BEST OF THE BROKERS

FRESNILLO
Citi rates the mining group as “neutral” with a target price of £17.30, despite the miner having its first disappointing quarter in years and announcing that production at its flagship mine fell below expectations. The broker has reduced its earnings per share estimate for 2011 from $1.33 to $1.25 because of the third quarter forecast miss, but gives Fresnillo the benefit of the doubt after it argued that 2012 costs will not be badly affected.

LAMPRELL
JP Morgan Cazenove rates the rig maintenance group as “overweight” with a target price of 444p, after the company announced a provision of $14.3m for underestimated labour and material costs on three of its lift-boat contracts. Despite this, the broker upgrades its 2011 earnings per share forecast by three per cent, seeing the negative impact of the provision as offset by increased scope of work and contingeny release on other contracts.

APR ENERGY
Following the re-listing of APR Energy after its takeover, Morgan Stanley initiates coverage with an “equal-weight” rating and a target price of 1200p, a 12 per cent upside to the current share price. The broker sees structural growth opportunities as very appealing, but says contract concentration and execution risk will limit the valuation multiples in the short term.