BEST OF THE BROKERS

BT
UBS rates the telecoms group a “sell” with a 12-month target price of 120p. The broker forecasts a four per cent fall in revenue when BT announces its quarterly results next Thursday, and believes the company’s huge pension deficit will remain the primary focus. It also predicts that the firm will have made moderate cost cuts.

BABCOCK
Brewin Dolphin rates the support services group a “buy” with a 12-month target price of 710p. The broker believes Babcock has underperformed in the last month, and that its interim results due on Tuesday should reassure shareholders that the investment case is intact. Brewin adds that the weakening of peer Serco will aid the firm.

NEXT
Arden Partners rates the retailer an “add” with a reduced target price of £23.50. Despite the firm’s disappointing results earlier in the week, the broker sees encouraging signs in its earnings per share growth record and current modest rating. However, Arden expects M&S to impress more when it brings out interim results next week.