Broker tips: Tyman, Informa

Analysts at Canaccord Genuity raised their target price on door and window components supplier Tyman from 285.0p to 325.0p on Monday, citing recent macro and sector news-flow.

Canaccord said it now had "increased confidence" that Tyman would enjoy "continued good trading momentum" into the end of the year, leading it to tweak profit estimates higher despite also factoring in "a modestly stronger sterling" and a negative currency translation impact.

The Canadian bank stated that given "the robust underlying demand", Tyman's current issue was more likely to be dealing with and managing industry-wide supply constraints rather than concerns about the top line holding up.

"With a generally supportive supply-demand dynamic being seen in key markets currently, we suspect that discussions will be supportive to recover any cost inflation in 2021," said Canaccord, which also reiterated its 'buy' rating on the stock.

Canaccord also highlighted that with key uncertainties like the US election, the UK's second lockdown closing down the industry and the strength of momentum going into the fourth quarter now receding, it had "greater confidence" in its estimates and valuation, albeit while continuing to acknowledge macro risks associated with the Covid-19 pandemic.

Analysts at Berenberg downgraded publishing firm Informa from 'buy' to 'hold' on Monday, stating it could now only see a "more limited upside" in the stock.

Berenberg said that while it continues to believe that the events industry will bounce back "strongly" from the Covid-19 pandemic, it also thinks that this fact has now been priced into Informa's share price - now up by 40% from the 400.0p level at which the group raised capital in April.

The German bank, which valued the group assuming that pre-Covid-19 profitability in the events business can be achieved by 2023, did up its target price on the stock from 535.0p to 610.0p but said its analysis suggested that the aforementioned recovery was now "more or less priced in".

For further material upside to be achieved, Berenberg thinks fundamental re-rating would be required but, given that the pandemic had demonstrated the vulnerability of the events business, the analysts said it was "hard" to see why a re-rating was "justified".

"We think Informa is a high-quality business, but we now see more limited upside in the shares," concluded the analysts.