Best of the Brokers for 16 September 2015

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HOME RETAIL GROUP
Haitong Investment Bank has reduced its “fair value” target by 18 per cent to 115p to reflect greater uncertainty over longer term success of Home Retail Group’s modernisation plans for Argos. The broker said that promotional spend in the
run-up to Black Friday and Christmas seemed “defensive and therfore negative”, especially given that it is such a low margin business. It has therefore reiterated its “sell” rating.

CAPITAL & COUNTIES PROPERTIES
Strong momentum at Capital and Counties’ Covent Garden estate and Earls Court development has prompted Investec to raise its target price to 495p from 426p previously and reiterate its “buy” rating. The property developer is making progress on a number of schemes, which is creating further value at its two London estates. As a result, the broker has also raised its net asset value growth forecasts for this year and 2016 by 13 per cent .

ZOOPLA PROPERTY GROUP
Jefferies has upgraded its full-year revenue and underlying earnings estimates for Zoopla by £6m and £1.5m, respectively, to more accurately to reflect the acquisition of uSwitch and its contribution to the business. The broker has retained its target price of 400p, which implies an upside of more than 80 per cent and also reiterated its “buy” recommendation. The key risks to Jefferies’ estimates are the threat of the online portal OnTheMarket and integration risks related to the uSwitch acquisition.