BEST of the BROKERS
BREWIN DOLPHIN
Numis rates the investment manager “sell” with a target price of 110p ahead of its interim results tomorrow. The broker expects a drop in adjusted earnings per share, from 6.7p a year ago to 4.5p – much lower than consensus estimates of 6.7p. Numis warns that consensus forecasts seem to be overlooking a “significant” slowdown in client activity.
HOMESERVE
Seymour Pierce has upgraded the home repair firm from “reduce” to “hold” with a target price of 150p. The broker believes most of the bad news linked to an ongoing FSA probe has now been priced in, though the shares are likely to tread water for now as the “sword of Damocles” of a potential fine hangs over the firm’s head.
SERCO
Jefferies has started covering the out-sourcer with a “buy” rating and a price target of 655p. The broker has raised its targets for most firms in UK outsourcing after meetings with the government and suppliers, and now expects a very strong bid pipeline until at least 2014. Jefferies is now five to eight per cent ahead of consensus earnings forecasts.