Investec maintains its “buy” rating on the microchip maker because of good long-term prospects. The target price is static at 800p, due to the last quarter’s “uneventful” results and no catalysts on the horizon. Costs were slightly higher than expected, and foreign exchange movements have prompted a modest forecast cut for the full year. The brokers say that last year’s Thai floods are still hindering royalty income growth, but royalties will pick up and form the next catalyst, it believes.
Numis advises to “hold” shares in the pub chain, with a target price of 400p ahead of a quarterly update expected to show few reasons for optimism. Sales will continue to be buffeted by the reduction in high street footfall and the need to pass new taxes and duties on to customers. However the company is still on track to open 40 pubs this year, Numis notes. The broker has already cut its long-term profit forecasts to reflect the extra cost of levies and reckons tax pressure will continue to dampen down the firm’s growth.
UBS has upped the electrical retailer to “buy” from “neutral” but lowered the target price to 70p from 75p. The final quarter of the 2012 financial year was “tough” and the broker has lowered its earnings forecasts by eight per cent for the full year. But growth in its strong French operations is seen as the key reason to buy, and the possible disposal of its loss-making Italian business could strengthen the investment case further. UBS also sees an opportunity in the renewed Eurozone financial crisis, which could provide a catalyst for Kesa to restructure its businesses.