BEST OF THE BROKERS

WM MORRISON
Deutsche Banks rate the supermarket group as “hold” with a target price of 310p, up from 272p. Following results last week, the broker says Morrisons is in a good place relative to other UK food retailers, but lacks growth potential compared to other stocks in the sector. If the supermarket does not achieve its forecast cost savings, margins could decrease and investment would stall.

TELENOR
Nomura rates the Norwegian telecoms group as a “buy” with a target price of NOK 114 (£12.95), and adjusts its estimated earnings based on results from the New Vimpelcom division. The broker forecasts New Vimpelcom will now contribute 30 per cent of group earnings, compared to 40 per cent previously. Nomura forecasts 13 per cent growth in cashflow in 2012, with a reduction in Indian losses seen as the key group driver.

HOME RETAIL GROUP
Citi maintains its “sell” rating on the Argos and Homebase owner, with a target price of £1. The broker says that with disposable household cash set to continue weakening in 2012, Home Retail will face a sustained period of profit and loss pressure. The target price is based on a circa 4.5 times EV/Ebit multiple for February 2013, in line with high-discretionary peers. Downside risk could be driven by a further rebasing of the dividend.