Nomura has reiterated its neutral rating and 500p target for oil titan BP saying that while the 14% increase in the quarterly dividend is welcome, the Macondo oil settlement remains 'the elephant in the room'.

Adjusted replacement cost operating profit came in at $4,986m, above both consensus and Nomura's estimates. The fourth quarter dividend was also raised to eight cents a share, while the broker was forecasting seven.

"Ultimately, 'the elephant in the room' remains a potential wider settlement on Macondo and there was little update on this. We believe on balance a settlement should be supportive given BP has on many occasions stated that it is willing to settle 'but not at any price'," the broker said.

"With this in mind and in the backdrop of a relatively weak quarter from its key UK peer Shell, we think the shares are well underpinned."

UBS has raised its target price for oil and gas giant Cairn Energy from 291p to 370p after the shares went ex-dividend yesterday with a share consolidation.

The broker also said that it is "more comfortable with the story" after its meeting with Cairn's management last week, and has subsequently cut the discount to net asset value that it previously used to set its price targets.

"Despite this, we do not see yet a compelling Buy case with unknowns on timing of announcement (i.e. could take an indefinite period for Cairn to go ahead with a deal), political/asset risks, and once the deal is announced, the time taken to actually close the deal," analysts said. UBS maintains a neutral rating on the stock.

Peel Hunt has maintained its buy rating for insurance and reinsurance company Amlin, saying that losses are in line with expectations and there are signs of some improved pricing in certain segments.

"Amlin has one of the larger exposures to catastrophe business in the sector and looks set to benefit in 2012 on the back of losses in 2011," said Peel Hunt analyst Sarah Lewandowski. "The Thailand loss estimate is within expectations, not as bad as some feared, and we have further clarity on Amlin capitalising on segments of improved pricing," she said,

The broker maintains its fair value target price of 434p, which it says gives 29% potential upside for Amlin.

BC

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BP (BP.) share price
Amlin (AML) share price
Cairn Energy (CNE) share price