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Sellside stories

● Morgan Stanley has upgraded Centamin, operator of the Sukari gold mine in Egypt, to “overweight” with a 125p target price.

Operational problems have dragged Centamin to a two-year low, having lost 45 per cent in the year to date, which ignores the recovery potential next year, Morgan Stanley said. “We view Sukari as a quality asset, in the first quartile of the cost curve. Yet a disappointing 2018 has made investors more bearish,” it said. “2019 should show a very different picture.”

A gold production target of 577,000 ounces next year, up from 480,000 in 2018, is “not demanding or unrealistic in our view, and the quarterly run-rate required has already been hit three times in last nine quarters”, Morgan Stanley told clients. “In addition, investor positioning in gold is at its most bearish for the 18 years since we have data, and our strategy team found in a review of 36 [global emerging markets] funds that Centamin was a large underweight position. Any shift in sentiment could be positive for both the commodity and equity.”

● JPMorgan Cazenove and Deutsche Bank started coverage of Aston Martin with “overweight” and “buy” recommendations respectively. Both brokers put a £20 target on the carmaker.

“Aston Martin . . . caters to a very exclusive, underpenetrated customer group that is more resilient to economic cycles and much less price sensitive than the average car buyer. The company has been professionalised over the last four years. The new management team has vast industry experience, a successful track record and ambitious plans. A mix of portfolio and geographical expansion, rising average selling prices and tight cost control could yield compound annual ebitda growth of 26 per cent from 2017 to 2022.”

Deutsche Bank

● In brief: Dialog Semiconductor upgraded to “hold” at Kepler Cheuvreux; Eiffage raised to “buy” at Société Générale; Evonik cut to “neutral” at Citigroup; NB Distressed Debt Investment Fund cut to “neutral” at Stifel; Nordex downgraded to “sell” at Société Générale; K+S raised to “neutral” at Credit Suisse; Sodexo downgraded to “underweight” at JPMorgan.

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