Brokers' views: Numis Securities

A trio of FTSE 250-quoted companies receive buy, add and hold recommendations respectively from Numis this month. Worth holding on to at 40.38p is house builder Taylor Wimpey, whose full-year trading update contained ‘few surprises’.

Better positioned for 2010 with an increased order book in the UK and US and dramatically reduced debt, thanks to internal cash generation and last year’s £500 million funding, Taylor Wimpey ‘looks broadly fair value’ for now.

A fellow second-liner, financial bookmaker IG Group, remains a buy, with the broker having upgraded forecasts on the back of sparkling interim results. These revealed sales up 14 per cent to £144 million, 34 per cent growth in PBT to £78 million and a 25 per cent interim dividend hike.

Long-term opportunities

IG ‘continues to grow its geographical footprint, with initiatives in Portugal, New Zealand and South Africa showing early signs of promise’, argues Numis, raising its price target to 475p to reflect ‘better long-term opportunities for revenue and earnings growth’.

Full-year profit and earnings estimates have been upgraded to £145.8 million and 28.2p respectively, with an improved £161.3 million and 30.7p now pencilled in for 2011, placing the 391.5p shares on a relatively undemanding 12.75 times 2011 earnings.

Elsewhere, defence technology counter QinetiQ may have warned on profits twice in a matter of weeks due to order delays, but the broker maintains its positive recommendation. At 142p, the shares still inhabit ‘add’ territory – being below the newly downgraded 165p price target – with Numis espying positive transformation potential under newly installed CEO Leo Quinn.