- Shore Capital ticks the ‘buy’ box for Watches of Switzerland
- Ferrexpo raised to ‘outperform’ (neutral) by Credit Suisse
- Citigroup starts coverage of GB Group with ‘buy’
- Savannah Resources rated ‘buy’ despite land dispute
- Goldman, UBS, BoA judge new spin-off Haleon a ‘buy’ while Jefferies and JPM more cautious
Shore Capital started coverage on Watches of Switzerland LON:WOSG with a ‘buy’ rating and a fair value price of 1,200p. The broker said the company offers one of the highest levels of protection in the retail sector from the decline in consumer sentiment. The broker noted the company’s strong growth and that “over the past three years the company has tripled Ebitda and doubled operating margins, a testament to the strong impact of the group’s CEO, Brian Duffy”. At close of trading in London yesterday, the stock was priced at 845.5p, a return of -38.8% YTD and -11.4% over 12 months.
Credit Suisse raised Ferrexpo LON:FXPO to ‘outperform’ (neutral), but trimmed the target price to 250p (260p). The bank’s analysts said the company offers an attractive return profile, supported by strong dividend yields for investors, as Ferrexpo is an iron ore pellet producer with “a material cost-effective portion of global seaborne pellet supply”. However, the analysts reduced the target price because of a 26% drop in earnings due to the recent rail disruption in Ukraine. At close of trading in London yesterday, the stock was priced at 141.5p, a return of -50.8% YTD and -67.9% over 12 months.
Citigroup initiated coverage of GB Group LON:GBG, a provider of digital identity products and services, with a ‘buy’ rating and a target price of 607p. Edison notes that the share price is down about 40% year-to-date and is trading on a P/E of 21.6x FY23e and 19.4x FY24e, the lowest level since autumn 2019, except for the dip in March 2020. GBG is currently integrating its new acquisition Acuant, a US identity verification firm, which has a strong position on the US market and which is expected to outperform the core GBG business. Six brokers have given the stock a ‘buy’ recommendation. At close of trading in London yesterday, the stock was priced at 452.4p, a return of -38.8% YTD and -46.3% over 12 months.
SP Angel has given a ‘buy’ rating on Savannah Resources LON:SAV, with a target price of 17.9p, despite a dispute over the ownership of land packages acquired by the company from private landowners for its Barroso Lithium Project. As SP Angel says, “the company argues that the property in dispute accounts for just under 1.5% of total project area and that, at the time of acquisition, the properties were verified and registered with the local land registry office.” At close of trading in London yesterday, the stock was priced at 2.90p, a return of -34.1% YTD and -9.4% over 12 months.
Goldman Sachs has started coverage of Haleon LON:HLN with a ‘buy’ rating and a target price of 350p. Haleon is the consumer healthcare business subsidiary of GSK that listed on the London Stock Exchange last week. GSK decided to spin off Haleon to give both companies better growth potential, though the new company starts with a debt pile of £10.3bn. Nevertheless, the broker consensus is positive, as four other brokers have initiated coverage of the stock: JPMorgan starts Haleon with an ‘underweight’ rating and a target price of 280p; UBS starts on a ‘buy’ rating (380p); Bank of America starts with ‘buy’ (385p); and more cautiously Jefferies has ‘hold’ (330p). At close of trading in London yesterday, the stock was priced at 309p.
