BEST of the BROKERS

TESCO
Shore Capital has a “hold” rating on the supermarket giant and a target price of 319p. The broker thinks Tesco is making steady progress improving its performance in the UK, but has downgraded full-year earnings forecasts by nine per cent for the firm’s Europe division, 12 per cent for the US and 9.5 per cent for Tesco Bank. Overall, Shore has lowered its 2012 profit forecast by 5.6 per cent to £3.55bn.

BHP BILLITON
Credit Suisse has downgraded the miner from “outperform” to “neutral” and has cut its target price to £21. The broker has lowered its outlook for a swathe of commodities firms including ENRC and Rio Tinto, but warns that BHP Billiton will be particularly badly battered by falling oil, coal and aluminium. It adds that BHP’s soaring capital expenditure means investors are unlikely to see a dividend rise this year.

YULE CATTO
N+1 Brewin has upgraded the chemicals group from “reduce” to “hold” with an unchanged 12-month target price of 130p, having lowered its target from 160p last week in the wake of a profit warning. Despite the grim earnings predictions, the broker thinks Yule’s current share price already factors in this bad news and more, with room in the price for a further 15 per cent slip in its earnings.