Check out this week's most popular equity research
St Ives Plc (SIV) | N+1 Singer, 19 January
"Marketing activation has been impacted by further decline in grocery retail impacting profit by c£5m. Strategic The Company is also taking this opportunity to revise its guidance for Strategic Marketing as its recovery pace is not running at the planned target rate. PBT falls from N1Se £31.9m to £25m. The Company expects dividend to be held based upon lowered guidance and the implied cash flow performance. There do not appear to be any covenant issues. Forecasts and TP under review and downgrade to Hold. We expect the shares to test the 100p level..."
Pearson (PSON) | Panmure Gordon, 18 January
"Pearson has produced a surprisingly weak update, capitulating on long-standing market concerns regarding North American higher education courseware, accelerating its restructuring programme and rebasing profit and dividend guidance from FY17E onwards. We move from Buy to Hold, with an initial view is that the shares could fall towards the 600-700p level. Call 0830..."
Sector Note - Mining | finnCap, 16 January
"We take a look at the rankings of the various countries in Africa that have a significant exposure to mining. We take the Transparency International corruption rankings as our starting point and modify these for exceptional geology and for current UK government travel warnings. Ghana, Botswana and Namibia come out as our top three, with Eritrea, Kenya and Zimbabwe at the bottom of our rankings..."
BATS reaches a $49.4bn agreement to acquire Reynolds
British American Tobacco (BATS) | Whitman Howard, 17 January
"BAT (BATS LN, HOLD, T/P 5300p) announced this morning that they had reached an agreement to purchase the remaining 57.8% of Reynolds American (RAI US, N/R) this morning. The new agreed terms implies a total current value of $59.64 per Reynolds share. The company are hosting a live webcast at 8.30..."
H1 trading update – strong performance
Allergy Therapeutics (AGY) | Zeus Capital, 19 January
"Allergy Therapeutics (AGY), the UK-based, specialty pharmaceutical company focused on the development, manufacture and sale of vaccines and other products for the treatment and prevention of allergies, this morning released a pre-close trading update for the 6 months to Dec 31, 2016. The company has highlighted a period of strong growth in revenue, driven through gains in market share and also currency movements. AGY anticipates that it will report H1 revenues..."
EBITDA break-even reached, positive outlook
7Digital Group Plc (7DIG) | Edison, 18 January
"7digital’s FY16 revenues increased 7% y-o-y and EBITDA profitability was reached, as targeted, in Q4. New contract wins in FY16 set the stage for a stronger top-line performance in FY17 and we consider management’s reiterated target of operating profitability in FY17 as realistic. For an operationally geared growth company in its first year of profitability, the FY17e EV/EBITDA of c 12x looks attractive..."
Greggs (GRG) | Edison, 17 January
"Greggs' trading update confirmed that it delivered a stronger than expected finish to FY16, leaving it well placed to face the margin pressures that will affect the entire industry in FY17. We expect only modest changes to FY17 estimates when FY16 results are released and therefore continue to value the shares at 1,189p..."
Successful Christmas trading leads to...........forecast upgrades
Distil Plc (DIS) | Progressive Equity Research, 17 January
"On the back of a very strong Q3 trading period, with revenues up by over 70% and volumes by 56%, the Board now anticipates that Distil’s FY17 results “will be ahead of current market expectations”. We are consequently raising our revenue forecasts for the next three years, which also see improvements to our bottom line PBT projections. Brand marketing spend growth of 88% in Q3 was running ahead of revenue growth, reflecting the ongoing brand investment across the product portfolio. This dilutes the impact of operational leverage, but still sees our previous PBT loss of c £120K educe by to thirds to £40K. A strong Q4 performance could potentially see Distil achieve breakeven, but we prefer to err on the side of prudence at this stage..."
Sinclair Pharma Plc (SPH) | Hardman & Co, 17 January
"Sinclair is a pure-play aesthetics company with a concentrated and highly competitive portfolio of differentiated injectable aesthetics products, which target unmet clinical needs for effective, high quality, longer duration, natural looking and minimally-invasive treatments, which is a significant growth opportunity. Sinclair has an established sales and marketing presence in Europe, direct sales in Brazil, and operates through an international group of distributors in other markets, including SE Asia and the US. With the benefit of a strong balance sheet, Sinclair is investing in an accelerated growth phase and margin expansion..."
Estimated 43% top line growth drives FY17 upgrades
Blancco Technology Group Plc (BLTG) | Equity Development, 18 January
"Cyber-crime is not only the scourge of corporates, consumers and governments alike, but also the bane of many politicians. Just ask Hillary Clinton after highly embarrassing data was stolen from her Democratic Party’s servers during the recent US elections and posted on the internet. Not surprisingly President-elect Trump plans to stamp this out, vowing to spend $billions beefing up America’s online defences to stop the country being “hacked by everybody, including Russia and China.” Unfortunately the situation is probably no better elsewhere. Indeed, if this type of thing can happen right under the noses of the world’s most technologically advanced economy, then there’s probably also a great deal of work required to tighten up security ahead of this year’s crucial Dutch, French and German elections...."
