Broker tips: Segro, Tullow Oil, BBA Aviation

(ShareCast News) - Segro's shares climbed on Friday as Investec reiterated a 'buy' rating, hailing the company's full year results.The property developer reported its full year net asset value (NAV) rose 21% to 463p a share, while pre-tax profits increased to £686.5m from £654m.The company said its operating and portfolio performance reflected the active management of its assets, positive market dynamics and the strategic repositioning of its portfolio, which was now almost exclusively focused on industrial and logistics properties."Strong numbers (NAV, earnings and dividend are all ahead), impressive operational metrics (4.8% vacancy rate) and a robust balance sheet. Segro's refocused portfolio continues to benefit from structural growth (e-commerce-driven supply chain optimisation) and the cyclical recovery," said Investec analyst Alison Watson."We expect this to deliver an above sector average NAV growth outlook. This is coupled with an attractive above sector average dividend yield (3.8% vs 3.2% av). SEGRO has outperformed year-to-date, but de-rated from a 5.8% premium to a 4.1% discount to spot NAV over this period (post 2007 av: 10.3% discount). Reiterate 'buy'."The target price was left at 490p. Charles Stanley upgraded Tullow Oil to 'hold' from 'sell' given the sharp drop in the share price and potential de-gearing.The brokerage noted the shares are down 58% over 12 months.Charles Stanley said that with net debt of $4bn, Tullow has facility headroom of $1.9bn, while banking discussions with regard to March 2016 re-determination have begun.With an oil price at $34 per barrel and 2016 capital expenditure plans still high, net debt will likely rise again this year, it said, although it pointed out that Tullow acted very early to reset the business to a low oil price environment."The TEN project (offshore Ghana) begins production and assuming a recovery in the oil price to $40 per barrel, Tullow could begin to reduce its level of net borrowings in 2017. Further spending reductions ($0.3bn capex is possible in 2017) and disposals could help to de-gear the balance sheet."It said Tullow has benefited from a strong hedging position, which will continue to lend support this year and the next.Last year, the realised oil price net of hedging was $67 a barrel compared to a market price of $52 and this year, about 52% of production is hedged at $75 per barrel.Still, it said the shares remain relatively high risk given volatility and uncertainty surrounding the oil price. Investec initiated its coverage on BBA Aviation with a 'buy' rating and a target price of 225p on Friday.The broker said the stock has performed poorly since its proposed acquisition of Landmark Aviation was announced last September, "which we believe is largely due to concerns over business and general aviation movements and leverage"."We address both issues, and highlight that the economic outlook for BBA looks considerably better for the company than for the wider US business jet market," said analyst Sam Bland.Investec sees BBA Aviation as attractively valued for investors that are bullish on the US economy, Bland said.The analyst added that while Investec was cautious on the progress of the US economy, it doesn't expect a major slowdown yet."Any change to this outlook would cause us to revisit our investment case," Bland said.