Wednesday tips round-up: InterContinental Hotels, Cadbury Schweppes, Domino's Pizza
InterContinental Hotels Group's (IHG) strong numbers pushed the shares 56½p higher to 828p, a multiple of about 16 times 2008 earnings. That is a modest premium to its peers, but, given the defensiveness of IHG's model, is well deserved. Hold, says Times. The Independent agrees and also says Hold.
The near-term prospect of Cadbury Schweppes' demerger - which will allow the merits of confectionery to come to the fore - should underpin the shares at 579½p. However, at 17 times current-year earnings, they can be no more than a hold for now, says the Times.
Restaurants have been waving profit warnings instead of menus at the stock market. The credit crunch has led to a sharp slump in takings. No such worries for Domino's Pizza. The company should make profits of nearly £22m in 2008, putting the shares on an earnings multiple of 22. Domino's has consistently delivered. Buy, says the Independent.
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Although net debt of £366 million and a British pension deficit are a concern, they should not overshadow Croda's strong pricing power and market position. At 575½p, or nearly 13 times, the shares are inexpensive, given forecast earnings growth of 25 per cent this year. Buy, says the Times. The Telegraph agrees and says that the business looks robust enough to deliver. Buy.
Morgan Crucible is now much less cyclically exposed than in the past. The promise of more bolt-on acquisitions, share buybacks and continued strong dividend growth leaves the shares looking attractive at 9 times 2008 forecasts, says the Independent.
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