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BABCOCK INTERNATIONAL
Numis upgrades the engineering company from “add” to “buy” with a target price of 870p after a management statement that was largely in line with expectations. The broker expects organic growth of around five per cent for the current year, which it sees as a strong performance when compared to the rest of the UK. Numis expects a period of good growth as the company’s bid pipeline looks likely to bear fruit in the medium term.
CARPETRIGHT
Deutsche Bank has downgraded the retailer from “hold” to “sell” with an unchanged target price of 420p following the company’s third-quarter results on Tuesday. The broker says the statement showed a “useful improvement” versus the first half, but a lower-than-hoped recovery in gross margins means profits are likely to come in below the projected £8m-£12m range. Deutsche lowers its profit forecast for the year to April 2012 from £8.8m to £7m.
TRAVIS PERKINS
Goldman Sachs has upgraded the builders merchant from “sell” to “neutral” with a target price of 863p, and says that any investment negatives are already priced into the stock. Since the broker added Travis Perkins to its sell list last August, its shares are up 16 per cent, and Goldman no longer sees a downside risk to consensus forecasts or the current pricing. Earning per share growth estimates for 2012 now stand at -2.4 per cent.