Ahead of first-half results on 27 July, Citi rates the tobacco group as a “hold”, and lifts its target price from 2800p to 2890p. The broker also lifts its forecasts three per cent above consensus having upped its estimates for Asia to take into account a boost in the Japanese market, following rival Philip Morris’s better-than-expected results. Citi predicts an operating profit of £2.7bn and earnings per share of 97p.
Nomura reiterates its “buy” rating on the German cash and carry group, but lowers its target price from €53 (£46.70) to €49. The broker expects second quarter sales to grow by a modest 0.9 per cent to €15bn, and like-for-like sales at Media Merkt/Saturn in Germany to drop around one per cent because of weak electrical sales and challenging comparatives from last year’s World Cup.
MITCHELLS & BUTLERS
UBS rates the pub group as “neutral” and reduces its price target from 325p to 310p as a result of changes to operating margin estimates. The broker had been forecasting an operating margin of around 16.8 per cent this year, but the group has indicated that opening costs, kitchen modifications, food inflation and increased promotions mean it is more likely to be around 16.5 per cent.