Imperial Tobacco (LON:IMT) failed to deliver the much ‘hoped-for volume rebound’ in the fourth quarter, said Investec analyst Martin Deboo.
Deboo gives the stock a ‘Hold’ rating with a £20.10 target.
“It feels to us that the update is going to do little to lift the pall over the stock today.”
Alternatively, Charles Stanley retained its ‘Accumulate’ rating for the world’s fourth largest cigarette maker.
“Imperial Tobacco reassures that its financial position remains in line with expectations,” Charles Stanley analyst Tina Cook commented.
“IMT’s share price has underperformed, but a secure yield and modest relative valuation should offer support at current levels."
Paul Jones, analyst at Panmure Gordon, believes that news from US business software firm Intuit (NASDAQ:INTU) may boost Sage (LON:SGE).
Jones said that Intuit’s full year guidance - which is expected to forecast 8-11% revenue growth - “should have investors thinking that Sage should not only achieve consensus estimates for this year, but also have licence to talk about a return to higher single digit revenue growth for 2011.”
“Both Intuit and Sage execute well in a global marketplace, and many of Intuit’s operational initiatives are mirrored by Sage.”
“Certainly, the spending environment is tough but it is improving. The FY results will be a fitting swansong to outgoing CEO Paul Walker.”
Prime Markets examined RSM Tenon’s (LON:RNO) ‘year of consolidation’. This morning the business consultant and accountancy firm reported a 38% jump in underlying profit after turnover increased by 26%.
However analyst Richard Curr thinks that investors should look to take profits.
“Prime Markets believe the new debt levels now puts the Tenon share price ahead of events ... We are sellers down to 49p for the next 2 months.”
According to Richard Curr the technical picture supports the fundamentals;
“RSM Tenon Group shares recently spiked through the upper end of a price trading range at 56p.”
“The price has fallen back in early trading, and while at or below 56p is expected to return to the current level of the 20 day moving average at 49p in the next few sessions.”
In the junior market, oil and gas stocks once again dominated coverage with Kurdistan-focused oilfield developer Gulf Keystone (LON:GKP) getting the most attention.
Oil volumes at Gulf Keystone’s Shaikan oilfield could be ‘several multiples’ higher than the current 4.2 billion barrel (bnbbls) mean estimate, according to Daniel Stewart analyst Richard Nolan.
This morning Gulf Keystone said that initial indication of the oil-water contact in the Bjeel-1 well on the Akri-Bijeel joint venture block “is supportive of the concept of a single regional aquifer.”
“The oil-water contact point is crucial in determining volumes of the structure,” Nolan said.
According to Nolan, the oil-water contact point is indicated (by previous pressure gradients) to be at a vertical depth of around 2,230 metres, and he has previously estimated that the Shaikan resource could jump to between 18bn and 20bn barrels if this was confirmed in further appraisals.
The analyst highlighted the latest data from Bijeel-1 is "supportive of this thesis and are on the same pressure gradient".
Similarly Fox-Davies analyst Lionel Therond said the update was "potentially very good news indeed”, with the oil-water contact also featuring as a key point.
“A single oil-water contact would increase significantly the currently estimated oil-in-place (OIIP) in a combined Shaikan/Sheikh Adi/Ber Bahr structure,” Therond said.
“We are using 12Bbbl OIIP in our forecasts and revised estimates could potentially be a multiple of that number.”
Evolution Securities analyst David Farrell said the update “bodes well for a resource upgrade from the initial pre-drill estimate of 500 million bbls in place” for Bijeel.
Elsewhere Westhouse Securities’ David Hart highlighted that the ‘positive newsflow continues’ from Mongolian-focused oil explorer Petro Matad (LON:MATD).
Hart rates Petro Matad as a ‘Buy’.
Yesterday, Petro Matad updated investors on its drilling progress on the Davsan Tolgoi 2 well, which is following up July’s oil discovery.
The analyst highlighted that drilling has returned to normal in Mongolia, and analysis of the DT-1 reservoir and oil characterisation are expected to be announced in the next three to four weeks.
Hart also looked at Nautical Petroleum (LON:NPE), who discovered oil bearing sands through a successfully sidetrack well in the North Sea.
“Despite the sharp rise in the price on the announcement, we consider that the shares may still have further to go,” Hart commented.
Westhouse rates Nautical as a ‘Buy’.
Whilst acknowledging that Ithaca Energy (LON:IAE) has received approvals for the Athena Field, Hart said that its a ‘a positive development’ but “there is better value elsewhere”.
The analyst noted that 1st production is expected in Q3 2011, at 22,000 barrels per day.