UBS has begun covering the industrial acquisition vehicle with a “buy” rating and a target price of 415p. The broker believes that Melrose can sell its Dyncast business for £370m to £400m in the next few months, freeing up resources for a further acquisition. UBS also likes the firm’s high US exposure and forecasts growth in its energy division.
GREAT PORTLAND ESTATES
Panmure Gordon rates the property group “hold” with an increased target price of 344p. The broker has tweaked its earnings forecasts for 2011 and 2012 following an upbeat trading statement last week, with good increases in both property values and rental growth in the last year. However, Panmure’s preferred large-cap property play remains British Land.
Citigroup has started coverage of the oil explorer with a “buy / medium risk” rating and an initial target price of £16. The broker sees BG Group as a strong performer in the European oil sector, with an 18 per cent outperformance compared to its peers since January 2010. It also approves of BG’s improved portfolio and visibility.