BEST OF THE BROKERS

NORTHUMBRIAN WATER
JP Morgan Cazenove has upgraded the utility to “overweight” with a target price of 340p. The broker points out that the shares are the worst performing of the European utilities, but can find no fundamental reason for the underperformance. It adds that Northumbrian’s dividend cover remains strong at two times with a high earnings per share forecast compared to its peers.

ARM HOLDINGS
Nomura rates the technology group “neutral” with a target price of 500p. The broker has raised its top-line estimates by five per cent for 2011, though it also expects operating expenses to rise seven per cent thanks to increased competition with Intel. Nomura sees ARM’s strengthening royalty rates as a chance for the firm to post attractive long-term revenue growth.

C&W COMMUNICATIONS
RBS rates the telecoms group “hold” with a target price of 55p. The broker expects to see strong trading and continued demand in C&W’s Macau and Monaco markets, though the Caribbean mobile and fixed-line sales are set to dip slightly in the firm’s trading update next Wednesday, according to RBS. RBS also hopes to see signs of improvement in Panama in the update following a fresh set of government contracts.