Citigroup believes the market will take until the end of 2010 to get more comfortable with Michelin’s investment case. The broker, which rates the stock as “overweight”, estimates the €1.2bn rights issue causes around 11 per cent dilution, which implies new cash is utilised at a similar return as the rest of the business today.
Credit Suisse initiates coverage of Paddy Power with an “outperform” rating and target price of €30.70. The broker says an operationally leveraged UK retail expansion for Paddy Power and market share growth in online should provide scope for revenue-driven consensus upgrades over the next six to 12 months.
Following another set of strong results for Domino’s Pizza, Seymour Pierce is upgrading forecasts for the full-year. The broker expects before tax profit for the pizza group to rise from £36.6m to £37m and says that if the current trend continues, Domino’s has the potential to beat this forecast. The broker gives the stock a “buy”.