Proactive Investors - Run By Investors For Investors

Broker spotlight – ITV, Kentz, Ocado, Severn Trent, Imagination Technology, Rose Petroleum

Broker spotlight – ITV, Kentz, Ocado, Severn Trent, Imagination Technology, Rose Petroleum

ITV (LON:ITV) is the “king of content” according to JP Morgan Cazenove, which sees it as the best in class free-to-air broadcaster.

Analyst Filippo Pietro Lo Franco says ITV’s fast growing content division, which has the rights to programmes such as Downton Abbey, is being undervalued by investors.

With price-to-earnings of 13.6x based on 2014 estimates, the analyst reckons ITV is too cheap.

JPM Cazenove today repeats an ‘overweight’ rating for ITV, with a 232p price target.

Jefferies upgraded its price target for grocery delivery company Ocado (LON:OCDO) to 330p to reflect the strong ramp-up in margins and international potential. 

There are risks from changes in the Waitrose relationship and challenges from alternative food online models, which makes the shares look fully priced.

Goldman Sachs has downgraded UK water companies United Utilities (LON:UU.) and Severn Trent (LON:SVT) to ‘neutral’ from ‘buy’. 

Shanks though gets an upgrade to buy as Goldman regards it as  a takeover target due to its low rating, relatively small size and ongoing M&A activity in the sector Europe-wide. 

The sale of Kentz (LON:KENZ) to Canada’s SNC-Lavalin makes strategic sense, says VSA Capital analyst Marc Anis-Hanna, who described the London listed oil services firm as “very appealing”.

Yesterday, SNC offered 935p share to buy the company – the takeover was pitched at a 33% premium to the previous close.

“We believe this transaction makes strategic sense, as it creates geographical synergies between the two companies, with SNC having a strong presence in North America and KENZ an important footprint in the Middle East and Asia Pacific,” Anis-Hanna said.

Investec reckons Imagination Technology (LON:IMG) is turning a corner at last, but the broker is not yet bullish enough to raise its ‘hold’ rating or 250p price target, because of a concern over the firm’s core royalties.

Nevertheless, analyst Roger Phillips said: “Full year 2014 results are positive overall due to a beat on licences, suggesting an excellent H2, and a 9% beat on adjusted EBIT suggesting opex cost control. 

“After three major downgrades in the last 15 months, Imagination looks to have turned the corner on forecast expectations at last, and with short interest still heavy, further squeezes in the share price looks likely.”

Allenby Capital’s attention was on small cap shale explorer Rose Petroleum (LON:ROSE), which according to the broker may rapidly make a transition from junior to mid-tier E&P status – by unlocking two new shale plays.

Analyst Peter Dupont believes Utah shale acreage, acquired at just US$110 per acre, could plausibly be worth around US$2,000 an acre following initial de-risking activities – that would give the projects a US$344mln (£208mln) price tag.

Not getting too carried away too soon, the broker says Rose is currently worth 4.3p per share - which in itself is almost double today’s price. 

Jamie_55a91591db06b.jpg


Register here to be notified of future ADM Company articles

No investment advice: The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © Proactiveinvestors.com, 2019. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use