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Clothes retailers fashionable among City analysts

Clothes retailers fashionable among City analysts
Nomura now sees Next as a 'buy'


Highstreet and catalogue retailer Next (LON:NXT) has been upgraded to ‘buy’ from ‘neutral’ by Nomura, which sets a new price target of 8,000p, some 5% above the current price of 7,620p.

At the same time Liberum Capital has upgraded online clothes retailer ASOS (LON:ASC) to ‘buy’ from ‘hold’.

The broker also lifted its price target for Primark owner Associated British Food (LON:ABF) to 3,450p from 3,340p whilst repeating a ‘buy’.

Citigroup, meanwhile, has taken the axe to its rating of electronics retail group Premier Farnell (LON:PFL) which is now seen as a ‘sell’, down from ‘neutral’, with a 90p target reduced from 140p.

Quite someway away from the highstreet, Genus (LON:GNS) - a company specialised in the artificial insemination and the 'genetic improvement' of cows – was upgraded to ‘hold’ from ‘sell’ by broker N+1 Singer.

Goldman Sachs no longer rates Kaz Minerals (LON:KAZ) as a ‘sell’ and instead now has it marked as ‘neutral’.

Oil field developer EnQuest (LON:ENQ) was written up by Macquarie which now sees the stock as one that can ‘outperform’ rather than ‘underperform’.

Morgan Stanley downgraded building firm Wolseley (LON:WOS) as it recommended portfolios to be ‘underweight’ the share rather than ‘equal weight’.

Dougie Youngson, analyst at FinnCap, reflected on Independent Oil & Gas’s (LON:IOG) positive update – that it has commitments (worth £7mln) from contractors that help move it towards drilling at the Skipper project.

“It is extremely encouraging to see the progress being made at Skipper and that the industry is being supportive,” he said in a note.

“A positive outcome from this process and ultimately the drilling of the well could be transformative for the company.”

VSA Capital, meanwhile, said it remained confident in IOG’s strategy and the quality of its assets.

“We are pleased to see that following the disappointing withdrawal of the strategic investor, IOG has made significant progress toward the submission of a development plan on its Skipper field which contains 2C resources of 26mboe,” VSA said.

“Moreover, the Darwin loan (£0.36m) was extended from 4 October to 7 December 2015 without any further incurred cost or interest. Despite the fact that the company is only funded until late October, we remain confident in IOG’s strategy and the quality of its assets.”

Elsewhere, Dr Ryan Long, analyst at Northland Capital, says newly revealed details of Arian Silver’s refinancing should allay shareholder fears of substantial equity dilution.

“Though the deal has yet to be concluded, the provisional terms announced here seem as positive as Arian could hope for, yet we urge caution as the full terms of the financing are yet to be agreed,” the analyst said in a note.

“We await confirmation from the company that the sum of the funds announced here will be enough to fill the cash shortfall and get the company back on its feet.”

Cantor Fitzgerald took a positive view of Trinidad focussed Range Resources (LON:RRS), with analyst Sam Wahab saying:  “In our view shareholders will be encouraged with the renewed outlook of Range, which should see a material uplift in production and cash flow over the next 12 months.

“The recent cash injection sees the company fully funded to carry out its long-term strategy and mitigates any dilution risk.”


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