Best of the Brokers

Panmure Gordon has downgraded the medical technology firm from “buy” to “hold” rating reflecting a recent rise in the share price, and raises its target to 720p. “We cannot imagine the outlook statement as strong as consensus implies,” the broker says ahead of the firm’s annual results on Thursday. However, Panmure maintains a positive stance on Smith & Nephew over the longer term.

Investec has downgraded Britain’s biggest food manufacturer from “buy” to “hold” and lowered its target price from 125p to 95p, after the recent departure of chief executive Mike Clarke. The broker added that if the firm is to remain public, it depends on an “established team with a consistent record” that can steer the firm through an equity raising.

Morgan Stanley has an “overweight” rating on the engine maker and has raised its target price from 1,000p to 1,200p. Rolls-Royce trades at a discount when compared to the global industrials sector, the broker reckons, and the shares offer protection in a weaker after-market. The firm will need to improve cash generation to bridge the value gap, Morgan Stanley adds.