BEST OF THE BROKERS

NATIONAL EXPRESS
Nomura rates the transport group as a “buy” with a target price of 320p, and calculates that its year-on-year growth in both its US schoolbus and Spanish operations have improved sequentially in the second quarter. The broker sees momentum at the company as positive at the moment, with a successful bidding season underpinning forecasts for 2012. Nomura forecasts earnings per share of 28p for 2011, around eight per cent ahead of consensus.

L’OREAL
UBS reiterates its “buy” rating on the cosmetics and beauty giant with a target price of €100 following a trip to its Indian operations in Mumbai. The broker says that although India is still a small market for L’Oreal, with sales of €171m in 2010, China was in a similar position 10 years ago, and management predicts €1bn of revenue from Indian sales in the next ten years. UBS sees substantial medium term upside in the shares.

IMPERIAL TOBACCO
Citi changes its rating of the tobacco group from “hold/low risk” to “hold/medium risk” with a target price of 2260p. The broker says that Imperial’s price raises in Spain mean it is more optimistic about tobacco pricing in general, and increases its full year estimates for 2011 by 1.8 per cent and for 2012 and beyond by about five per cent. Though Citi expects the rest of the industry to follow on pricing, it may wait for tax changes instead.