Best of the Brokers

Liberum Capital has reiterated its “Sell” rating on construction business Carillion ahead of next week’s interim results, with a target price of 322p. The analysts expect to a see reduced order book for future work in the face of a tough UK construction market, as well as a disappointing outlook in the Middle East. Overall Liberum judges the company’s stock to be “relatively expensive on estimates with downside risk”.

Jeffries has initiated coverage on Thomas Cook with a “Buy” rating and a 155p price target. It praises new chief executive Harriet Green for identifying £160m of cost savings, with more on the way and says it is looking forward to a “more focused Thomas Cook driving profitable growth from its 23m strong customer base”. It says 2012 should “mark the low point for profitability” at the business.

Merchant Securities has downgraded Newbury-based technology firm Micro Focus to “Sell” with a target price of 600p following a 47 per cent rise in its share price gains over the last year. “While free cash flow generation remains strong, suggesting ongoing cash returns in the future, these now appear largely priced in,” the note says, suggesting it will be hard to maintain recent cash returns.