F&C ASSET MANAGEMENT
Deutsche Bank has downgraded the asset manager from “hold” to “sell” with a target price of 76p. The broker sees two new risks from the firm’s results last week that are not reflected in the current share price: a decline in equity investment performance and a dispute with key client Millennium BCP. DB sees potential upside in F&C getting involved in the sector’s ongoing consolidation.
Canaccord Genuity rates the spread betting firm “hold” and has lowered its target price to 482p. The broker notes that volatility was stronger in February, helping to boost revenue, but that it is unlikely that client activity will remain this strong through the next quarter. The broker has trimmed its earnings forecasts for the year by two per cent to £163.9m on slower revenue growth.
HOME RETAIL GROUP
UBS rates the owner of Argos and Homebase “neutral” with a 12-month target price of 190p, down from 210p. The broker was surprised by cost growth at the group in its results last week, which has led to a £50m cut in UBS’s pre-tax profit forecasts to £195m. UBS assumes that the firm will retain its dividend, but sees a greater medium-term risk.