Broker tips: Tullow Oil, Icap

That came on the heels of their recent reduced forecasts for the price of oil, although the impact of that was expected to be partially offset by a moderately lower pound.

“Our core NAV falls to ~620p (from ~670p) with the rest of the delta to our target price coming from exploration. The risk/reward now starts to look more favourable, particularly if you believe in further value creation from Kenya; these non-Wall Street barrels (e.g., Jubilee, Kenya etc) can be had (as an investor or as an oil company given the inability for many to add sufficient barrels organically) at relatively attractive prices now.”

However, the Swiss broker cautioned that there were four factors worth remembering: (1) Majors appear to be focused for now on the 'new religion' of capital discipline and restructuring their businesses, (2) US oil companies are selling international assets, (3) NOCs are absent for now, and (4) the uncertain oil price outlook. It is important that the SUP/DEM fundamentals establish a firm floor in the $90s stability is welcome.

The recommendation on Tullow was kept at ‘neutral’.

On the last day of the week Credit Suisse also reiterated its ‘underperform’ recommendation on Icap stock, while keeping its price target at 370p.

Nevertheless, it did trim its fiscal year 2015 earnings per share forecast by 7% so as to reflect slightly weaker revenues in the first half and an FX ‘headwind’ on costs.

On the other hand, it added that there were some positive signals. In particular: (1) a rebound in EBS ADV (strongest month since Jun-13, helped by strong progress from the newer EBS Direct platform; (2) better than expected growth in the Post Trade and Information division; and (3) in-line progress on the cost efficiency programme, with broker headcount being reduced by 265.

Even so, it was still “too early to get positive: clearly the macro volatility in September - particularly in FX - provided a helpful tailwind.”