Best of the Brokers for 20 October 2015

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More bad news for Associated British Foods (ABF), as Berenberg analysts downgraded the food processing and retailing company from “hold” to “buy” while keeping the target price at 3,450p. While ABF’s share price has increased by 10 per cent since Berenberg analysts upgraded the stock to “buy” in February, they said yesterday that it was difficult to see any catalysts for ABF’s growth in the near term. Last month, ABF confirmed that its adjusted operating profit will decline for the year.

Following the news that beverages giant Diageo has agreed to sell its major wine interests to Treasury Wine Estates in a deal worth £320m, S&P Capital analysts say that they are maintaining their 12-month target price at 1930p. S&P analysts price Diageo at a discount compared to its peers, but said yesterday that the lower price is “justified” thanks to Diageo’s below-industry earnings growth.

Analysts at Accendo markets say that shares in Fresnillo, the Mexican metals mining company, are “set to be the victims of technicals” amid a weakening US dollar and expectations that a Fed rate hike has been pushed back to at least next year. Accendo also pointed to weakening Chinese demand following disappointing macroeconomic data out of Beijing to justify its “sell” rating.