Broker tips: Avon Rubber, Centamin, G4S
Analysts at Berenberg raised their target price on engineering and manufacturing group Avon Rubber from 3,510.0p to 4,065.0p on Thursday.
Berenberg said it suspects very few people would mark 2020 down as a year to remember. However, in Avon's case, it said the year had been one of "the most transformational" in the company's long history.
On the other hand, while Berenberg said the business was also well set for a strong 2021, it continues to struggle with the group's valuation which, at 35.2 times its September-2022 price-to-earnings ratio, it stated was "materially ahead" of all comparable metrics.
"Hence, with vaccine news providing greater hope for some value-cyclical rebound, we think there is greater near-term value elsewhere," said the analysts, which also reiterated their 'hold' rating on the stock.
Bank of America has upgraded Centamin to 'buy' after new chief executive Martin Horgan outlined his three-year outlook for the gold miner.
The US bank, which previously had a 'neutral' rating on the London-listed stock, said the firm was now targeted to produce 405,000-500,000 ounces at all-in sustaining costs below $900 per ounce from 2024.
It continued: "Production should ramp up from the 2022 full year, costs reduce thanks to economies of scale and cost savings initiatives. Capex to increase in the short term, as a result of higher waste stripping; this should provide greater flexibility in the mine plan.”
BofA also pointed to Centamin's strong, debt-free balance sheet, and to a management focus on stabilising both production profile and cash flow generation.
As a result, BofA reduced its forecasts for earnings before interest, tax, depreciation and amortisation for the current year by 3%, but increased them by 3% for the 2021 full-year to $448.0m.
RBC Capital Markets has called GardaWorld’s latest £3.7bn offer for G4S fair, as it downgraded its rating on the outsourcing giant.
The Canadian security services firm made its 235.0p per share final offer on Wednesday after its initial hostile approach of 190.0p was rejected.
RBC said it viewed the increased offer as fair, and that it would now be looking to lock in some profits.
Analyst Andrew Brooke said: "While we cannot rule out a competing bid from Allied, we would not expect it to be materially higher than the current share price.
"We thus see risk/reward as more fairly balanced and move down to 'sector perform', increasing our price target to 235.0p. We would be locking in some profit here."
Previously, RBC had a rating of 'outperform' on the blue-chip and a price target of 215.0p.