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Broker tips: Ceres Power, Fuller, Smith and Turner

Fri 31 July 2020 14:57 | A A A

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(Sharecast News) - Analysts at Liberum lowered their target price on pub landlord Fuller, Smith and Turner from 820.0p to 700.0p on Friday, stating London was likely to drag on the group's recovery efforts.

Liberum said 2020 was "a transitional year" for Fullers, with results broadly in line before a roughly £10m pre-tax impact from the Covid-19 pandemic.

With Fullers' portfolio 91% asset-backed and "well invested", Liberum said the group was positioned well for confidence and demand to return, but cautioned the firm's "notable presence in central London" may take longer to recover.

So far, Fullers has reopened around 75% of its managed estate and the majority of its tenanted estate, with "an encouraging return in trading levels".

While the group aims to "return to normality" and resume capex in the fourth quarter of 2021, management kept guidance withdrawn, leading Liberum to lower forecasts and its target price on the stock based on "a more phased reopening".

Analysts at Berenberg raised their target price on clean energy technology group Ceres Power from 470.0p to 580.0p on Friday, stating that they remained "conviction buyers" of the stock.

Berenberg highlighted that investor interest in the hydrogen and fuel cell sector had been "exponential" in recent months and said long gone were the more basic questions about how a fuel cell works.

The German bank said these questions had now been replaced by detailed debates on competitive dynamics, market opportunities and electrolysis.

Berenberg noted that the next six to nine months for Ceres "should be exciting" with Bosch and Weichai both expected to announce plans to scale-up production of the company's SteelCell product and said it was also "optimistic" about progress with other partners - like Doosan and Honda.

"Ceres offers one of the most compelling opportunities for equity investors. With its leading solid-oxide fuel cell (SOFC) technology, roster of global OEM partners and numerous upcoming near-term catalysts, we believe the recent share price pullback offers a compelling entry point into the stock," said Berenberg.

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