Best of the brokers

Morgan Stanley rates the pharma group “equal-weight” and has raised its target price from 3,020p to 3,310p ahead of an investor day today. The broker forecasts revenues to fade after 2020 in the absence of any large M&A deals, though for now the risk-reward balance in the firm is improving. Morgan Stanley wants to see traction on short-term growth before it would change its stock outlook.

Numis has cut its recommendation from “hold” to “reduce” and kept its target price at 1,136p. While the broker cheers the stock exchange’s long-term strategy, it thinks the share price rally has run its course beyond a fair value. When the expected contract losses within recent purchase LCH.Clearnet are included, Numis expects 2.8 per cent earnings growth in the three years to March 2015.

Espirito Santo has a “neutral” rating on the retailer with a fair value of 30p. Following an upbeat dinner with Dixons management, the broker thinks boss Seb James can drive the firm towards more online sales growth, with just months until the company can compete with Amazon on one-click and next-day deliveries. Dixons is also doing well out of the tablet boom, selling around 1m over Christmas.