BEST OF THE BROKERS

BT GROUP
UBS rates the telecoms group as “neutral” but raises its target price from 210p to 230p after BT announced on Friday that it will halve its pension deficit by end of March 2012 and said the current deficit stood at £4.1bn – below the expected £6bn. UBS now expects the company’s dividend to rise faster and earlier than had been assumed, and raises its full year 2012 dividend to 10p, rising to 12p for 2013.

CATLIN
Nomura has upgraded the Lloyd’s insurer from “neutral” to “buy” with a target price of 506p as part of a review of the European insurance market. The broker says Catlin’s stock has lagged behind the sector – up just one per cent compared to a seven per cent lift across insurers. Nomura was encouraged by Catlin’s rate increase of five per cent at the start of the year, and prefers it to rivals on valuation and potentially higher bond yields.

GALLIFORD TRY
Peel Hunt has raised its target price on the housebuilder from 650p to 825p with a “buy” rating, saying the group is delivering better profits, higher yield and capital discipline that should have a positive effect on its valuation. The broker says Galliford is very likely to deliver on its September 2009 promise of £60m in profits before tax by 2012, which many scoffed at the time, but which is now largely “in the bag”.