UBS rates the budget airline “buy” with a target price of 435p. The broker has upgraded its forecasts in light of a positive pre-close update, and now expects pre-tax profits this year to reach £250m. While UBS thinks there is further upside to come from the firm’s valuation and dividend, it leaves its forecasts for 2012 unchanged given uncertain fuel costs and currency movements.
ABERDEEN ASSET MANAGEMENT
Morgan Stanley rates the asset manager “overweight” and has raised its target price from 226p to 230p. The broker thinks greater fund flow resilience has driven assets under management above forecasts, as shown by the firm’s results on Monday. At nine times 2012 earnings, Morgan Stanley reckons the firm’s shares are trading at a 10 per cent discount to the sector and that its risk-reward balance remains attractive.
Nomura has initiated coverage of the mining group with a “buy” rating and a target price of £14. The broker thinks the firm formerly known as Vallar is London’s top opportunity to gain exposure to thermal coal, and expects the management team to buy up more assets to diversify the firm. Nomura expects to see debt reduction and organic growth, which could act as catalysts. It adds that the firm’s structure could be simplified to help unlock value.