Best of the Brokers for 23 November 2015

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Analysts at Cantor Fitzgerald have maintained their “buy” recommendation for Breedon Aggregates following the agreement for Breedon to buy Hope Construction Materials for £336m. Cantor estimates the deal to be around 19 per cent accretive to earnings per share in the first full year of combination and up to 35 per cent accretive on additional synergies. This, combined with strong outlook for demand, mean analysts have upped their target price for the company to 75p from 60p.

Numis analysts have reiterated a “hold” position for Spectris, due to a more difficult than expected second half, with underlying revenue down around 1.5 per cent year-on-year for 2015. Performance in China has held up, contrary to fears and there has been some positive momentum for new product launches. The target price has been lifted to 1,835p from 1,704p.

Killik has kept a “hold” rating on Melrose following a strong performance at its utility metering company Elster, which is being sold to Honeywell, on course to complete in the first quarter of 2016. Analysts think valuation for Melrose is high, with the company trading at a premium to the underlying value of its business components. Trading remains in line with expectations albeit potentially towards the lower end of range, and it is hard to see any momentum building at Melrose.