BEST OF THE BROKERS
COMMERZBANK
Deutsche Bank reinitiates coverage of Germany’s second largest bank with a “buy” rating and a target price of €4.60, reflecting the group’s strong position in core German banking products. The broker sees the main profit driver in the next 18 months as the normalisation of loan losses and execution on cost saving potential, after the bank completed its recapitalisation programme earlier this month.
HOMESERVE
UBS rates the emergency insurance cover and domestic repair providers as a “buy”, and increases its target price from 560p to 580p. The upgrade is based on a recent visit to the group’s US operations in Miami and Connecticut, which the broker sees as having potential for UK-levels of penetration, cross-selling and retention. The broker adds three to five per cent to its earnings per share estimates for 2014-16 based on the US opportunity.
AXA
JP Morgan Cazenove rates the French financial protection group as “underweight” with a target price of €16, and increases its earnings per share estimate for 2011 by three per cent following a recent investor day. The broker sees sense in Axa’s focus on turning round its property and casualty business, but thinks it will take some time before Axa can bring underwriting profits to a more attractive level.