Numis cheers the insurer as one of its key picks for 2013, and has a “buy” rating and an increased target price of 265p. The broker sees Direct Line’s price to earnings ratio as modest at 9.4 times, in spite of a 22 per cent share price rise since October’s float. Numis also points to ongoing cost-cutting measures and motor claims changes that will significantly increase profits.
Peel Hunt has a “hold” rating and a target price of 350p ahead of the support services and construction group’s pre-close update on Wednesday. The broker believes Interserve has weathered a tough trading backdrop well, and expects to see a stronger balance sheet with £29m of net cash. The firm’s pensions liabilities have also been reduced, helping set the scene for future bolt-on acquisitions.
Panmure Gordon rates the construction materials supplier “buy” with a target of 165p. The broker expects to see signs of tight cost control when the firm releases a full-year trading update on Thursday, along with good margin management and smaller growth initiatives. Panmure is also upbeat about SIG’s chief executive Stuart Mitchell, who starts in March.