BEST OF THE BROKERS

INTERNATIONAL AIRLINES GROUP
Nomura rates the airline group as a “buy” with a target price of 265p, but says the group’s strong third quarter results in 2010 will be difficult to replicate this year. The broker expects yields to rise 1.5 per cent, and the fuel bill to rise by just over €300m year-on-year, in line with guidance. Nomura forecasts earnings before interest and tax of €350m, a fall of €173m from last year due to higher fuel prices.

NATIONAL GRID
Ahead of first half results on 17 November, Goldman Sachs rates the energy distributor as a “sell” with a target price of 561p. The broker expects headline profits and outlook to have been hit by increased costs from US storms, which it estimates could hit $200m. The build up of costs and risk of under-recovery from customers highlights the challenges it faces in growing its US business.

HENDERSON GROUP
Citi rates the fund manager as a “buy” and lowers its target price to 155p from 160p to take into account slightly lower estimates on earnings per share. The broker says European SICAVs are the main drag on retail flows, but says hedge fund flows were slightly positive during the third quarter in both the UK and the US, suggesting Henderson’s aim of acheiving positive net flows for the second half remains plausible.