News

Ryanair's Michael O'Leary is notoriously gloomy and despite his dark warnings, JP Morgan is still expecting €109m pre-tax profits this year - cut from previous estimates of €306m.

This makes for a stratospheric prospective multiple of 43 times. Given the uncertainties, the shares are not worth chasing now. But long term, Ryanair remains attractive as one of the most likely winners from the coming airline shake-out. Hold says the Telegraph.

Being a listed company has been a miserable experience for the travel group Hogg Robinson. The group yesterday announced full-year pre-tax profits of £25.2m to 31 March, up from £12.9m the year before. However, Hogg Robinson is expecting a tough time this year, with the group's clients, especially those in the financial services sector, cutting back on employee travel expenses. There is certainly an argument to suggest that things cannot get worse and any forthcoming bid can only be a good thing. Buy says the Independent.

Investors that bought engineer Hamworthy at the start of the year have enjoyed bumper returns as the global price of energy has led to much greater demand for the group's services. There is little danger in buying Hamworthy shares, it is safe bet, but an appreciation to 600p in the next year might not be worthwhile for some. Buy says the Independent.

Profit forecasts could benefit from Hamworthy's planned return to the acquisition trail after a two-year hiatus: it has £48 million of cash and plenty of scope to consolidate its sector. That aside, the company's expected double-digit organic growth is attractive in itself, even at nearly 18 times current-year earnings. Buy on weakness says the Times.

The aircraft industry is in rude health. Presently, there are 3,700 new planes on order across the globe, more than ever before, which is great news for Umeco, a composite airline parts supplier. Brokers suggest the shares should reach at least 625p. Buy says the Independent.

A bid for market resercher Taylor Nelson to thwart its agreed merger with Gfk could yet come from ad group WPP, run by Martin Sorrell. WPP may be able to boost his earnings by 4% if it pays 300p, according to Morgan Stanley, while TNS-GfK may be able to find terms to sweeten their deal as a defence. That provides every incentive to sit tight for now. Hold says the Times.

At nearly 14 times current-year earnings, United Utilities trades at a premium to its peers, albeit offering one of the highest dividend yields. This suggests that while there is every reason for existing holders to hang on - not least the imminent capital return - there will be better entry points for first-time buyers says the Times.

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