BEST of the BROKERS

ABERDEEN ASSET MANAGEMENT
JP Morgan says that the asset manager remains its top pick in the sector, but notes that its strong performance in the year to date has been driven by estimate upgrades rather than a re-rating. The share price is now 18 per cent higher than at the start of the year – broadly matching the increase in earnings estimates seen over the same period. The broker rates Aberdeen as “overweight” with a target price of 306p - slightly raised from its previous target of 300p.

SMITH & NEPHEW
Deutsche Bank rates the medical devices company as a “hold” with a target price of 625p ahead of first-quarter results due on 3 May. Though the broker forecasts sales growth to weaken sequentially across all three of its product lines and Ebitda margins to contract, it also says the company’s ortho sales will attract the most investor attention. Deutsche says the shares are fairly valued, but expects the extent to which S&N can defend its share of the hip and knee markets may weigh in the near future.

NATIONAL GRID
Investec rates the UK power provider as a “sell” with a target price of 549p ahead of final results in May, but sees greater importance in the outcome of its UK price controls, with initial proposals due at the end of July. The broker says National Grid’s share price reflects a relatively benign outcome but that it remains wary, seeing the potential for a further capital raise by about 2015. Investec has factored in a 10 per cent dividend cut in FY13/14.