Date: Tuesday 24 Apr 2012
LONDON (ShareCast) - UBS has reiterated its buy recommendation for hedge fund manager Man Group, saying that the firm is a 'likely take-out candidate' and is on the 'UBS M and A Watch List'.
"With Man Group shares having traded below 150p for a six-month period, we believe that a 50%+ premium bid offer to the current share price would be sufficient to obtain shareholder approval," the Swiss broker said.
The broker has cut its target price for Man Group from 165p to 140p due to earnings per share (EPS) downgrades on the back of the recent weak performance of AHL.
Jefferies has maintained its hold recommendation for food and retail group Associated British Foods but acknowledged the firm's solid first-half results.
While the group is saying that it is confident of making "substantial" earnings per share (EPS) growth for the full year, "We highlight that consensus is already looking for 16% EPS growth in the year and we would thus not expect material consensus upgrades at this stage," said Jefferies.
The broker says that the stock is trading on a 2012 calendarised price-to-earnings multiple of 14x, in-line with its 10-year historical average. The price target is set at 1,155p.
Prime Markets has reiterated its sell rating for bed and flooring retailer Carpetright following the firm's profit warning on Tuesday morning.
"Even the highest quality and most resilient retail sector plays cannot resist the Eurozone debt cancer and consumer confidence crisis forever, and the statement today shows problems in the Netherlands and Belgium impacting on Carpetright sales some time before the sovereign debt issue for the region emerged this week," said Prime Markets' head of dealing, Richard Curr.
The broker says it expects a test of the flat 200-day moving average currently at 545p in the next two to four weeks.