- Deutsche Bank initiates coverage of Mitchells & Butlers with ‘Buy’
- VSA reiterates Caracal Gold ‘Buy’ recommendation
- Berenberg raises Petrofac to ‘Buy’
- HSBC ups M&G rating to ‘Buy’
- JP Morgan upgrades Auction Technology Group to ‘Overweight’
Deutsche Bank has initiated coverage of pub chain Mitchells & Butlers (LON: MAB) with a ‘buy’ rating and a target of 270p. UK pubs have started to recover again, the bank said, after two years of Covid lockdowns. Like-for-like sales this year have been similar to pre-Covid levels, though inflation of 7% (March) will likely depress consumer spending. As the analysts said: “For pubs, cost pressures from wage, food and energy inflation mean profits would take longer to recover.” Deutsche Bank also initiates Wetherspoons with a ‘buy’, but Marston’s with a ‘sell’. Shares in Mitchells & Butlers closed yesterday at 227.8p, a return of -11.02% YTD and -27.8% over 12 months.
Caracal Gold (LON: GCAT), a newly listed gold miner operating at the Kilimapesa mine in Kenya with an initial annual gold production target of +50,000oz, has announced its first delivery of gold ahead of schedule. CEO Robbie McCrae says two recent acquisitions in Tanzania, combined with the strengthening gold price, offer “significant development potential”. VSA Capital says GCAT continues to make strong progress towards fulfilling its production targets: “We highlight that, in tandem with the capacity expansions, drilling has been underway at Kilimapesa and exploration results are due providing further potential share price catalysts.” VSA reiterates a ‘buy’ recommendation. The share price opened for trading this morning at 94p, a return of -17.2% YTD.
Berenberg raised Petrofac (LON: PFC) to ‘buy’ (hold) with a price target of 210p (250p) on Tuesday, in the belief that the oil services provider had turned a corner after “a few difficult years”: an investigation by the UK’s Serious Fraud Office has been settled and Petrofac is now back bidding for contracts. Petrofac, as a highly rated supplier to the oil and gas industry, will now be able to benefit from a strong outlook for oil and gas prices over the coming years. The German bank expects the company will reach its revenue guidance of more than $4.0bn by 2025. Shares were up sharply this morning, and are currently trading at 146.38p, a return of 27.2% YTD and 16.2% over 12 months.
HSBC has raised M&G (LON: MNG) to ‘buy’ from ‘hold’, rasing its price target to 260p (220p). As part of a review of UK wealth managers, HSBC has also raised St James’s Place to ‘buy’ from ‘hold’, but trimmed its price target to 1,600p (1,650p). HSBC reiterated its ‘buy’ rating on Abrdn, but slashed the price target to 255p from 330p, downgrading its long-term growth rate assumption. After a year of depressed values, their stock is now looking attractive, the analysts said, though it is “the total capital returns or growth on offer that are most appealing, in our view.” M&G closed yesterday on 220.5p, a return of 10.5% YTD and 1.5% over 12 months.
Analysts at JP Morgan have upgraded Auction Technology Group (LON: ATG) from ‘neutral’ to ‘overweight’ and their price target from 1041p to 1150p. The company, which operates six online auctions, is benefiting from a structural trend towards online sales of second-hand and other surplus goods, which gained momentum over the past couple of years as a result of the Covid lockdowns. Shares at market close yesterday were worth 949p, a return of -37.4% YTD and 1.06% over 12 months.
