BEST OF THE BROKERS

GLAXOSMITHKLINE
Morgan Stanley upgrades the pharmaceutical group to “equal weight” with a target price of 1,500p, and says the risks it outlined to support the previous underweight rating have either played out or been reduced. The broker says the stock now offers a compound annual growth rate of nine per cent on earnings per share over the next five years, and that GSK offers sustainable revenues having navigated its patent cliff.

CARPHONE WAREHOUSE
Citi rates the mobile phone retailer as a “buy” and increases its target price from 400p to 450p following Carphone’s disposal of its Best Buy Mobile US and Canada joint venture to Best Buy. The price of £838m was £170m below the broker’s SoTP valuation, but the profit share in the venture in other markets could mark significant value creation. Citi cuts its pre-tax profit forecasts 26 per cent to £62.7m.

L’OREAL
Nomura rates the cosmetics group as “reduce” with a target price of €80 (£68.60), despite slightly better-than-expected like-for-like sales growth. However, the company also revised down its fourth quarter outlook to be “more or less” at the same growth level as the third quarter rather than better, as previously guided. As a result the broker’s consensus estimates come down by 1.5 percentage points.