Proactive Investors is a leading financial and investor website and platform, dominating the "Small-Mid Cap" investor space with multiple investor "channels" and "touch-points."
Proactive Investors Australia is a part of the largest global financial investor network with offices in Australia, Europe, Asia and North America.
Friday's London broker comment corner; Vodafone, Scotgold, Easyjet and Ryanair get rated
Proactive Investors brings you the buzz from the brokers, with a wrap of overnight comment from some of the biggest names in the London square mile.
From London: Analysts at Wall Street bank Citi have reduced their target price for phone giant Vodafone (LON:VOD) to 195 pence a share from 205 pence previously.
But Citigroup said it remained buyers of the group's shares.
Analyst Simon Weedon said he expected organic service revenue growth to improve in the fourth quarter this year following a weakening in Q3 but had concerns about the outlook in Italy.
"In our view, Vodafone’s mobile exposure in Europe puts it in the firing line of economic weakness, tariff reform and text cannibalisation, but its asset mix is an offsetting advantage. India, Vodacom and Turkey are outgrowing the European assets: we make modest upgrades to Vodacom and India with this set of changes, which could go further in time."
The analyst added: "Although Vodafone’s growth is weakening, it is positive, Vodafone has exposure to growth in emerging markets and the US, and we still regard its dividend as comparatively safe versus the sector."
Goldman Sachs also reiterated its 'buy' stance on Vodafone (LON:VOD) and said it expected the stock to continue re-rating given its sustainable proportionate growth.
It targets a price of 242 pence (current price:173.25 pence).
City heavyweight Goldman has also upped its target price on engine specialist Rolls Royce (LON:RR.) to 1010 pence today and repeated its 'conviction buy' on the stock.
Goldman said the company had reported 2011 EPS (earnings per share) of 48.5p, which was 8.3 per cent better than Goldman's estimate.
"The beat was due to inclusion of four months of associate EBITA from Tognum which we had not expected and a lower tax rate," it said.
Meanwhile, broker Westhouse has today upgraded Scotgold (LON:SGZ) to "strong buy" from "buy" with a target price of 11 pence, expecting further growth in the resource at its Cononish gold project in Scotland.
It followed a visit to Cononish, which confirmed that operations in and around the project are expected to increase the resource and add more targets, the broker said.
Scotgold expects to mine at an annual rate of 72,000 tonnes, producing between 20-25,000 ounces of gold and 85,000 ounces of silver.
Broke also noted that Scotgold will use the proceeds from gold and silver sales to undertake further exploration on other targets in the region, while offering the short term benefit of turning from an explorer into a producer.
Elsewhere, research house Nomura has released a note on low-cost airlines, in which it raised its forecasts for Easyjet (LON:EZJ) and Ryanair (LON:RYA) to reflect stronger trading.
The figures were raised to reflect the recent strong trading updates and spot oil and currency, said the analysts.
They added that the failures of Spanair and Malev, plus capacity reductions from the likes of Thomas Cook (LON:TCG) and Air Berlin, play into the low cost carriers' hands but point out that the risks do need to be considered more carefully.
"We think the LCC (low cost carrier) trading environment should continue to be supported by short-haul capacity discipline. However, as the shares rise, we think more consideration needs to be given to the downside risks from fuel and currency in particular," said Nomura.
It raises its target price for Easyjet to 540 pence, from 470 pence previously and remains buyers of the shares, while it remains 'neutral' on Ryanair.
In other coverage, Deutsche Bank rates pharma company Shire Plc (LON:SHP) a 'buy' with a target price of 2450 pence - increased from 2325 pence previously.
The strong double-digit sales momentum seen in the fourth quarter bodes well for another year of "good earnings growth, said Deutsche in a note.
"Shire is one of a very rare breed - a pharma company that looks capable of delivering double-digit compound EPS growth in the next several years.
"It remains our top pick among the larger, liquid UK pharma stocks although a combination of the exceptional relative performance over the past year and cyclical rotation may cause the shares to consolidate in the short term," it said.
"Shire may not offer the yield attractions of the larger UK pharma stocks but its excellent EPS growth prospects and M&A possibilities more than compensate in our view," Deutsche said, adding that the main company-specific risks to the shares in its view surrounded patent challenges to key brands and stronger competition in HGT (human genetic therapies).
Turning to smaller caps, Red Rock Resources's (LON:RRR) announcement this week that it had agreed to sell half its 1.5 per cent production royalty over the Mt Ida iron ore prospect has prompted research house Edison to update its valuations for the royalty.
On Monday, the firm revealed the proposed sale to Anglo Pacific Group for a total of US$14 million - to be received in three instalments.
For a median valuation on what the royalty is worth, Edison analyst Charles Gibson said Edison applied the US$14 million to be paid by Anglo Pacific in addition to 50 per cent of the 10Mtpa (million tonnes per annum) scenario Edison has previously ascribed to the iron project.
This values the current 1.5 per cent Mt Ida royalty at US$60.7 million, or £38.5 million, he said.
As a top- end valuation, Gibson said a 20 Mtpa scenario was used, giving a valuation of US$103.4 million or £65 million.
Also in mining, Condor Resources (LON:CNR) today revealed further results from its first drill programme on the La India project in Nicaragua, which showed the prospect to be ‘potentially excellent’.
Through trenching, Condor has proven mineralisation over a 25 by 49 metre area. Additionally two drill holes confirmed a large hydrothermal system with elevated background gold values extending to over 150m depth.
In a note, Ocean Equities said: "As an early stage exploration prospect the Central Breccia zone still provides potential for the company to delineate the open-pit style bulk mineable ounces to the company’s mine development plan, which could ultimately add major value to La India."
It added: "If Condor is able to define an open-pittable, bulk tonnage resource at the Central Breccia prospect it would feed a centralised mill that is envisaged to take higher-grade ore feed from the three main vein sets at La India; the La India vein set with 730koz at 5.3g/t gold, the America vein set with 405koz at 6.2g/t gold and the Mestiza vein set with 334koz at 7g/t gold."
