Goldman Sachs rates Essar a buy with a £5.75 target price after disappointing second-quarter results. Its earnings were hit by underperforming units – but Goldman thinks these will recover after an overhaul in September, and is focusing on its refinery upgrades, due for completion at the end of the year, which it believes will power its growth. It has lowered its earnings forecasts for the 2011 full year but has raised its 2012 forecasts by one per cent.

Numis rates ARM add with a £6.60 target price as it believes its royalty revenue from the processors in smartphones and tablet computers is improving and it is growing its market share in the tablet, netbook and computer markets despite a softer market for handsets. Numis believes ARM, which supplies Apple, Samsung and HTC, will grow tablet market share to 65 per cent by 2012 and upgrades its 2012 earnings per share forecast by five per cent.

JP Morgan Cazenove is neutral on Thomas Cook with a £1.78 target price after its profit warning on its full-year 2011 earnings. The broker believes tougher-than-expected UK market conditions represent about two thirds of the downgrade and sees a real need for major change in its UK operation. It believes Thomas Cook’s forecast profit downgrade is still overly optimistic and has cut its full-year 2011 earnings per share by 31 per cent to a forecast 14.3p.