Broker tips: Burford Capital, Serica Energy, Landsec, Big Yellow

(Sharecast News) - Analysts at Berenberg slashed their target price on financial services firm Burford Capital from 1,600p to 500p on Monday following the group's announcement that the US Court of Appeals for the Second Circuit had reversed the original judgement in favour of Petersen and Eton Park, the two claims it had financed in relation to Argentina's nationalisation of energy firm YPF in 2012.

Berenberg noted Burford's next steps now include a potential appeal court rehearing, a review at the Supreme Court, in the US, or the commencement of international arbitration against Argentina.

"In the absence of information pertaining to the remaining fair value of the case, we write the carrying value down to zero in our estimates," said Berenberg, which kept its 'buy' rating on the stock.

The German bank did note that while covenants were now exceeded, it also said the only restriction was that Burford cannot incur additional debt.

"The core portfolio is funded and where we still see a lot of value," said Berenberg. "The core portfolio (86%) and asset management business (14%) are still worth �5/share on our estimates."

Canaccord Genuity bumped up its target price on exploration and production company Serica Energy from 230p to 310p on Monday, stating the firm had a "cash harvest year ahead".

Canaccord Genuity said that while Serica's 2025 news flow was dominated by Triton FPSO downtime issues, it had "navigated these headwinds effectively" and now stands in a "strong operational position" in 2026.

With Triton back online, the rest of the portfolio performing, and M&A bringing additional production throughout the year, Canaccord Genuity sees Serica having "a fruitful time ahead", especially with commodity prices at current levels.

"We see 2026 also being a very strong cash flow year, with a return to higher production, but lower capex commitments resulting in a significant uplift in FCF on our numbers yoy," said the Canadian bank, which reiterated its 'buy' rating on the stock.

Canaccord also updated its model for Serica's FY25 results, FY26 guidance, and implemented its new commodity price assumptions for its forecast period, resulting in a 36% increase in its risked NPV10 valuation.

Goldman Sachs upgraded Landsec to 'buy' from 'neutral' on Monday but downgraded Big Yellow to 'sell' from 'neutral' as it took a look at European real estate stocks.

The bank noted that since 27 February, its coverage was down 14%, driving valuations close to 2009 lows as 10-year UK/European bond yields have risen 40-70 basis points and credit spreads have widened 18bps. Goldman's economists now forecast two rate hikes by the European Central Bank - 25bps each in April and June - and for the Bank of England to hold.

"Yet following the rapid market reaction negatively impacting cost of capital, we believe two considerations are important for commercial real estate stocks," it said.

Firstly, GS said growth concerns may not have been fully priced into bond yields if higher energy prices persist, which would imply yields could stabilise. Secondly, it said commercial real estate does pass on inflation as a real asset, and in fact the bank's coverage passed on about 21% like-for-like rent growth on average over 2021-25, ranging from 0% to 30%+ depending on the sub-sector.

It said Landsec has higher-yielding retail exposure and solid FFO pass-through margins and could see upside from further acquisitions.

As far as downgraded Big Yellow was concerned, Goldman said it sees risk to higher vacancy and slower rate growth in a subdued UK economy. The bank said its 25/26 to 29/30 earnings per share estimates decline by 1% to 17% as it factors in higher vacancy, lower rate growth, a slower lease up of new developments and higher property expenses.

Goldman cut its price target on Landsec to 690p from 710p and on Big Yellow to 860p from 1,140p.

Reporting by Iain Gilbert at Sharecast.com