Morgan Stanley rates the consumer goods group “equal-weight”, down from “overweight”, and has a target share price of €28 (£23.43). The broker notes that Unilever shares are at all-time highs and that investors should aim to take profits. Morgan Stanley also sees very limited scope for any earnings upgrades in 2012, leaving the shares with almost no positive catalysts.
JP Morgan Cazenove thinks the retailer is “underweight”, and has slashed its target price from 5p down to 2p. Following Game’s third profit warning of the year, the broker now expects to see earnings 80 per cent lower than its previous estimates ,and a pre-tax loss of £32m in 2012. Even JP Morgan’s lowest forecasts assume large cost cuts within the business, including the withdrawal of the final dividend.
RBS rates the retailer “buy” with a target price of £17. The broker expects to see a 13 per cent jump in like for like sales when Burberry updates on its third quarter trading next Tuesday, and thinks positive economic data from Asia and Russia put the group on a firm footing for further growth. However, the lateness of Chinese New Year could dent Burberry’s fourth quarter figures when compared to last year.