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11:55GMT 02Feb2010
Afren rises; UBS and Evo raise targets
Shares in Africa-focused oil and gas explorer Afren rise 4.7 percent, as UBS and Evolution lift their target prices following a recent update on its operations in Nigeria.
UBS raises its target to 136 pence from 126 pence, and retains a 'buy' rating, while Evolution ups its fair value to 131 pence from 115 pence, also with a 'buy' rating.
'Last Thursday's operations and subsequent strategy update contained a number of positive messages on the Ebok development and upside potential and the farm in to the OML 115 licence,' says Evolution analyst Richard Griffith.
Reuters messaging rm://sarah.young.thomsonreuters.com@reuters.net
10:54GMT 02Feb2010
St Ives up; RBS ups to 'buy'
Shares in St Ives rise 5.1 percent after RBS upgrades its recommendation on the book and magazine publisher to 'buy' from 'hold' and raises its earnings estimates.
The broker says despite the general uncertain economic climate and end markets remaining highly competitive, St Ives is benefiting from cost-cutting actions which have improved operating margins.
As a result, RBS raises 2010 pretax profit and earnings per share estimates by 22 percent to 10.5 million pounds and 7.0 pence respectively and keeps its 78 pence target price.
Reuters Messaging rm://david.brett.reuters.com@reuters.net
10:54GMT 02Feb2010
RM up on contract win; Altium 'buy'
Shares in RM Plc rise 4.3 percent after the educational software and services provider is selected by Essex County Council to provide information and communication technology (ICT) services for the County's Building Schools for the Future (BSF) programme.
Altium Securities, which repeats its 'buy' rating, notes the Essex BSF programme is one of the largest in the country, the first phase of which is estimated at 150 million pounds overall and around 13 million pounds for ICT.
'The revenue potential for RM over the course of the multiple phases of the contract could be worth in excess of 100 million pounds,' says the broker in a note.
'2010 is the year that RM expects profits from BSF to exceed bid costs for the first time; while today's win is unlikely to generate revenues this year, it should materially enhance the contribution from BSF in the years to come,' it says.
Reuters Messaging rm://david.brett.reuters.com@reuters.net
10:34GMT 02Feb2010
Pubs boosted by positive Merrill note
Shares in mid cap pub operators find good support, helping the FTSE 250 index to outperform, after BofA Merrill Lynch reiterates its positive stance on the sector following an upbeat conference which it hosted on Monday.
In a note, Merrill says the attendance and investor interest at its conference indicates the 'pub stocks are back on investor radars.'
'Overall, the outlook is brighter for the industry in 2010 with trading recovering, debt at manageable levels, regulatory concerns back to historical levels and property values having bottomed out,' the broker says.
Merrill repeats its 'buy' ratings on Enterprise Inns and Punch Taverns as both trade on 4-5 times price/earnings and at over a 60 percent discount to net asset values despite having sold pubs at book value.
The broker says it also feels that Marston's is an attractive recovery play, trading on 8 times 2011 estimates price/earnings and offering a 6.6 percent dividend yield.
Marston's shares top the mid cap gainers list, up 5.6 percent, while Enterprise Inns adds 4.6 percent, and Punch Taverns firms 1.9 percent.
Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net
10:16GMT 02Feb2010
Babcock Intl gains after trading update
Shares in Babcock International gain 4.6 percent to 586.5 pence after the engineer issues a trading update, with Seymour Pierce initiating coverage on the stock with a 'buy' rating and 670 pence target price.
Babcock says third-quarter trade has been strong, driven by robust performances at its marine and defence units, and that it is confident on its full-year prospects.
Seymour Pierce says in a note that recent underperformance has resulted in Babcock's relative price earnings ratio returning to pre-2003 levels, despite the obvious improvement in quality of earnings and prospects for future growth.
The broker says it accepts there will be a reduction in public expenditure on defence, and notes that large capital projects are likely to be scaled back, delayed or cancelled.
'This could adversely impact on the current order book, but it is likely to be offset by more outsourcing elsewhere as well as expansion in the civil and international businesses,' the broker says in a note.
Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
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