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Broker spotlight, including Barratt Devs, Boohoo, De La Rue, Dunelm, Halfords, Igas, Next, Premier Oil, Rightmove, Sage, Stratex

Broker spotlight, including Barratt Devs, Boohoo, De La Rue, Dunelm, Halfords, Igas, Next, Premier Oil, Rightmove, Sage, Stratex

The property websites took the fancy of our brokers this morning, prompting both an upgrade and downgrade.

Heavyweight Goldman Sachs raised its recommendation on newbie Zoopla (LON:ZPLA) to ‘buy’ from ‘neutral’, while Investec went to ‘sell’ from ‘hold’ on Rightmove (LON:RMV).

Goldman’s recommendation was part of a wider look at the housing sector in which it said Crest Nicholson (LON:CRST), Taylor Wimpey (LON:TW.) and Rightmove were its three top picks.

There was also a downgrade to ‘neutral’ from ‘buy’ for FTSE 100-bound Barratt Developments (LON:BDEV).

The note was prompted by Goldman’s need to re-calibrate its estimates to take into account the slightly slower than anticipated rate of recovery of industry.

“We see new build volumes outpacing overall transactions due to ongoing support from the help to buy scheme,” it told investors.

That flurry of activity masked a fairly lacklustre day in brokerland.

Liberum raised Premier Oil (LON:PMO) to ‘buy’ from ‘hold’, while Numis went to ‘add’ from ‘hold’ on the software group Sage (LON:SGE) and JP Morgan Cazenove upgraded to ‘neutral’ from ‘underweight’ on the printer De La Rue (LON:DLAR).

Rounding off the changes, Numis lowered its recommendation to ‘add’ from ‘buy’ on Renew Holdings (LON:RNHW).

Elsewhere Canaccord initiated coverage of the retail sector naming Next (LON:NXT), Bonmarché (LON:BON), Dunelm (LON:DNLM), Boohoo (LON:BOO) and Halfords (LON:HFD) as its top picks.

In its note it told clients: “There are finally some signs of easing in the cost of living squeeze.

“This has helped to underpin the recovery in consumer confidence and consumer expectations of a more positive outlook for their personal financial situation over the next 12 months.

“With deflationary pressures in the core household essentials of food and petrol easing the pressure on disposable incomes, and interest rates not expected to rise before next July at the earliest, the macro-economic backdrop appears favourable for the general retailers sector.”

Dropping down the small-caps, and mining in particular, resources boutique SP Angel came up with a very punchy 12.2p price target for gold explorer Stratex (LON:STI). This valuation would give the stock multi-bag potential, given it is currently changing hands for just 2.8p.

“Unlike many exploration teams, Stratex has recognised the merit of realising value from its properties when appropriate and in the process has generated a meaningful £17.7mln from the sale of its projects over the last three years,” SP Angel told investors.

Sticking with punchy valuations, Westhouse reckons Igas (LON:IGAS) is worth 164p.

“At [the current price of] 56p, we argue that investors in Igas are being offered a free option on UK shale, as the current share price is underwritten by the value of its conventional assets even adjusting for the lower oil price,” the broker said.


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