| CATEGORY: BROKER RECOMMENDATIONS SECTOR: TRAVEL & LEISURE |
Broker tips: easyJet, DSG, Enterprise Inns, Xstrata, Int'l Power |
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Wed 16 May 2007
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LONDON (SHARECAST) - Budget airline easyJet hit turbulence Wednesday as Goldman Sachs dropped the shares to 'sell' from 'neutral' on the back of last week’s interim figures.
The broker, which added the shares to its Pan-Europe Sell List, reckons the firm’s revenue momentum is now negative due to increased competition and a rise in air passenger duty.
An increase in the price target to 563p from 380p still implies 6% downside from current levels, said Goldman.
DSG International eased a touch following news of restructuring and impairment charges, but WestLB was undeterred as it raised the electricals retailer to 'add' from 'hold'.
The broker also lifted its price target on the shares to 200p on the back of what it called a solid trading statement.
DSG, formerly Dixons, warned that restructuring and impairment charges would be between £180m and £200m for a write down in Italy, the closure of PC City operations in France and the sale of Genesis Communications.
Enterprise Inns extended gains after Credit Suisse upgraded the pub owner to 'outperform' from 'underperform' this morning on hopes it will convert to real estate investment trust (REIT) status.
The group said yesterday that it was looking into how the company might be able to convert in to a REIT, prompting the Swiss broker to lift its price target to 860p from 610p.
It has slapped a fair value of 1,071p if the REIT conversion goes ahead, although that falls to 743p if it doesn’t.
Xstrata was in the blue as HSBC said ‘overweight’ with 3,200p price target, while utility International Power jumped after Morgan Stanley said ‘overweight’ and raised its target to 515p from 440p.
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