LONDON Broker Recommendation Round up-26th November 2009

Broker tips: Utilities, Mitchells & Butlers, Ricardo

On the day when Ofwat, the water regulator, released its final ruling on pricing restrictions for the water companies, Morgan Stanley has issued a timely review of the utilities sector.

Two of Thursday morning’s best performing stocks, Severn Trent and United Utilities, are named as Morgan Stanley’s least preferred stocks in the sector, while its top pick among UK stocks is National Grid.

The US bank is concerned over enduring weakness in power and gas prices. ‘If the steep power price flattens in the medium term, which we think it will, we see further downside to 2011 earnings. We think it plausible rating agencies could adopt a tougher approach, especially if power prices fall,’ Morgan Stanley said.

Full year results from cash strapped pubs group Mitchells & Butlers have rnot been enough to provoke KBC Peel Hunt or Panmure Gordon into revising their neutral positions on the stock.

Panmure Gordon expects profit before tax estimates for the current financial year to move up to around Ł139m from the current consensus of Ł134m, ‘driven by a slight increase in EBIT [earnings before interest and tax] to cŁ300m and an interest charge of Ł161m based on the group’s guidance of a 6.2% average cost of debt.’

Broker Recommendations

Date	Company Name	Ticker	Broker Name	Recommend	Price	Old Target Price	New Target Price	Broker Change
26-Nov-09	Anglo American	AAL	Collins Stewart	Hold	2,611.00p	2,900.00p	-	Reiteration
26-Nov-09	Anglo American	AAL	Ambrian	Hold	2,611.00p	2,900.00p	-	Reiteration
26-Nov-09	Associated British Foods	ABF	Goldman Sachs	Neutral	822.50p	905.00p	930.00p	Reiteration
26-Nov-09	Aviva	AV.	Citigroup	Hold	381.40p	350.00p	439.00p	Reiteration
26-Nov-09	BHP Billiton	BLT	Collins Stewart	Buy	1,873.00p	2,200.00p	-	Reiteration
26-Nov-09	BHP Billiton	BLT	Ambrian	Buy	1,873.00p	2,200.00p	-	Reiteration
26-Nov-09	BT Group	BT.A	Barclays Capital	Overweight	146.30p	169.00p	177.00p	Reiteration
26-Nov-09	Compass Group	CPG	Investec Securities	Buy	424.70p	-	-	Reiteration
26-Nov-09	Compass Group	CPG	Barclays Capital	Overweight	424.70p	415.00p	490.00p	Reiteration
26-Nov-09	Compass Group	CPG	BNP Paribas	Outperform	424.70p	430.00p	550.00p	Reiteration
26-Nov-09	Daily Mail and General Trust	DMGT	Numis	Buy	428.30p	601.00p	-	Reiteration
26-Nov-09	Daily Mail and General Trust	DMGT	Panmure Gordon	Buy	428.30p	400.00p	500.00p	Reiteration
26-Nov-09	DSG International	DSGI	Seymour Pierce	Buy	37.39p	40.00p	-	Reiteration
26-Nov-09	Kingfisher	KGF	Merrill Lynch	Buy	240.90p	265.00p	280.00p	Reiteration
26-Nov-09	Kingfisher	KGF	Bank of America	Buy	240.90p	265.00p	282.00p	Reiteration

Other Company Recommendations Today

Allied Irish Banks, Antofagasta, Antofagasta, Ashtead Group, Atkins (WS), Atkins (WS), Bank of Ireland, Care UK, Clinton Cards, easyJet, Future, Greencore Group, Intermediate Capital Group, Johnson Matthey, Johnson Matthey, Land Securities Group, London Stock Exchange Group, London Stock Exchange Group, Lonmin, Lonmin, Mitchells & Butlers, Mitchells & Butlers, Paragon Group Of Companies, PZ Cussons, Ricardo Group, Rio Tinto, Rio Tinto, Royal Bank of Scotland Group, Sage Group, Speedy Hire, System C Healthcare, Tesco, Topps Tiles, United Utilities Group, William Hill