Best of the Brokers
KINGFISHER
Morgan Stanley rates the retailer “overweight” with a price target of 325p. Analysts have set out 10 questions for management to answer following lacklustre interim results, including why B&Q’s profitability has fallen and whether Screwfix could expand into new markets. Morgan Stanley also flags up the prospect of a long-term buyback strategy given Kingfisher’s strong balance sheet.
DS SMITH
UBS has upgraded the packaging firm from “neutral” to “buy” with the target price rising from 146p to 240p. The broker sees a handsome £100m in synergies from the firm’s recent purchase of SCA Packaging, higher than the company’s guidance of £60m, along with the release of £200m in capital. UBS raises its earnings forecasts by eight to 30 per cent for the next three years.
WHITBREAD
Nomura rates the hotels-to-coffee company “buy” and has hiked its price target from £22.20 to £26.50. The broker sees a change in management focus towards improving return on capital employed. It thinks Whitbread could consider an exit from pubs, a faster expansion at Costa and an increased use of leasehold sites to achieve this. Nomura raises its medium-term earnings per share forecasts by three per cent.