BEST of the BROKERS

GKN
Credit Suisse has upgraded the carmaker from “neutral” to “outperform” and has left its target price unchanged at 240p. The broker points out that GKN’s shares have underperformed the sector by four per cent in the last month, thanks to concerns over its possible purchase of Volvo Aero, providing a buying opportunity. Credit Suisse reckons GKN is in pole position to buy Aero, now that MTU has pulled out of the race.

AFRICAN BARRICK GOLD
Goldman Sachs has downgraded the miner from “neutral” to “sell” and has cut its target price from 570p to 380p. The broker sees ABG as a “structural laggard” compared to fellow gold companies, with lower growth and higher costs. Goldman has also recently lowered its forecasts for gold prices this year as the US economy continues to recover.

TESCO
Nomura rates the supermarket “buy” with a target price of 430p. The broker expects to see pre-tax profit up 2.7 per cent at £3.9bn when Tesco reports its full year results next Wednesday, with a UK margin of 5.7 per cent. Nomura also flags up Tesco’s real estate strategy as an issue to watch, with a shift towards smaller stores expected as it moves away from opening new hypermarket-sized outlets.