BEST OF THE BROKERS
BRITISH LAND
UBS has upgraded the real estate investment trust from “neutral” to “buy” with a 12-month target price of 610p. The broker thinks the group’s strategy has become more appealing in the current low growth, risk averse environment, coupled with a strong dividend yield. While the firm slightly missed estimates with its first quarter results, UBS has lifted its earnings per share forecast on the back of recent acquisitions.
CATLIN
Morgan Stanley rates the insurance group “overweight” but has cut its target price from 504p to 490p in light of its recent catastrophe loss estimates. The broker still thinks the firm’s risk-reward looks attractive compared to rival insurers, and is also keen on Catlin’s dividend yield of 7.7 per cent in 2012 on present forecasts. Morgan Stanley also notes the firm’s strong reinsurance programme to protect its capital base.
COBHAM
Goldman Sachs has upgraded the defence group from “neutral” to “buy” with a raised target price of 225p, giving a potential upside of 27 per cent. While the broker has a negative outlook on the UK defence sector, it thinks Cobham’s strong balance sheet and robust dividend cover provide a compelling investment case, and expects the firm to bolster its value through bolt-on acquisitions using its free cash flow or be taken over itself.