BEST OF THE BROKERS

FIAT
Morgan Stanley rates the automotive firm “overweight” with a target share price of €9, saying that the balance sheet is poorly understood and that net debt can continue to surprise. However, it sees better near-term returns in VW and Daimler. The broker has lowered its net debt estimate eight per cent to €4.7bn, and notes that the consolidation with Chrysler seems to be moving ahead faster than expected.

HALFORDS
Citigroup retains its “buy” rating for the retail group but has reduced its target price from 470p to 420p and has trimmed its forecasts, following sector de-rating. It says further investment in the first quarter continues to weigh on consensus forecasts. However, the broker says that with operating margins back toward the long-run average, the fundamental investment case remains intact - particularly following the recent buy-back announcement.

EDF
Nomura rates the utilities company a “buy” with a target price of €47.50 and expects it to report first-half earnings growth of 5.9 per cent on Friday – consistent with EDF’s full-year guidance of four to six per cent growth. Nomura believes EDF has fallen off the radar while investors concentrate on the likes of E.ON and RWE, but says it has outperformed the utilities sector by 4.7 per cent over the past month and that strategy news could provide a catalyst.