BEST OF THE BROKERS

WPP
UBS rates the advertising giant as “neutral” with a target price of 620p, after this week’s digital investor day gave a positive outlook on the company’s longer-term strategy. The broker says the revenue opportunities for providing a wider variety of higher value services are very clear, but could come at a cost through staff inflation, capital expenditure or acquisition spend. UBS sees full year 2011 earnings of 64.44p per share, rising to 69.81p in 2012.

PENNON
JP Morgan rates the waste services company as “overweight” with a target price of 685p, after an analyst day focusing on its waste division, Viridor. Presentations by the division’s chief executive and finance director highlighted the long-term attractiveness of Viridor’s Energy from Waste (EfW) project pipeline, which could lead to a doubling of Ebitda by 2015. The broker is slightly more conservative, estimating 67 per cent growth instead.

DANONE
Citi rates the French food producer as a “buy” with a target price of €48, after third quarter figures that were broadly in line with estimates, but showed another weak performance in the dairy division. Organic growth of 5.9 per cent was marginally ahead of consensus on a strong performance by its water products, but 3.5 per cent growth in dairy was below expectation of 3.9 per cent.