BEST OF THE BROKERS

DEUTSCHE TELEKOM
Goldman Sachs rates the telecoms group “neutral”, up from “sell”, with a target price of €10.90 (£9.47). The broker thinks the possible sale of T-Mobile USA will be positive for the firm even if it doesn’t go ahead, given the $3bn cash and spectrum assets promised in the break clause. The sale would solve one of DT’s biggest strategic challenges, the broker adds, but only has a 50 per cent chance of successfully closing.

PUNCH TAVERNS
Deutsche Bank (DB) rates the pub chain “sell” with a target price of 55p. The broker thinks Punch’s strategic review yesterday chose the most sensible option, though the long process of splitting the company means a straightforward equity value for the business is still unclear. However, DB believes that there is some upside for investors who are prepared to be patient over the longer term.

GRAINGER
Collins Stewart rates the residential property group “buy” with a target price of 180p. The broker approves of Grainger’s increasing exposure to London following a recent acquisition, now at around 74 per cent of its residential portfolio, and thinks new debt facilities should help shore up confidence in the firm. Based on net asset values, the broker thinks the firm is trading at a discount of 59 per cent.