Broker tips: BP, BAE, Mears
Corporate finance and broking house Hanson Westhouse said third quarter figures from BP were ‘solid’, despite the oil giant seeing a sharp reduction in adjusted replacement cost profit.Replacement cost profit, excluding non-operating items and fair value accounting effects, was $4.7bn, well ahead of expectations of $3.2bn, Hanson said, with higher production and lower costs mitigating the effects of lower oil and gas prices.
‘Meanwhile, Refining and Marketing did significantly better than expected despite the collapse in refining margins,’ the broker said.
As Hanson Westhouse predicted, the third quarter divi was held, and with the cost cutting programme going ‘from strength to strength’ the broker has reiterated its ‘buy’ recommendation.
Seymour Pierce is another broker banging the drum for BP, saying the results were ‘materially better than expected.’ Though the broker had hoped the oil company would ratchet up the quarterly dividend from 14 cents to 14.5 cents, the company’s stated commitment to maintaining its pay out should ally general concerns about the future of the dividend.
Broker Recommendations
| Date | Company Name | Ticker | Broker Name | Recommend | Price | Old Target Price | New Target Price | Broker Change |
|---|---|---|---|---|---|---|---|---|
| 27-Oct-09 | ARM Holdings | ARM | Panmure Gordon | Sell | 150.80p | 135.00p | - | Reiteration |
| 27-Oct-09 | ARM Holdings | ARM | Astaire Securities | Hold | 150.80p | - | - | Reiteration |
| 27-Oct-09 | Associated British Foods | ABF | Deutsche | Hold | 848.00p | 680.00p | 840.00p | Reiteration |
| 27-Oct-09 | BAE Systems | BA. | Nomura | Buy | 319.00p | 450.00p | - | Reiteration |
| 27-Oct-09 | BP | BP. | ING Barings | Buy | 588.60p | 635.00p | - | Reiteration |
| 27-Oct-09 | BP | BP. | Charles Stanley | Accumulate | 588.60p | - | - | Upgrade |
| 27-Oct-09 | BP | BP. | FinnCap | Buy | 588.60p | - | - | Reiteration |
| 27-Oct-09 | British Airways | BAY | Astaire Securities | Buy | 198.20p | - | - | Reiteration |
| 27-Oct-09 | GKN | GKN | UBS | Buy | 114.40p | 135.00p | 140.00p | Reiteration |
| 27-Oct-09 | GlaxoSmithKline | GSK | Astaire Securities | Buy | 1,260.00p | - | - | Reiteration |
| 27-Oct-09 | Pearson | PSON | UBS | Buy | 844.00p | 840.00p | 940.00p | Reiteration |
| 27-Oct-09 | Standard Chartered | STAN | Citigroup | Hold | 1,570.00p | 1,450.00p | 1,550.00p | Reiteration |
| 27-Oct-09 | United Business Media | UBM | Canaccord Adams | Hold | 487.30p | 508.00p | 490.00p | Reiteration |
| 27-Oct-09 | WPP Group | WPP | Citigroup | Neutral | 557.00p | 500.00p | 625.00p | Reiteration |
| 27-Oct-09 | WPP Group | WPP | JP Morgan | Neutral | 557.00p | 500.00p | 625.00p | Reiteration |
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