Broker tips: Carnival, Countrywide, Circle Oil

Credit Suisse has reiterated its ‘outperform’ recommendation on cruise operator Carnival Corporation, saying that it is “maintain[ing a] positive view into 2015” after the company beat forecasts with its fourth-quarter results.

Credit Suisse said: “We continue to see CCL shares as attractively valued particularly versus longer-term earnings power in a normalized environment. Given that lodging valuations are fuller and Macau gaming trends remaining troubling, we think cruise stocks may benefit from further investor rotation.”

Weak mortgage approvals in the UK have prompted Numis Securities to lower its forecasts for estate agency group Countrywide, though the broker still rated the stock as a ‘buy’.

“Whilst we reduce estimates in this note, highlighting the high degree of uncertainty in the housing market at present, we contend that Countrywide is too cheap. We feel that at the current share price the market is giving no credit to the improving cash generation of the business and also the longer-term recovery potential of the housing market.”

Investec said it sees substantial upside to shares of oil group Circle Oil after the company announced a “significant gas discovery” onshore Morocco.

“The well encountered a thicker sand section than pre-drill prognosis, flowed at the highest rate of the campaign and should result in an increase to existing reserves booked in Morocco,” the broker said. It added that the stock continues to trade at a “deep discount” of over 60% to the value ascribed to Circle’s discovered barrels.