Goldman Sachs rates the food and support services group as a “buy” and increases its target price from 695p to 705p, as well as updating its estimates. The broker expects earnings per share of 43.74p in 2012, rising to 48.99p in 2013, but sees several downside risks to both its view and price target. These include negative foreign currency translation effects, a material increase in price competition, and significant food cost inflation.
Citi rates the home improvement retailer as a “buy” and raises its target price from £2.80 to £3, following strong third quarter results last week. The broker says the forecast-beating results add credibility to the company’s +10 per cent-plus earnings per share growth target to January 2014, driven by a combination of like-for-like sales progress, cost controls and a +50-70bp group gross margin delta per year.
JP Morgan rates the power group as “underweight” and raises its target price from 1,060p to 1,205p, saying the company’s defensive appeal is undermined by its volatile earnings stream and rising debt. The broker says SSE’s Generation and Supply business – a key driver of growth from 2003-2009 – is facing a challenging future at the same time that its gearing is at a record high, and that it will likely remain cash negative until at least 2015.