Broker tips: Intertek, Fevertree, Antofagasta

Intertek's share price woes are overdone, believes Berenberg, upgrading the product testing, inspection and certification specialist to 'buy' from 'hold'.s on Friday.

Intertek’s share price has fallen more than 20% since hitting an all-time high of just over £60 in late July, since when it has agreed to shell out $480m to buy US-based 'people assurance solutions' provider Alchemy and reported a solid set of interim results.

Berenberg said the price fall "leaves investors with an attractive entry point into a well run business with attractive end-market exposure within the TIC industry".

The FTSE 100 company has one the highest exposures to process- and products-related services of 8% and 54% of EBITDA respectively in the industry and the lowest exposure to more cyclical asset-related services of 17%, Berenberg said, "making it a strong structural growth story to own through the cycle".

Fevertree's shares may appear expensive, but Berenberg said the premium mixers market could triple by 2022 and “dramatically” increase the AIM-listed company's earnings.

The drinks company’s expansion into the US market is supported by strong support for premium mixer market penetration due to the increasing popularity of spirits and the increasing prevalence of bottled mixers in both the off-trade and on-trade channels, Berenberg said in a note to clients on Friday, reiterated its ‘buy’ rating for the company's shares and raising its target price to 4,250p from 3,350p.

US spirits consumption expanded at a notable rate for several years, with volumes rising at a 2.6% compound annual growth rate so far this decade and the market’s value has increased at a 4.3% CAGR from 2010 to 2017, according to Euromonitor.

Copper prices are likely to remain strong in coming years, Goldman Sachs said on Friday, but analysts downgraded Antofagasta for several reasons.

BHP Billiton this week predicted a bright future for the orange metal, with China's 'Belt and Road' plan driving a surge in demand of around 7% of annual demand over the next five years.

Barring a macro event such as that of 2007-08, Goldman were confident that demand is "likely to continue to grow in the next few years”.

Furthermore, analysts added that supply was an equally important part of the equation: “We believe the market continues to underestimate the lack of supply growth in copper, and therefore remain positive on the copper price.”

As such, the lack of investment in developing new supply "will see a deficit eventually forming in early 2020s".

Antofagasta, however was downgraded to 'sell' from 'neutral' over what is seen as a stretched valuation, relatively poor free cash-flow generation compared to its peers, and “uncompelling” growth options.