BEST OF THE BROKERS

INTERTEK
Goldman Sachs rates Intertek a “buy” with a £29.44 target price after its latest interim statement suggested it can sustain strong organic revenue growth despite the uncertain macro environment, and see more gains in its underlying margin. Growth in the next year may be enhanced by further bolt-on acquisitions, and it trades at a 20 per cent discount to its peers, making it an attractive investment opportunity.

REED ELSEVIER
Nomura rates the publishing group “buy” with a 668p target price as its core high-margin insurance business is still growing at about seven per cent despite the turmoil in world economies. Its costs will grow below revenue growth so earnings are expected to stay steady this year, while the disposal of its enterprise software business in its risk division is expected to increase its operating margin.

TALKTALK
Citi rates TalkTalk neutral without a target price at present after its recent results, which the broker saw as disappointing. Revenue growth has suffered in the past year despite management efforts to raise margins by cost cutting, and net broadband additions have deteriorated every quarter since the end of 2010. Citi believes TalkTalk may not be cheap enough given the lack of upcoming positive catalysts.