To appear in Best of the Brokers, email your research to email@example.com
HOME RETAIL GROUP
Cantor Fitzgerald believes Home Retail Group has reached rock bottom after a year of underperformance in the stock. It has therefore upgraded its recommendation from “hold” to “buy” and kept its target price steady at 195p. The broker said that Homebase could be sold over the next year following the restructuring of its store estate, paving the way for Home Retail to make better use of its balance sheet while Argos is on the path to becoming a hybrid retailer and logistics specialist.
Sainsbury’s is set to release its second quarter trading update tomorrow, with Shore Capital analysts predicting a decline in like-for-like sales of around 0.5 to 1.5 per cent, excluding fuel. This is helped by relatively easy comparatives on last year, when it posted a 2.8 per cent decline. The broker said it plans to revisit its negative stance on the stock, but for the time being it has reiterated “sell” with a target price of 226p.
LAND SECURITIES GROUP
Land Securities updated analysts on the retail strategy for the group at a capital markets day at Bluewater last Friday. Panmure Gordon said that the themes addressed during the day were consistent with its views and concluded that rents are set to grow strongly in strong retail destinations such as Bluewater. The broker said that it continues to be positive about the prospects for the group’s portfolio and has retained its “buy” recommendation as a result, with a target price of 1,598p.