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Shore Capital cut its rating on the outsourcing firm to “sell” from “hold” at 946p as the growth pace has been slower than expected despite winning the Barnett Council’s contract in November. The broker has not increased its forecasts for the firm following a quarterly update last week, and its earnings estimates remain below consensus for this year and 2014.
ROYAL BANK OF SCOTLAND
Numis Securities upgrades the lender to a “buy” rating from “hold” and increases its target price to 410p from 308p. The broker cites an undervaluation of the US business and a continuation of UK retail banking profitability as reasons for its positive view on RBS. Numis also points out that the market is expecting large cost reductions for the lender’s profitability to continue into 2014.
UBS downgrades the travel group to “neutral” from “buy” but raises its target price to 170p from 125p to reflect a lower financial risk after the firm’s refinancing package. The broker acknowledges operational improvements but states that the group’s upwardly revised targets leave little upside potential. UBS does not expect Thomas Cook to continue increasing its profitability over the next three years.