Goldman Sachs has bumped the utilities giant off its “conviction buy” list and downgraded the stock to neutral, citing a weaker near-term earnings per share outlook due to lower commodity prices and greater share price upside elsewhere in our coverage. Goldman has had Centrica on its buy list since 7 January 2010, in which time the gas and electricity company’s shares have added 15.6 per cent compared to the 11.9 per cent loss suffered by the FTSE World Europe index.
TATE & LYLE
Exane BNP Paribas has upgraded Tate & Lyle from “neutral” to “outperform”, due to a rare bout of stability in the key bulk ingredients business and a more reasonable valuation. Exane raised the sugar maker’s target price from 700p to 760p, saying it could up earnings by a fifth over the next three years including a return to high single digit growth after a flat full year 2013.
Liberum Capital yesterday initiated coverage of the UK telecoms sector, recommending an overweight position for Vodafone in the belief that the Verizon Wireless dividend news will be a catalyst. Despite a “disappointing” revenue decline in the last year, a pressure which Vodafone has yet been unable to offset, the company offers “compelling overall shareholder returns”. Liberum issued a “buy rating” and gave the stock a target price of 210p.