Best of the Brokers for 1 May 2013

INVENSYS
Societe Generale has upgraded the engineering and software firm from “hold” to “buy” and raised its target from 330p to 415p. The broker thinks the slimmed-down firm is worth up to 30 per cent more than its current share price dictates, or around 460p per share, if a takeover bid emerges once the sale of its Rail division is complete. The firm provides investors with a pure play on process automation.

GREGGS
UBS has kept its “buy” rating on the high street bakery firm but cut its 12-month price target from 600p to 540p following a profit warning on Monday. While the broker thinks the baker has reached a sales nadir for the year, it has trimmed its forecasts for the next year and now expects a 2.5 per cent fall in like-for-like sales. UBS also sees margin pressure from promotional activity.

SMITH & NEPHEW
Panmure Gordon rates the medical products group “hold” and has a target price of 720p ahead of the firm’s first quarter results tomorrow. The broker expects flat revenues of $1.08bn and a slight drop in margins. Smith & Nephew’s orthopaedics business is set to be particularly weak, Panmure adds, though it hopes to signs of growth in other parts of the company.