outlook’ said Dellis.

He added that although Sky had stiff competition in BT it was making headway on the broadband front, targeting TalkTalk and Virgin.

Sky announced a four-year deal with ITV to exclusively distribute its new on-demand product ‘ITV On Call’ and another deal to extend Sky’s UK exclusivity on HBO content until 2020.

‘Having spent much of 2013 reacting to BT’s announcements/successes, today is the day when Sky starts to outline its fight back, in our view,’ said Dellis.

BskyB shares were trading up 3.2%, or 27p to 871.5p on Thursday afternoon.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Market capitalisation£335m
No. of shares out240m
No. of shares floating236m
No. of common shareholdersnot stated
No. of employees11720
Trading volume (10 day avg.)1m
Turnover£1,756m
Profit before tax£26m
Earnings per share10.97p
Cashflow per share49.71p
Cash per share22.19p

*Correct as at 30 Jan 2014

Premier Foods’ target price doubled as bread ‘headache’ cured

A deal to offload a 51% stake in Hovis to a US buyer will help struggling Premier Foods convince investors to take part in a rights issue, without which the company could be rendered ‘worthless’, said analysts.

Societe Generale analysts upgraded the shares to ‘hold’ from ‘sell’ after Premier’s announcement that it is selling a 51% stake in Hovis to US private equity firm The Gores Group in a deal that values the bread business at £87.5 million. ‘Bread has been a constant headache for the company,’ said the SocGen team, who nearly doubled their price target to 150p (from 80p).

The deal will leave Premier ‘focused on seven core grocery brands with strong market positions and relatively high profitability’, they said.

‘The proposed JV transaction should leave Premier with a significantly less volatile consolidated earnings stream going forward, and potentially increase the company’s appeal to existing and potential investors.’

‘This is crucial as we continue to forecast that in the absence of a rescue rights issue, Premier will breach its lending covenants in 2014, which could render the equity worthless .‘The disposal of Bread increases the probability of a successful refinancing in our view.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Market capitalisation£45,739m
No. of shares out2,511m
No. of shares floating2,495m
No. of common shareholdersnot stated
No. of employees28470
Trading volume (10 day avg.)5m
Turnover£11,433m
Profit before tax£2,485m
Earnings per share98.73p
Cashflow per share116.17p
Cash per share70.59p

*Correct as at 30 Jan 2014

Diageo loses its fizz as shares weaken

Drinks giant Diageo (DGE.L) failed to win over analysts with below expectation sales growth in its latest interim results.

Phil Carroll at Shore Capital maintained his ‘hold’ recommendation on the shares and a target price of £19.01 after the group reported organic sales of just 2%, below market expectations of 4%.

‘Diageo remains a high valuation and whilst it would be our preferred play in UK large-cap beverages, the return of risk appetite in the equity markets leaves us feeling that the rating is up with events for the time being,’ said Carroll. ‘We also expect the shares to now be weak in the short-term. This could present an opportunity but we need to assess in more detail the company’s prospects first.’

At the time of writing shares were down 3.98%, or 75p, at £18.35.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Key stats
Market capitalisation£1,371m
No. of shares out73m
No. of shares floating36m
No. of common shareholdersnot stated
No. of employees3235
Trading volume (10 day avg.)0m
Turnover£347m
Profit before tax£69m
Earnings per share95.37p
Cashflow per share123.59p
Cash per share36.55p

*Correct as at 30 Jan 2014

Numis upgrades Renishaw after favourable results

Numis has upgraded precision instruments maker Renishaw (RSW.L) from ‘reduce’ to ‘hold’ after bringing its interim numbers in line with expectations.

Anlayst Scott Cagehin placed a target price of £17.00 on the shares, despite a reduction in revenue and profitability. He is buoyed by Renishaw’s outlook for the second half of its financial year with ‘comparators easing’ that means it ‘should continue to trade well, driven by global demand for manufacturing, sophistication and automation’.

Cagehin added: ‘Given the share price reduction since our ‘reduce’ recommendation and evidence of improving trading we now move to a ‘hold’ recommendation.’

At the time of writing shares were up 5.7%, or 104p, to £19.03.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Your Business: Cover Star Club

Profile: The opportunity set that attracted Brett Williams to wealth management

Profile: The opportunity set that attracted Brett Williams to wealth management

Brett Williams is best known for helping to build some of the biggest platforms in the IFA market.He made the move over to wealth management to head SEI’s UK business earlier this year in the belief that this is where the best opportunities now lie.

Wealth Manager on Twitter