BEST OF THE BROKERS

PREMIER FOODS
Citi retains its “buy” rating on the UK food producer, but raises its risk profile to speculative from high and cuts it target price to 29p from 40p, to reflect an increased covenant risk and recent hit to its profits. The broker says that revenues have been affected by commodity pressure, a contract loss and the delisting of a major customer, as well as tough market conditions. It cuts its half-year profit forecast to £68m, but sees many issues as unlikely to recur.

AVEVA
Goldman Sachs reiterates its conviction “buy” rating on the engineering software group, with a 12-month target price of 2,700p. The broker continues to see the company as a structural winner in the European market due to its strong industry positioning, exposure to infrastructure growth and increasing share in offshore oil and gas development. The broker sees the stock as undervalued compared to its peers, despite better forecasts across the board.

DEBENHAMS
After better than expected like-for-like sales in the third quarter, UBS rates the retailer as “neutral” with a target price of 70p. The broker thinks Debenhams should report its underlying profits on a 52-week basis to aid comparability, but based on the 53rd week benefit increases its full-year sales outlook by 1.5 per cent, and lowers its gross margin to flat from +20 basis points.