Best of the Brokers for 10 May 2013

COMPASS GROUP
Panmure Gordon has issued a “trading sell” rating on the caterer, advising investors to take profits ahead of interim results on 15 May. While the broker expects the results to be in line with forecasts, it reckons the stock is holding downside risk, especially given the chance of a gloomy outlook on Europe. Panmure keeps its 12-month “hold” recommendation and target of 820p.

INTERCONTINENTAL HOTELS GROUP
Morgan Stanley has added the hotelier to its Europe Best Ideas list following recent dips in the share price, keeping an “overweight” rating and 2,300p price target. The broker last week raised its target price on the company’s strong foundations citing its pipeline of new rooms, the potential to sell more property and growth in revenues per room.

DIAGEO
Liberum Capital has a “buy” rating on the drinks firm following the news this week that chief executive Paul Walsh is leaving in the summer. The broker sees the new boss Ivan Menezes as a positive step but does not see a significant change in strategy at Diageo. Liberum thinks he will ramp up growth in emerging markets, buy tequila and bourbon brands and drive margin expansion.