Best of the Brokers for 22 September 2015

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BAE SYSTEM
Haitong Research have maintained their “buy” rating for BAE Systems, despite their earnings forecasts for 2015 and 2016 falling by seven and eight per cent respectively. The earnings downgrade came after analysts reduced their Eurofighter build rate assumption for 2016 from 35 units to 20 units. In light of the fall in expected earnings, Haitong Research lowered its Fair Value for BAE stock from 615p to 560p.

PENNON GROUP
Whitman Howard have upgraded Pennon Group to a “buy” rating with an unchanged target price of 892p after it released positive figures in May. Pennon Group will hold a briefing on South West Water, and Whitman Howard expects a positive message. They believe that South West Water is well placed once OfWat’s Price Review 14 concludes, with the likely acquisition of Bournemouth Water.

EMPIRIC STUDENT PROPERTY
Already halfway to meeting an IPO target set by management to have 10,000 beds in five years, the premium student housing firm was given a “buy” rating with a target price of 125p from analysts at Jefferies. Demand for UK higher education is at an all-time high with undergraduate numbers rising by 10.4 per cent since 2010. ESP is poised to take advantage of increased demand for premium accomm­odation from non-UK and post-grad students in the fragmented student housing market.