RBS rates the building materials firm “buy” with a raised target price of £12.95. The broker sees the firm’s purchase of BSS Group last month as an attractive earnings driver over the next two years until the underlying market recovery takes over in 2013. It adds that the acquisition gives the company significant buying power.
Seymour Pierce rates the retailer “buy” with a target price of £25. The broker believes Next had a passable Christmas, demonstrating the strength of its multi-channel sales model. Expectations were low, according to the broker, and the firm would have performed at the top end of its guidance if it had not snowed.
JP Morgan Cazenove has chosen Tesco as its food retail top pick for 2011, with an “overweight” rating and a target price of 577p. The broker sees a sharply improving returns profile as the firm diversifies. It also notes that debt is falling. It expects like-for-like sales excluding fuel to be up 2.5 per cent when it reports on 13 January.