Best of the Brokers for 26 April 2013


Investec has increased its target price on the dairy products company from 447p to 466p and moved its recommendation to “add” from “buy” after it revised its capital structure, using some of the proceeds from the sale of St Hubert to redeem loan notes and inject a lump sum into its pension fund. It has also upgraded its full-year earnings outlook for both 2014 and 2015 by around eight per cent.

Following an update on Wednesday that highlighted operational and financial issues in the firm’s German contracts and a weak French performance, UBS has reduced its estimates for first half adjusted profits before tax to £21m from £33m to account for lower gross margins. The broker has lowered its target price to 530p from 600p, and maintained its “buy” rating on the stock.

Westhouse has downgraded the digital marketing and public relations group from “buy” to “add” and dropped its target price from 133p to 114p, predicting that headwinds in the second half and higher tax will impact the full year. Though the broker has downgraded its forecasts, it welcomes the firm’s restructuring and digital investment plans, which should enhance long-term revenue growth and margin prospects.