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Broker round-up: Centrica, Rolls-Royce, Gemfields, Planet Payment, Tertiary Minerals ...

Broker round-up: Centrica, Rolls-Royce, Gemfields, Planet Payment, Tertiary Minerals ...

British Gas owner Centrica (LON:CNA) has been the worst performing utility share over the past six months, but it’s time to stop selling argues Credit Suisse.

Upgrading its stance to ‘neutral’ from ‘underperform’, the Swiss broker suggests the risks are now reflected in the shares and there could even be some good news on the horizon for its production assets through higher gas prices.

Credit Suisse also suggests an energy price freeze is less-likely after the election as the Coalition Government moved some costs to general taxation. This should take energy out of media headlines and reduce the market discount on British Gas.

If Labour wins the next election it would need move more from bills to general taxation, in the broker’s view. An improving economy, meanwhile, would help the downstream businesses and services arm.

The target price is now 310p and Credit Suisse sees the eye of the storm now moving away from Centrica.

Rolls-Royce (LON:RR.) shares still don’t appeal to number crunchers at Deutsche Bank despite the recent share price fall. “We have a number of overhanging concerns which in our view are still not adequately factored into valuation,” said analyst Benjamin Fidler.

Fidler cuts his target price from 1,090p to 860p to reflect these issues and sticks firmly by his ‘sell’ recommendation. On Monday, Rolls’ shares rose as it confirmed it would buy out German carmaker Daimler’s stake in their power systems joint venture.

Emerald and ruby miner Gemfields (LON:GEM) has "substantial" growth potential across its assets, reckons Investec, which has lifted its rating to 'buy' from 'hold'.

The business  continues to evolve, highlighted by the interim figures, which reflected the integration of the Faberge business as well as progressing the mining asset base, which consists of the operating Kagem mine, the Montepuez ruby mine and other assets, said analyst Marc Elliott. Investec has lifted its target price to 39.6p compared to 36p previously.

Electronic payment processing firm Planet Payment (LON:PPT, NASDAQ:PLPM) is embarking on the path to strong growth. That’s the view of City outfit Canaccord Genuity, which is upbeat on the company’s prospects following last week’s annual results.

Having advised the market late in February that it expected to break even or register a small post-tax loss for 2013, the company posted a small profit of US$22,006, versus of loss of US$4.45mln in 2012. But Canaccord thinks this could be just the beginning and repeats its ‘buy’ recommendation and 225p target price.

Senior Engineering (LON:SNR) is buying UPECA Technologies, a Malaysia-based manufacturer of high-precision engineered components for the aerospace and energy markets. It look a sensible way to bulk up its Asian aerospace and oil & gas exposure while diversifying its manufacturing footprint, said Investec, which raised it price target to 310p but kept its rating as a ‘hold’.

Tertiary Minerals' (LON:TYM) final results from the Phase 2 drill programme at its MB Project confirmed its potential to be a major fluorspar deposit, said Northland.

The company will now begin work on the maiden resource estimate for the project but with mineralisation continuing to remain open in all directions following the end of Phase 2, there is significant upside potential on any initial resource.

Cantor Fitzgerald added Tertiary expects to start a scoping study by year end based on the new resource and upcoming metallurgical testwork. It has a ‘buy’ recommendation and 16p target price.


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