BEST OF THE BROKERS
PREMIER FARNELL
UBS raises the electronic components distributor to “neutral” after weak first quarter results now leave less room for valuation downside. US slowdown and company-specific problems in Asia Pacific, where organic sales growth slowed from 11 per cent in the fourth quarter to fivr per cent, lead the broker to think growth will struggle to remain positive in the second quarter. The broker’s target price falls from 275p to 260p.
MARKS & SPENCER
Nomura rates the retailer “neutral” with a target price of 460p. The broker thinks the new remuneration plan for M&S directors should help bolster its growth rate as well as sustaining focus on the firm’s Plan A environmental plans. However, Nomura notes that the company’s earnings margins have been volatile over the past decade, with little long-term improvement in profitability thanks to its mature UK markets falling away.
CARILLION
Investec sees the support services company’s rating held back by its exposure to the construction sector. However, the broker equally believes too much emphasis is being placed on the UK construction business rather than the main profit drivers of support services, the Middle East and Canada. It has initiated coverage with a “buy” recommendation and a 450p price target.