Broker tips: Tharisa, Blue Prism, Centamin, Aveva

Analysts at Berenberg slightly lowered their target price on resources group Tharisa from 200.0p to 190.0p on Thursday, citing a mixture of higher royalties and FX-related headwinds.

Berenberg stated Tharisa, which reported first-half revenues of $314.0m, ahead of its estimates of $300.0m on better platinum group metals revenues, and an underlying earnings beat of $124.0m, remains "cheap" and offered "clear upside", leading it to retain its 'buy' recommendation on the stock.

However, cash flow from operations of $105.0m was below its $112.0m estimate, driven mainly by a working capital build of $18.0m due to higher commodity prices.

The German bank noted this was offset by lower cash tax paid, which came in at $3.0m, below its $11.0m estimate, while capex of $39.0m was also below its $48.0m figure and cash flow from financing of $44.0m was slightly above its expectations for a print of $41.0m.

"We adjust our model for the H1 results; the company has generated meaningful profits and this has used up tax losses, which increases taxes and royalties as a result," said Berenberg.

Canaccord Genuity upgraded its view on shares of Blue Prism from 'hold' to 'speculative buy', telling clients the shares were undervalued, particularly taking into account the company's prospects for fast sales growth.

According to the Canadian band, trading on an enterprise value-to-sales multiple of 4.5, against the sector average of 5.5, the shares were "substantially" undervalued relative to its peers.

Canaccord, which also noted forecast sales growth was "materially above", said the firm's customer base should allow it to grow revenues at a double-digit compound annual rate of growth over the next few years.

However, the analysts said Blue Prism was not without its flaws, including its prioritisation of sales over profits, cash-consumptive operations and lower value-added software in comparison to other subsectors.

Looking out to the medium-term, Canaccord, which kept its 1,250.0p target price on the stock unchanged, also flagged potential risk from lower-cost rivals entering the market, including Microsoft.

Analysts at Liberum started coverage of Centamin shares at 'sell', arguing that while its "strong" balance sheet gave it the resources to finance the turnaround of its flagship gold mine at Sukari, the shares were overvalued at present.

Said balance sheet strength would also allow the miner to maintain its dividend throughout the process, Liberum stated.

However, the 450,000-500,000 ounce target for annual production assumed underground resource upgrades to reserves and "sizeable" satellite ore bodies had to be found in order to materially prolong Sukari's life into the 2030s.

In any case, Liberum, which issued the firm with an 82.0p target price, said using an 8% discount rate and assuming $46 per ounce of resource at its West Africa assets, then at the current market price of $1,800 per ounce of gold, the outfit's estimated net asset value was 85.0p per share, with a 30% potential downside.

Barclays upgraded its stance on shares of industrial software group Aveva on Thursday, to 'overweight' from 'neutral', lifting the price target to 4,060.0p from 3,730.0p.

"While the unexpected CEO change has added some risk to the narrative, it has also exacerbated the underperformance of the stock and created an attractive entry point, in our view," the bank said.

Barclays said it had considered the strategic opportunity created by the combination of Aveva and OSIsoft. "With both businesses emerging strongly from the Covid disruption, we model an acceleration in growth and expect this outlook to come across clearly at the upcoming capital markets day, resulting in upside into the event and beyond," it said.

Barclays said it sees the ongoing transition to subscription as more of an opportunity for the group than a risk.

"In an upside scenario, if the market were to shift its focus to the mid-term opportunities of a transition, we see upside to £45 or more than 30%."