LONDON (ShareCast) - 1244: Interesting reference to Vodafone (LSE: VOD.L - news) from analysts at Citi this morning: "Balance of risk to the upside Vodafone has underperformed the sector by 7 per cent over the last 6 months as pressure in Europe has more than offset continuing strong performance in the US and emerging markets. The stock has surrendered its premium trading position versus its European peers and now trades close to the lower quartile on near term multiples. Its current (i.e. calendar 2013) price-to-earnings discount to Verizon (VZ) has expanded to 36 per cent, or 32 per cent on a 1 year forward basis. At this level, a bid from Verizon (NYSE: VZ - news) no longer seems as unlikely as it once did - though with the market implied exchange ratio still moving in VZ's favour, the prospective bidder would be wise to wait for that to reach its full potential first." FTSE 100 (FTSE: ^FTSE - news) down 23 to 6,067.
1029: Meggitt (Other OTC: MEGGF - news) has been raised to 'top pick' at RBC Capital. as regards the current technical backdrop, this is what analysts at Charles Stanley (LSE: CAY.L - news) had to say this morning: "If this level (5,961) is exceeded the next upside target will be 6300 or so, but the fact that the recent advance has left the UK index looking so overbought - its 14-day RSI has surged to a reading of 72 per cent, a near three-year high - suggests that a period of consolidation is likely first.
1004: For analysts at Seymour Pierce: "the failure of a sales recovery at Morrison despite soft comparables is more concerning for fiscal year 2014 and it is becoming more inevitable that profits will decline again year-on-year. We believe the food industry outlook will remain challenging in 2013/14 as inflation comes back and consumer budgets stay under pressure. Morrison is scale disadvantaged and will struggle to perform in this scenario." Hence, they have cut their fiscal year 2014 forecast by 8% to £850m (previously £927m and consensus £909m). In parallel, their price target now comes in at 230p versus 250p before. FTSE 100 down 16 to 6,074.
0943: Analysts at Westhouse Securities have today issued a bullish note on Beazley (Other OTC: BEAZF - news) , singling it out as their top pick. They explain that: "we estimate it should deliver an average return on equity (ROE) of 15.5 per cent for 2012-14, despite low investment yields and a higher exposure to longer tail liability lines where rates have been under greatest pressure. We also expect Beazley to pay a special dividend of 5.3p for fiscal year 2012, bringing the average yield for 2012-14 to 5.8 per cent. Moreover, we see Beazley as well positioned to benefit from improving US casualty rates. Despite this, the shares currently trade on a Price/Book (P/B) of 1.3 times estimated fiscal year NTA (net tangible asset value) and only 1.2 times estimated fiscal year 2014 NTA. FTSE 100 down 18 to 6,072.
0840: UK stocks have begun the day slightly lower despite very strong gains in the shares of the main banking groups. That after the Group of Governors and Heads of Supervision (GHOS) yesterday announced modifications to the global liquidity rules set to come into effect for the world's main lenders. The new agreement prolongs the implementation phase for the so-called liquidity coverage ratio (LCR) and expands the types of assets eligible. Asked in a BBC interview if he was downplaying the importance of Britain's triple A credit rating - one of the few remaining in the EU - Cameron has said: " (...) The ratings you have are all hugely important, I wouldn't deny that for a minute, but in a way the real test is what are the interest rates the rest of the world is demanding in order to own your debt and our interest rates are extremely low, the lowest they have been really for centuries." House prices rose by 1.3% month-on-month in December, according to Halifax. FTSE 100 down 11 to 6,079.