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Broker Tips: Hunting, Harbour Energy and IAG

  • Kepler Cheuvreux cuts energy group Hunting to ‘hold’ but raises price target
  • Liberum gives housebuilder Vistry ‘buy’ rating
  • Morgan Stanley raises Harbour Energy target to 590p
  • Kepler Cheuvreux raises Centrica to ‘buy’, upping price target
  • Citigroup, Deutsche and Liberum reiterate IAG ‘buy’ rating

Shares in the energy services group Hunting (LON: HTG) have recovered strongly from a year-end slump, gaining almost 113% over the past three months, and 46% over the past week, on news of the FY 2021 results. Although the numbers are mixed, improved trading, a strengthening of commodity prices and a joint venture with Jindal, an Indian tubular goods manufacturer, hold out brighter prospects for a company that has lagged the sector. The stock is currently trading at 307p. Kepler Cheuvreux cuts Hunting to ‘hold’ (from ‘buy’) but raises the price target to 390p (from 220).

Housebuilder Vistry (LON: VTY) says FY profits are in line with expectations, after reporting ‘excellent progress’ on completions (up 23.7%), revenue (up 32%), net cash (up 515%) and adjusted profits (up 115.4%) in 2021. Shares in UK house builders rallied on Monday this week on reports that the cladding scandal may not be as costly to developers as feared. Liberum gives Vistry a ‘buy’ rating, though it also has ‘buy’ for other housebuilders, including Crest Nicholson, Persimmon, Barratt Developments, Berkeley Group, Redrow, MJ Gleeson and Bellway. Vistry stock is currently trading at 998p, a return of -15.71% YTD and -5.22% over 12 months.

Harbour Energy (LON: HBR), an oil and gas company with operations in the North Sea, South East Asia and Latin America, saw its shares gain more than 8% over the past month, with a return of 10.45% YTD and -37.2% over 12 months. Last month Barclays raised the target price of 570p, indicating a potential upside of 35.7%. Yesterday Morgan Stanley followed suit, raising the Harbour Energy target to 590p (540), with an ‘overweight’ rating. The broker consensus for Harbour is positive, with six ‘buy’ recommendations and one ‘hold’. Another positive indicator is that President and Europe CEO Phil Kirk earlier this year bought £328,000 worth of shares in the company at the current price (328p), ahead of his pending retirement.

Shares in UK energy supplier Centrica (LON: CAN) have been on a steady climb from a low of 45.47p in August 2021, reaching 77.8p today, a gain of 71%. Preliminary results for 2021 reported a strengthened and de-risked balance sheet, making ‘good progress’ towards completing a turnaround in the company’s prospects. Kepler Cheuvreux raises Centrica to ‘buy’ (from ‘hold’), upping its price target to 85p (80). Citigroup last week reiterated its ‘buy’ rating; JP Morgan Cazenove has dropped its price target to 87p, (94), with a rating of ‘overweight’; and RBC Capital Markets stays on ‘outperform’.

International Consolidated Airlines Group (LON: IAG), the international airliner group, saw its shares recover over the past week on a positive annual financial report and on news that, as CEO Luis Gallego said, transatlantic bookings have almost reached their 2019 levels. Analysts expect overall passenger capacity this year to reach 83% of 2019 levels (from 58% in Q4 21). Fuel is expected to remain the most ‘tangible’ headwind, with oil prices remaining high due to Russia’s invasion of Ukraine, though IAG has hedged 60% of its fuel bill for this year. Citigroup, Deutsche and Liberum have recently reiterated a ‘buy’ rating; Barclays keeps its ‘overweight’ rating; Peel Hunt and Berenberg stay on ‘hold’. The stock is currently trading at 143p, which is 0.42% YTD and -34.3% 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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