The Expert View: EnQuest, Anglo American and Spectris

We’ve rounded up some of the best comment from top analysts to give you their views on EnQuest, Anglo American, Spectris, African Barrick Gold and Yell Group.

Key stats
Market capitalisation	£943m
No. of shares out	803m
No. of shares floating	627m
No. of common shareholders	not stated
No. of employees	220
Trading volume (10 day avg.)	3m
Turnover	369m USD
Profit before tax	17m USD
Earnings per share	0.02 USD
Cashflow per share	0.19 USD
Cash per share	0.03 USD

*Correct as at 17 Feb 2012

Liberum Capital tips EnQuest on impressive growth outlook

Andrew Whittock, analyst at Liberum Capital, has upgraded North Sea-focused oil explorer EnQuest (ENQ.L) to 'buy' from 'hold' as he believes the company is poised to expand its presence in the UK Continental Shelf.

Shares in EnQuest jumped after the group began buying up stakes in the Kraken oil discovery, Whittock said, and he believes more acquisitions look likely as EnQuest has the technical and financial capacity needed to secure more deals. However, the analyst said, the current share price 'barely reflects asset value and not growth'.

'We anticipate continued delivery will encourage some recognition of growth potential and have moved to valuing the shares off a target cash flow multiple,' he added. Whittock now has a price target for the firm of 144p.

Shares in EnQuest closed at 118.6p on Friday, up 1.6p.

Key stats
Market capitalisation	£35,384m
No. of shares out	1,323m
No. of shares floating	1,197m
No. of common shareholders	not stated
No. of employees	100000
Trading volume (10 day avg.)	5m
Turnover	17,813m USD
Profit before tax	4,169m USD
Earnings per share	3.30 USD
Cashflow per share	5.04 USD
Cash per share	3.09 USD

*Correct as at 17 Feb 2012

Jeffries disappointed by Anglo American's meagre second-half dividend

Christopher LaFemina, analyst at Jeffries, has retained his 'buy' recommendation on mining giant Anglo American (AAL.L) following results that were in line with expectations, but he has flagged up the disappointing dividend as a concern.

Anglo reported second-half earnings before interest and taxes of $5.1 billion, which was in line with consensus expectations, and underlying earnings of $2.48 a share, well above the consensus estimate of $2.20.

Given the strong results, LaFemina was disappointed that the second-half dividend rose just 15% year-on-year to $0.46 a share. 'Anglo has the strongest balance sheet and highest free cash flow yield of the majors, yet had the weakest dividend increase and lowest payout ratio,' he said.

'While Anglo shares should be good value, we are somewhat concerned about the company's lack of capital returns,' LaFemina cautioned.

Shares in Anglo American closed at £26.74 on Friday, up 30p.

Key stats
Market capitalisation	£1,963m
No. of shares out	116m
No. of shares floating	114m
No. of common shareholders	not stated
No. of employees	6400
Trading volume (10 day avg.)	0m
Turnover	£902m
Profit before tax	£96m
Earnings per share	81.60p
Cashflow per share	106.02p
Cash per share	52.14p

*Correct as at 17 Feb 2012

Peel Hunt downgrades Spectris as share price soars

Dominic Convey, analyst at Peel Hunt, has downgraded precision instruments maker Spectris (SXS.L) to 'hold' from 'buy' as the shares have almost hit his target price.

The company, which was founded in 1915 and at one time built bombers for the RAF, recently released its full-year results, which showed that sales rose 23% year-on-year while adjusted profits before tax leapt 45% to £191.6 million.

Convey said the 'strong results confirm the progress on margin and the continuing push into emerging markets', and he added that the strong management team and conservative guidance compensate for limited visability on the year ahead.

Nonetheless, with the shares only just shy of his price target of £17.00, Convey has opted to scale back his recommendation.

Shares in Spectris closed at £17.05 on Friday, up 45p.

Key stats
Market capitalisation	£1,850m
No. of shares out	410m
No. of shares floating	106m
No. of common shareholders	not stated
No. of employees	4577
Trading volume (10 day avg.)	1m
Turnover	771m USD
Profit before tax	174m USD
Earnings per share	0.42 USD
Cashflow per share	0.65 USD
Cash per share	0.90 USD

*Correct as at 17 Feb 2012

Numis downgrades African Barrick Gold on weaker 2012 outlook

Cailey Barker, analyst at Numis, has downgraded mining group African Barrick Gold (ABGL.L) to 'add' from 'buy' after full-year results failed to meet her expectations.

Earnings per share (EPS) came in at $0.67, missing Barker's forecast of $0.71 and the analyst consensus of $0.69. The company's outlook for this year isn't encouraging either, with production expected to be flat while costs are predicted to rise as a result of power issues.

Barker has subsequently revised down her 2012 EPS forecast to $0.68 from $0.77 previously.

Dividends from the firm, meanwhile, rose to a total of 16.1 cents, double last year's figure and ahead of Barker's forecast. The dividend policy has been lifted to 15-30% of net profits, which the analyst said was 'perhaps an admission that the acquisition strategy has been unable to cement anything tangible'.

Shares in African Barrick Gold closed at 443p on Friday, down 4.9p.

Key stats
Market capitalisation	£110m
No. of shares out	2,368m
No. of shares floating	2,287m
No. of common shareholders	not stated
No. of employees	13414
Trading volume (10 day avg.)	24m
Turnover	£1,878m
Profit before tax	£47m
Earnings per share	2.03p
Cashflow per share	9.38p
Cash per share	8.47p

*Correct as at 17 Feb 2012

Credit Suisse predicts more revenue declines at Yell Group

Simon Baker, analyst at Credit Suisse, has downgraded his revenue forecasts for Reading-headquartered directories business Yell Group (YELL.L) following news that revenues missed expectations in the latest quarter.

In the four months to 31 December group revenues hit £382.8 million, down 15.1% on a year-on-year basis and 5.5% below consensus expectations. Earnings before interest, taxes, depreciation and amortisation (EBITDA), meanwhile, beat consensus expectations by 3.4%, coming in at £108.6 million, down £12.7 million on the previous year.

Baker said this has become a familiar pattern: 'This reflected the same underlying trends: continued deterioration in its core directory businesses offset by good cost management short term to make EBITDA expectation, but it is the topline trajectory that prompts us to trim our revenue assumptions.'

The analyst has trimmed his full-year revenue forecast for 2012 by 2.7% to £1.63 billion, and his 2013 forecast by 5.6% to £1.48 billion.

Shares in Yell Group closed at 4.5p on Friday, down 0.2p.