Newspaper article The Evening Standard (London, England)

Reed Elsevier Looking a Safe Bet, Say the Brokers

Newspaper article The Evening Standard (London, England)

Reed Elsevier Looking a Safe Bet, Say the Brokers

Article excerpt

Byline: MICKEY CLARK

REED ELSEVIER is tipped by several brokers as a good two-way bet intimes of economic hardship, and the shares are seen as good value at the momentfor investors wishing to take the plunge.

UBS and rival ABN Amro today both made the shares a buy, with the formerclaiming that investors may be treated to an added bonus if the group sells themagazine and online assets of its B2B division.

ABN says Reed is its pick of the media sector, and certainly a share to own in2008. The company is expected to announce plans for cost savings of [pounds sterling]100million a year along with full-year results next month. It has all thedefensive qualitiesgood visibility, standalone catalysts, the potential benefits of consolidationsays ABN, which urges clients not to rule out a merger with German rivalWolters Kluwer.

UBS says Reed is not cheap compared with other companies in the media sector,but looks good value compared with other defensive situations. It continues torate the shares a buy and has jacked up its target from 740p to 810p.

Reed was today 41.2p higher at 665p.

Shares generally got off to a flying start, the FTSE 100 index rising 37.3points to 6373.0 in thin trading. Glaxo-

SmithKline was boosted by positive comments from Goldman Sachs, and the sharesgained 21p to 1342p. Pub operator JD Wetherspoon rose 7p to 3383.4p. Chairmanand founder Tim Martin has taken advantage of recent weakness in the shares topick up a further 297,127 at 333.88p each. That lifts his stake to 32.57million shares , or 23.01%.

Sluggish beer sales and the smoking ban have seen the price slump from 772p inthe past year.

Merrill Lynch has cut Petrofac from buy to neutral because the shares haveenjoyed a good run and are now looking expensive. They have soared 30% sinceOctober, outperforming rivals such Wood Group and Expro International.

The broker says the market has been prepared to reward Petrofac for itssuperior project execution, which has led to significant earnings upgrades andsteady progress in the development of its oil and gas production portfolio andnew contract awards. …

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