BEST OF THE BROKERS
Deutsche Bank upped its target price for Capita Group from 635p to 678p, but retained a “hold” rating, saying the stock deserves a premium but there may be better times to buy. The broker said the outsourcing group is well placed to grow and will remain a premium stock in its sector. It also upgraded its 2009 and 2010 earnings estimates, by 2.1 per cent and 4.9 per cent respectively, but said there is little reason to chase the stock now.
Goldman Sachs removed Northgate from its “conviction buy” list following the announcement of a rights issue and the accompanying share price volatility. The broker believes that the fundamental outlook is improving, as rental rates improve, utilisation picks up and residual value pricing recovers from trough levels. It retains a “buy” rating on the stock, but it warns that there could be further rights issue volatility in the share price in the near-term.
LONDON STOCK EXCHANGE
Although near-term trading momentum is positive, Bank of America Merrill Lynch said that it remains concerned about structural challenges in the London Stock Exchange Group’s core cash equities division. The broker said that with the loss of market share of FTSE 100 shares traded accelerating, there are continued long-term risks to pricing and margins and has an “underperform” rating on the stock with a reduced price objective of 590p.