LONDON Broker Recommendation Round up

Broker tips: Hays, easyJet, Hargreaves Lansdown

Preliminary results from recruitment firm Hays were predictably downbeat but broker Charles Stanley said the excellent cash flow and the reduction in net debt provided bright spots.

‘In the final quarter of its financial year, group net fees declined by 40% on a LFL [like for like] basis. Therefore, Hays starts the new financial year on a weak footing. Also, the interest charge is likely to increase due to pensions and refinancing in early 2010,’ Charles Stanley analyst Tony Shephard notes.

Charles Stanley is trimming its full-year profit estimate for 2010 from Ł100m to Ł90m but expects things to pick up in 2011, when it expects Hays to make pre-tax profit of Ł111m.

The stock has some appeal as a income share with a yield of 5.8% ‘but with further difficult trading ahead, the dividend will be uncovered by earnings in the coming year,’ the broker believes.

However, the outlook may have improved enough by the next set of results, due in February 2010, for the board to risk maintaining the pay out.

Broker Recommendations

Date	Company Name	Ticker	Broker Name	Recommend	Price	Old Target Price	New Target Price	Broker Change
03-Sep-09	Arriva	ARI	Royal Bank of Scotland	Buy	470.00p	465.00p	540.00p	Reiteration
03-Sep-09	Ashtead Group	AHT	Royal Bank of Scotland	Buy	80.05p	84.00p	110.00p	Reiteration
03-Sep-09	Associated British Foods	ABF	Citigroup	Hold	796.00p	830.00p	-	Reiteration
03-Sep-09	Bovis Homes Group	BVS	Numis	Hold	506.00p	517.00p	-	Reiteration
03-Sep-09	BP	BP.	Deutsche	Buy	535.00p	585.00p	600.00p	Reiteration
03-Sep-09	DSG International	DSGI	Citigroup	Hold	28.68p	29.00p	-	Reiteration
03-Sep-09	DSG International	DSGI	Deutsche	Hold	28.68p	23.00p	30.00p	Reiteration
03-Sep-09	Go-Ahead Group	GOG	Panmure Gordon	Buy	1,349.00p	1,400.00p	-	Reiteration
03-Sep-09	Go-Ahead Group	GOG	Shore Capital	Hold	1,349.00p	-	-	Reiteration
03-Sep-09	Hays	HAS	Seymour Pierce	Outperform	98.70p	120.00p	-	Reiteration
03-Sep-09	Hays	HAS	Panmure Gordon	Hold	98.70p	95.00p	-	Reiteration
03-Sep-09	Pennon Group	PNN	JP Morgan	Neutral	462.10p	530.00p	520.00p	Reiteration
03-Sep-09	Persimmon	PSN	Royal Bank of Scotland	Hold	482.90p	340.00p	440.00p	Reiteration
03-Sep-09	Reed Elsevier	REL	Panmure Gordon	Buy	438.70p	630.00p	-	Reiteration
03-Sep-09	Spectris	SXS	Royal Bank of Scotland	Buy	684.00p	580.00p	740.00p	Reiteration

Other Company Recommendations Today

Abbey Protection, Admiral Group, Anite Group, Autonomy Corporation, Baqus, Bovis Homes Group, BowLeven, BowLeven, Carnival, Debenhams, Fidessa, Filtrona PLC, Forth Ports, Hargreaves Lansdown, Hargreaves Lansdown, HMV Group, HMV Group, HMV Group, Intermediate Capital Group, KBC Advanced Technologies, Kenmare Resources, Kofax, London Stock Exchange Group, Lonmin, Marks & Spencer Group, Mcbride, Morrison (Wm) Supermarkets, Morse, Next Fifteen Communications, Paragon Group Of Companies, Sainsbury (J), SEGRO, Ten Alps, Tesco