Good Afternoon ,
Today Merrion re-initiated coverage of Kingspan with a Buy recommendation and a target price of eur7.65. I personally am very glad we have got formal coverage of this one back onstream again. Its a great company. Sure they did suffer from a big drop in the top line in the global recession but the upswing is definitely on here with 20% underlying sales growth supplemented by the benefits of the CCIE acquisition from CRH. We are looking for 26% CAGR from here for the next three years excluding any further acquisitions. Not cheap at 21x current year earnings but given the growth rates in prospect. A quality stock with strong management an excellent track record and momentum growing again. Stock has been range bound for ages it seems , the IMS this morning should ease it into a new higher range from here. I agree with the recommendation.
Ryanair and Aer Lingus should benefit from the falling oil from here , we have seen the signs of investors beginning to warm to this theme.
CRH is still the one stock in the construction sector that we continue argue is the one to short against the secotr given its valuation and our view of its US prospects. There are easier ways to access the recovery in Europe and the more attractive parts of the USA without paying the multiples that are involved with CRH here. It has however become a great range trading stock so expect to see the bear side closed out if the stock gets back to the bottom of its range again.
Fyffes please d the market with an IMS and for them a welcome upgrade to guidance helped by the weaker dollar and stronger banana prices in Europe and better efficiencies.
Petroceltic announced its intention to raise approximately US$60 million (£37 million) through an issue of new ordinary shares of by way of a placing with both new and existing institutional investors to advance the Company's enlarged drilling and appraisal programmes in Algeria, to advance drilling plans for the Rovasenda prospect in Italy and for general corporate purposes, including new ventures. The book will open with immediate effect. The timing of the closing of the book, the identity of Placees, pricing and the basis of the allocations are at the discretion of the Company and the Joint Bookrunners. Interesting to see Bank of America Merrill Lynch added to the corporate broking ticket. Looks ok if they are backing this one. PCI has a good story to tell. I am a fan having worked with Tom Hickey before so I am happy to follow this one from here.
Have a good evening
Liam
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