BEST OF THE BROKERS

ORASCOM
After the company announced a demerger of its fertiliser and construction businesses, Morgan Stanley rates the Egyptian construction group as “overweight” with a target price of $49. The demerger will see OCI hold the fertiliser business, while the demerged company will hold the construction segment. Each shareholder will receive one share in the demerged company, with the deal expected to complete in the first quarter of this year.

ARM HOLDINGS
UBS introduces a short-term “buy” on the Cambridge-based chipmaker but remains “neutral” in the long-term, to reflect imminent catalysts including Intel accelerating its roadmap and expected announcements of new products from Samsung and Broadcom. The broker’s latest estimates suggest fourth quarter revenues up to six per cent ahead of consensus, and up to 14 per cent ahead on earnings before interest and tax.

BAE SYSTEMS
JP Morgan rates the UK defence company as “neutral” and reduces its target price from 302p to 297p after a number of announcements last December and this year that may have a negative impact on 2011 underlying earnings and cash. The broker says the lack of a Saudi signature announced earlier this week is likely to mean £300m more in debt, and a miss on earnings before interest, taxes and amortisation of around £80m.