Best of the Brokers for 2 May 2013

Jefferies has initiated coverage of the fashion retailer with a target price of 1700p and a “buy” recommendation. The broker said Ted’s British brand heritage and “niche positioning within the attainable luxury ready-to-wear segment” give the company strong growth potential in international markets. Over the next three years, Jefferies forecasts sales of 13 per cent at a compound annual growth rate.

Shore Capital has downgraded its recommendation for the company from “buy” to “hold” and maintained its target price of 75.5p. The broker said the downgrade reflected its concern over the lack of clarity in the results surrounding the reduction in the UK conversion rate in the second half of the year. However, it continues to believe there will be upwards earnings momentum during the year.

WH Ireland has upgraded Sanderson from “outperform” to “buy” with a target price of 57p after the group this week issued a strong pre-close trading statement, reporting a 10 per cent rise in revenue to £6.4m and operating profits up 12.5 per cent to £0.9m. The broker said results are weighted towards the second half and Sanderson needs a 22 per cent jump in revenues over the first half to meet its forecasts.