| CATEGORY: BROKER RECOMMENDATIONS SECTOR: TRAVEL & LEISURE |
Broker tips: Ladbrokes, Pearson, ICAP |
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Fri 14 Nov 2008
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LONDON (SHARECAST) - Ladbrokes is not immune from recession, JP Morgan said as it trimmed its target price on the bookmaker to 190p from 220p.
The broker cited the example of Ladbrokes’ peer William Hill, which was hit by the recession of the early 1990s.
JPM predicts that Ladbrokes will suffer the effects of rising unemployment and lower consumer spending.
However, while maintaining its ‘underweight’ rating on Ladbrokes, it remains confident on the firm’s internet operations.
“Online growth should remain robust buoyed by higher marketing spend in an increasingly competitive market,” it said.
Shares in Pearson moved higher after Credit Suisse upgraded the publishing group to ‘neutral’ from ‘underperform’ as part of a review of European publishers.
The broker noted a counter-cyclical performance in the sector.
Pearson publishes the Financial Times newspaper in the UK as well as academic textbooks in the US.
Broker coverage helped shares in interdealer broker ICAP recover from heavy falls lately.
Goldman Sachs raised its rating on the stock to ‘neutral’ from ‘sell’.
“While we still believe that the interdealer brokers face meaningful cyclical headwinds and our structural concerns remain, we believe that the market has moved to discount much of this scenario in the current price,” it said.
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