Best of the brokers

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HOME RETAIL GROUP
Cantor Fitzgerald has a “hold” rating on the retailer and a target price of 115p ahead of fourth quarter figures due on Thursday. Analyst Freddie George expects to see like-for-like sales growth of 2.5 per cent at Argos, ahead of the consensus view of 2.1 per cent, and a 2.5 per cent drop at Homebase. While George is downbeat about the firm’s recovery prospects, he likes the chances of a private equity takeover bid.

ADMIRAL
Berenberg rates the insurer “sell” with a price target of 1,060p. The bank’s analysts believe 2012 represented the peak of Admiral’s earnings potential, with its core UK motor business now unlikely to grow after a mere two per cent expansion last year. However, the firm’s price comparison business Confused.com is earning more than Berenberg expected.

SAGE
Bank of America Merrill Lynch has cut its rating on the accountancy software firm to “underperform” from “neutral” with a target price 10p higher at 330p, saying its valuation had peaked. The bank thinks Sage’s efforts to launch cloud products in new markets will be slow to deliver growth, and recommends that investors remain sceptical over the next few quarters.