ABERDEEN ASSET MANAGEMENT
Singer Capital rates the fund manager a “buy” with a 275p target price ahead of its third-quarter results, which are expected to show a one per cent rise in assets under management and a strong upward trend in revenue margins as its asset mix shifts towards higher margin equity pooled funds. Singer believes current forecasts may not reflect this positive impact, while Aberdeen’s earnings momentum remains positive despite tough markets.
Deutsche Bank rates TUI a “buy” with a 280p target price as it is sticking to its full-year earnings forecasts despite the tough trading conditions it has experienced. Deutsche believes investors are nervous of consensus earnings downgrades, which is causing share price falls and creating a buying opportunity. Deutsche thinks management will use third-quarter results to state that they remain comfortable with full year forecasts, so it recommends buying.
HOME RETAIL GROUP
Arden Partners rates the Argos owner a “sell” with a 120p target price on the emerging consensus view that it would cut its dividend and its share price would fall to 130p. Its historic dividend yield is 10.7 per cent at this level but probably only 5.4 per cent with earnings cover gone, which, considering it is the UK’s biggest general merchandise retailer, looks low. Before its second-quarter results in September, Arden believes the shares have further to fall.