Best of the Brokers

DEBENHAMS
Andrew Wade at Numis has downgraded Debenhams to “reduce” from “hold” with a target price of 95p, citing concerns over British sales. Although the retailer’s stock had “an exceptional run” during 2012 Wade says the UK business has been going backwards. “[We] believe that transfer into lower margin categories (online, concessions, beauty) may see profit continue to come under pressure,” he explained.

EXPERIAN
Graham Brown at Canaccord Genuity has reiterated his “sell” verdict on credit ratings agency Experian, with a target price of 890p. Yesterday the firm reported organic revenue growth of seven per cent for the fourth quarter. But Brown forecasts “a continued slowdown of Experian’s organic growth, driven by a material deterioration of the Brazilian economy, the key engine of growth in 2012”.

PEARSON
Liberum Capital’s Ian Whittaker has reiterated his “sell” rating on publisher Pearson ahead of next Monday’s trading update, with a fair value of 1,050p. He is concerned that trading is difficult in the crucial North American education market, which produces 50 per cent of group profits. “The stock is expensive and vulnerable to a significant de-rating if structural problems become more evident, as anticipated,” he adds.