JP Morgan upgrades Morrison’s to “overweight” ahead of its results on 11 March. Calculates that Morrison’s has grown three-fold over the past seven years, helped by its Safeway purchase. Says its sales densities are up by around 30 per cent, and reckons it has the “strongest topline momentum in the UK,” as well as the “greatest margin upside”. Says its current valuation makes buying the shares “compelling.”
Evolution maintains its “neutral” rating on BSkyB following last week’s first half results. Despite delivering on revenues, it says it remains concerned about Sky’s ability to meet market expectations of 50 per cent earnings per share growth to 2013. “We like Sky’s business model, but see a constant need for reinvestment dragging back mid-term earnings per share forecasts,” Evolution says. Believes a re-rating of the shares looks “unlikely”.
Credit Suisse reiterates its “outperform” rating on Smiths Group citing increasing momentum and increases its target price for the shares to 1,120p from 1,000p following an update meeting with management. Says it now has further confidence in a turnaround in the medical division, as well as a recovery in the detection and John Crane businesses. “Management are making good progress with restructuring,” it says.