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Broker views: Telecoms, media and contractors

28 September 2017 15:03

Credit Suisse double-downgraded its recommendation on TalkTalk (LON:TALK) and moved straight to 'underperform' from 'outperform', believing structural headwinds are growing for the telecoms group.

Analysts said: "Following a change of management and strategy, TalkTalk shares have recovered 25% YTD.

"Whilst we agree with the renewed focus on core broadband, the stock has recovered to our previous TP of 210p, and we are now cutting longer-term forecasts as structural challenges are growing, and establishing a new TP of 170p."

Meanwhile, Barclays Capital upped its recommendation on media group UBM (LON:UBM) to 'overweight' (from 'equal weight') believing now is a good entry point for investors, with the shares underperformaing the FTSE 250 by 16 per cent since the beginning of the year.

The bank added: "We are upgrading UBM to Overweight with a 755p price target [up from 745 pence] because 1) we expect Events organic revenue growth to improve from here; 2) we think fears on the fashion portfolio are now overdone; and 3) we remain positive on the exhibitions business model (96% of UBM's SOTP value)."

Elsewhere, equity analysts at Peel Hunt say "you may now remove your hard hat" with regard to shares of contractor Balfour Beatty (LON:BBY), believing the management team has materially de-risked the investment case.

Moving to a 'buy' rating (from 'add'), the broker commented: "Our analysis suggests that medium-term earnings expectations are looking undemanding given the operational progress, beneficial mix shift and robust market backdrop."

Target price increased to 340 pence a share (from 300 pence).

At 3:03pm:

(LON:BBY) Balfour Beatty PLC share price was +11.3p at 268.7p

(LON:TALK) TalkTalk Telecom Group PLC share price was -4.4p at 205.9p

(LON:UBM) UBM Plc share price was +4.75p at 673.25p

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Related Company: TALK

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