Best of the Brokers

Peel Hunt’s Nick Batram has reiterated his “Buy” recommendation on leisure firm Rank Group and upped his target price to 206p. He says the firm has “evolved from a disparate leisure conglomerate” to be “a focused, fully regulated, gaming group with a high quality management”. Batram believes there is a 50 per cent gap between the current share price and the fair value: “This is an anomaly, and we expect it to be corrected.”

Liberum Capital’s mining team, led by Richard Knights, has issued a comprehensive report on UK miners which includes a downgrade for Rio Tinto to “Hold”. It says the firm has “low cumulative cash flow generation” when compared to its peers, largely a result of continued heavy investment in iron ore production. With iron ore prices currently weak, it believes the stock is not currently an attractive investment opportunity.

Andy Brown at Panmure Gordon has downgraded Wolseley, the world’s largest supplier of plumbing and heating products, from “Buy” to “Hold”, with a target price of 2,500p. Following a strong run for the stock he believes shareholders should take the opportunity to lock in some profits. But he remains impressed with the management team and says there is a “sound long term investment case” to be made.