Broker tips: Persimmon, Informa, Blacks Leisure

The wheels have come off the Persimmon revival bandwagon this year with the stock coming down from its January peak of around 500p to dip below 400p at one point but they are back on the rise after Tuesday's results, with good cause, in Panmure Gordon's view.

The broker has upgraded its price target for the housebuilder to 555p from 549p and retained its 'buy' recommendation after Persimmon announced 2009 figures that were ahead of Panmure's expectations.

'A continued focus on operating margins at the business, has significantly improved profitability and this should continue. Whilst concerns remain over the fragility of the UK mortgage market and ongoing economic conditions, these are reflected in our assumptions,' Panmure Gordon said, adding that it would revise its projections after the company's analysts' meeting.

The Panmure team's early thoughts are that its £13m profit before tax forecast for 2010 will be bumped up, possibly as high as £75m.

Full year results from business publisher Informa were well ahead of expectations, according to Panmure Gordon, raising the prospect of earnings upgrades for 2010.

Panmure rates the shares a 'buy' and has a 400p price target for the stock.

Singer Capital Markets was also impressed with the results, particularly the 36% dividend hike to 11.45p. 'We were looking for a signal of confidence to be sent through the dividend and forecast a total of 10.5p (2008: 10.0p),' the broker admitted.

The stock trades on 11.3 times Singer's estimated 2010 earnings which the broker thinks is 'a very low multiple for a company with a very good quality profit mix'.

Singer thinks the stock is worth buying and more or less concurs with Panmure Gordon's target price (TP), at 403p.

The broker thinks the results also have positive ramifications for sector peer UBM, which declares results on Friday. 'There are also positive indications for the pure play exhibitions stocks ITE Group (Buy, TP169p) and Tarsus (Buy, TP150p). The read across is also positive for Euromoney (Buy, TP659p) on both subscriptions (over half of the business) and its events portfolio,' Singer analyst Johnathan Barrett said.

Charle Stanley is advising its clients to hold on to their Blacks Leisure Group shares while Sports Direct makes up its mind whether to make a cash offer for the camping and sportswear retailer.

'Our Hold reflects our concern about the threat of competitive incursion from two of Blacks' specialist competitors (Go Outdoors and Cotswold Outdoors), who have recently announced ramped up store rollout programmes. In particular, we highlight that the group is overly dependent on a small number of super-contribution stores, with the top 20% of stores accounting for 49% of the total store contribution (source: Feb 5th 2010 Blacks' proposed Equity Fund raising prospectus),' the broker concludes.