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Home » Popular Markets » Equities » Broker Forecasts: Ryanair, Smiths Group, Central Asia Metals, Frontier, Greencoat
  • SocGen say ‘Hold’ and Goldman Sachs ‘Buy’ for Smiths Group
  • Goldman Sachs and BoA rate Ryan Air a ‘Buy’
  • Berenberg retains Central Asia Metals as a ‘Buy’
  • Jefferies upgrades Frontier Developments to ‘Buy’
  • Jefferies raises Greencoat UK Wind to ‘Buy’

Smiths Group (LSE: SMIN), a UK-based engineering business, reported a 14% growth in interim profit of £189.9m for the six months to January 31. On a pre-tax basis, profits almost doubled to £160m. The outlook is mixed, due to a more challenging aviation market at a time of uncertainty arising from global geopolitical tensions. Smiths has suspended sales in Russia because of its invasion of Ukraine, describing the war as a “moderate risk” to growth due to its impact on global supply chains. It issued guidance for full-year revenue growth of 3%. SocGen cut the price target to 1,550p (from 1,615), with a ‘hold’ rating, while Goldman Sachs cuts the price target to 1,780 (1,840) pence, with a ‘buy’ rating. 

Ryan Air Holdings (LSE: RYA), along with the airline sector generally, has suffered as a result of the global pandemic lockdowns and, although Russia’s invasion of Ukraine and the continuing trade tensions with China make for an uncertain outlook, it could be argued that much of the bad news is now priced into its shares. Unlike other airlines, however, Ryanair has low costs and a strong balance sheet, and so is well placed to profit from a recovery in the global travel industry. This week, Goldman Sachs cut the Ryanair price target to €21.50 (23), rating it a ‘buy’; Morgan Stanley trimmed Ryanair price target to €20 (21), with an ‘overweight’ rating, and Bank of America edged the price target down to €19 (19.50) with a ‘buy’ rating.

Greencoat UK Wind (LSE: UKW), a leading renewable infrastructure fund invested in UK wind farms, has reported strong cash flow and robust dividend cover for the year to 31 December 2021. Greencoat’s portfolio of wind farms represents 5% of the market, powering 1.5 million homes. With the UK government focused on its 2050 net zero emissions target, including a 40GW offshore wind target for 2030, and with the added imperative of boosting the UK’s energy security, the sector is set for growth. Jefferies yesterday raised its rating to ‘buy’ (hold) as they did with Greencoat Renewables recently.

Central Asia Metals (AIM: CAML), the London-based miner with 100%-owned operations in central Kazakhstan (copper) and North Macedonia (zinc-lead), on Tuesday reported a record year for revenue, profits, free cash flow and returns to shareholders, thanks to a strong market for metals amid accelerating demand and a shortfall in supply. The Board was able to propose a record dividend within policy, and is expecting to pay off the remainder of its corporate debt facility this year. Berenberg yesterday reduced its price target to 310 (320) pence, and retained the ‘buy’ rating.

Frontier Developments (AIM: FDEV) is a developer and publisher of videogames, using its proprietary COBRA game development technology. It also has its Frontier Foundry games label for third-party publishing. In its interim results for the six months to 30 November 2021, Frontier reported a gross profit margin for the period of 63%, with revenue growth of 33% from the release of Jurassic World Evolution 2 in November 2021 and the ongoing performance of their existing game portfolio. On the back of these results, Jefferies raises Frontier Developments to ‘buy’ (from ‘hold’), with a price target of 1,667p (1,800).

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

James Norris

James Norris

James is a highly experienced writer and editor, gained from more than 20 years in the financial services industry, in particular wealth management and asset management.

He initially worked as a financial journalist for a number of leading media brands, including the FT Group, Financial News, Euromoney and Incisive Media, covering most aspects of the asset management industry. More recently, James switched to work as an in-house content specialist for fund management and wealth management groups, including JP Morgan Asset Management, Quilter Cheviot Investment Management, AXA Investment Managers and Invesco Perpetual.

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