BEST OF THE BROKERS

DIAGEO
Societe Generale rates the drinks group “buy” with a 12-month target price of £14.10. The broker sees Diageo’s reported bid for Polish spirits firm Stock as in line with the firm’s emerging markets expansion plan, saying the firm is well-placed to make medium-sized purchases while rivals focus on deleveraging. Soc Gen also sees the company as a front-runner to snap up Fortune Brands when it splits off some operations later this year.

E.ON
Goldman Sachs reiterates its “neutral” rating on the energy group with a target price of €23.08. The broker estimates that German nuclear power makes up 28 per cent of the firm’s 2011 clean net income, meaning a €4 per share hit if the government decides to accelerate nuclear closures without any compensation. However, Goldman has not altered its earnings forecasts since it thinks higher power prices will likely offset any losses.

DIGNITY
Panmure rates the funeral services firm “buy” with a target price of 872p following the company’s full-year results last week. The firm reported adjusted pre-tax profit six per cent above Panmure’s forecasts, with 15 per cent earnings growth year-on-year. The broker has raised its earnings per share forecasts by six per cent and four per cent for 2011 and 2012 respectively as margins continue to improve.