BEST OF THE BROKERS

INCHCAPE
JP Morgan rates the car distributor and retailer as “overweight” with a target price of 440p, and says the company’s shares have fallen too far from their high of 425p in July 2011. The broker sees the discount of 18 per cent to the wider retail sector in 2012 as unjustified, given Inchcape’s wide geographic exposure and attractive distribution model, and says that despite negative sentiment on consumer spending the investment case is unchanged.

HAYS
Citi rates the recruiter as “neutral” and lowers its target price from 70p to 65p on the back of earnings downgrades following the company’s second quarter results earlier this week. The broker lowers its forecast for earnings before interest, tax, deductions and amorisation (ebitda) for 2012 from £131m to £118m to reflect weaker than expected net fee growth in the UK and Australia, and lowers 2013 ebitda to £125m.

BURBERRY
Nomura upgrades the British luxury goods group to “buy” from “neutral” and raises its target price from 1,356p to 1,530p, saying the group’s high returns and capital expenditure justify the stock’s premium. The broker believes Burberry can continue to deliver good comparable store growth and drive some improvement in earnings margins, and sees further scope for price points to be stretched and new categories developed.