It rates both ‘buy’, raising the valuation of the former to 470p a share from 400p.
“A potential risk is that rail becomes a political football in the election build-up but we remain of the view that in reality there is unlikely to be any material change operationally even if we see a change of government,” it said in a note to clients.
It was a day of top picks for Deutsche, which named Marks & Spencer (LON:MKS) the one to watch in the retail space. Rating the stock ‘buy’ it said profit margin gains should offset the loss in market share.
In a preview to next week’s banks stress tests, America’s Citi reckons Lloyds (LON:LLOY) is ‘most at risk due to its large exposure to UK mortgages’. It rates the stock ‘neutral’.
It is, however, a ‘buyer’ of the gaming software group Playtech (LON:PTEC) after initiating coverage earlier and reckons the shares are worth 840p.
“High and sustainable margins, a substantial cash flow, an earnings accelerator from likely acquisition(s) and strong growth macro underpin an attractive equity story,” Citi said in a note to clients.
Finally, JP Morgan Cazenove ‘materially lowered’ its price forecast for iron ore to US$67 per tonne, which had a knock impact on its forecasts for the large, supposedly diversified miners.
The only one of the big boys to come out of the process looking a halfway decent investment was Rio Tinto (LON:RIO), which JPMC says is the only one of its peer group with capacity to sustain its capital returns.
It remains ‘underweight’ on Anglo American. It forecasts all three will have to fund their dividend payments from debt.