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Broker Tips: Moneysupermarket.com, Pan African Resources

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  • Liberum upgrades Moneysupermarket.com
  • Berenberg Bank raises price target for Pan African Resources
  • Shore Capital ‘buy’ rating for DWF Group
  • Citigroup downgrades Jupiter Fund Management
  • Barclays slashes target price of Hammerson

Liberum has upgraded Moneysupermarket.com (LON: MONY) to ‘buy’ (‘hold’), as part of an analysis of the online platforms segment. The broker considers the stock to be undervalued and the potential target of a takeover. The broker said the online platforms segment had “de-rated by 32% year-to-date due to the market rotation away from growth”, making the sector an attractive investment opportunity. At close of trading yesterday, Moneysupermarket.com was priced at 180.8p, a return of -16.30% YTD and -30.94% over 12 months.

Berenberg Bank has reiterated its ‘buy’ rating for precious metals group Pan African Resources (LON: PAF), a rating that the bank has maintained for more than a year now. This time, however, the analysts have raised the target price by some 18%, from 28.0p to 33.0p, following ‘positive’ results from a feasibility study on its Mintails project in South Africa, against a background of unusually strong pricing for precious metals. At close of trading yesterday, the stock was priced at 19.3p, a return of 15.57% YTD and 5.93% over 12 months.

Shore Capital has a ‘buy’ rating for DWF Group (LON: DWF), the UK’s largest listed law firm. Since listing two years ago, DWF revenues have grown 13%, while last year adjusted profit before tax jumped 120% to £34m. The firm is also opening offices or acquiring practices in Europe, Middle East, Australia and South America, though scope for expansion has been limited by the company’s debt levels. Berenberg initiated coverage in May with a ‘buy’ rating and a target price of 160p; Zeus senses “increasing confidence in delivering medium-term strategic growth, reflected in a growing M&A pipeline”, saying that DWF is “significantly undervalued”. At close of trading yesterday, the stock was priced at 90.8p, a return of -20.35% YTD and -15.93% over 12 months.

The European asset management sector has had a tough time but Citigroup analysts believe the sector’s misery could yet continue, as the global economy heads towards a potential recession. Citigroup analysts have downgraded Jupiter Fund Management (LON: JUP) to ‘sell’ (‘neutral’), slashing the target price to 135p (185p), a reduction of 27%, and similarly downgraded abrdn to ‘sell’ (‘neutral’), reducing the target price to 150p (205p), also a reduction of 27%. With M&G, the Citigroup analysts have been more lenient, merely trimming the target price to 191p (212p), with a ‘neutral’ rating. At close of trading yesterday, the stock was priced at 135.2p, a return of -47.27% YTD and -53.95% over 12 months.

Barclays has slashed the target price of Hammerson (LON: HMSO) by a third, from 33.0p to 22.0p, giving it an ‘underweight’ rating, as part of a markedly pessimistic analysis of the UK and European real estate sector as a whole. For some of the real estate stock covered, Barclays has only trimmed the target price: Tritax Eurobox, to EUR 1,30 (1,35), on an ‘equal weight’ rating; Derwent London, 2,690p (2,800p), ‘underweight’; Great Portland, 670p (700p), ‘overweight’; and Grainger, 272p (290p), ‘equal weight’. For other real estate stocks, Barclays has cut the target price by more than 10%: Primary Health Properties, 140p (160p), ‘overweight’; LondonMetric Property, to 280p (320p), with an ‘overweight’ rating; Tritax Big Box, to 220p (260p), ‘equal weight’; and Workspace Group, reduced by 20% to 640p from 800p, with an ‘underweight’ rating. At close of trading yesterday, Hammerson was priced at 19.31p, a return of -45.9% YTD and -51% over 12 months.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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