BEST OF THE BROKERS

PETRA DIAMONDS
Goldman Sachs initiates coverage of the Africa-focused miner with a “buy” rating and a target price of 200p, seeing its recent underperformance as a compelling entry point. The broker sees Petra as having a strong growth profile, and says the diamond market is set to enter a period of prolonged tightness. Goldman forecasts Petra to generate strong operating cash flow over the coming years, which should enable it to fund growth from internal means.

HEINEKEN
JP Morgan updates on the brewing group after its acquisition of Galaxy Pubs from RBS for £422m, rating the company as “neutral”. Though the broker expects the immpact on consensus earnings forecasts from the transaction to be minimal, it will tie up around €500m of capital in assets which are not showing profit growth in an industry which is under long-term structural pressures.

BRITVIC
Citi rates the drinks group as a “buy” and reduces its target price from 390p to 380p to reflect a lower earnings forecast. Despite recent full-year results hitting consensus, the broker reduces its earning-per-share forecasts by 3-4 per cent, as the outlook remains uncertain. Among the results Citi sees as positive the announcement of a new Fruit Shoots agreement in the US, as well as the increased dividend and clarification on the pension deficit.