Nomura said the recent run of group earnings downgrades looks to be coming to an end. It said like-for-like sales growth of between 2-3 per cent in ABF’s retail division and favourable EU sugar pricing would offset weakness in its ingredients division. It said it was optimistic about a recovery in 2012 earnings. It has a buy rating on the stock and a target price of 1180p.
UBS said it was sceptical about a much-discussed demerger of Comet from the rest of Kesa, given there are no obvious buyers of the British chain. However, it said the medium-term downside risk was limited: if nothing changes and trading weakens further, the potential for a private equity bid or restructuring increases. The broker increased its 12-month price target from 135p to 140p.