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New Research on UK Banks and Insurers

Barclays, Prudential and RBS are amongst companies reviewed by Morningstar equity analysts in recent days

Holly Cook 31 August, 2012 | 1:38PM

In the past week, Morningstar analysts have released new research reports on UK-listed banks and insurers, plus a mega-mining stock, advertising giant and global beverages manufacturer. Click on a company name to read the latest Morningstar Research; click on the company ticker to view share price and fundamental data for that stock.

Anglo American (AAL) and Chilean state-owned copper miner Codelco reached an out-of-court accord regarding the fate of Anglo Sur a few weeks ago and Morningstar’s Daniel Rohr views this result as a decent outcome for the global mining giant.

Barclays (BARC) this week announced it has appointed a new CEO. Morningstar’s Erin Davis is, overall, pleased with the news that Antony Jenkins is stepping up, but she also has some concerns regarding his lack of investment bank experience.

BHP Billiton (BLT) reported underlying profits for fiscal 2012 down 21%, well below our more optimistic forecasts as Morningstar’s Mark Taylor had expected the firm to better defray the impact of higher crude prices. Still, BHP’s cash flow is brimming and the stock remains notable undervalued versus Taylor’s fair value estimate.

Diageo (DGE) reported robust 2012 results that have prompted Morningstar’s Thomas Mullarkey to hike his former-1,400p fair value estimate on the beverages company. Recent share price strength indicates that the stock is slightly overvalued at present, however.

Prudential (PRU) has seen a substantial jump in its Morningstar fair value estimate in recent days following analyst Vincent Lui’s review of long-run growth and return assumptions. The firm has grown faster and more profitably than other European insurers in the past few years.

Royal Bank of Scotland (RBS) formerly carried a fair value estimate of 300p per share but Morningstar’s Erin Davis has upped this estimate recently to account for the time value of money. Her base case valuation scenario now assumes assets will shrink around 10% in the short term and grow 3% annually in the medium term.

WPP (WPP) released results that show the advertising giant has improved profitability in the first half despite revenue deceleration. Morningstar’s Michael Corty believes the shares are slightly undervalued.

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Anglo American PLC1,497.50 GBX0.60
Barclays PLC229.65 GBX0.11
BHP Billiton PLC1,836.00 GBX-0.33
Diageo PLC1,847.00 GBX-0.32
Prudential PLC1,410.00 GBX-0.60
Royal Bank of Scotland Group (The) PLC351.30 GBX1.33
About Author Holly Cook

Holly Cook  is Managing Editor of Morningstar.co.uk