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AstraZeneca PLC lacks catalysts for 2016 - Jefferies

Last updated: 11:32 15 Mar 2016 GMT, First published: 09:48 15 Mar 2016 GMT

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Broker Jefferies has cut its rating on drugs giant AstraZeneca PLC (LON:AZN) to 'hold' from 'buy' saying there's a lack of catalysts in 2016 to re-rate shares.

The target price is also clipped back to 4350p from 4900p as the US house provides a lengthy note on global pharma where it reassesses valuations.

On Astra it says it continues to see upside in the long term driven by the IO (immuno oncology) pipeline in particular, though the key confirmatory catalysts behind it may not be visible until 2017.

There is potential upside in 2016, it suggests, driven by factors including benralizumab and the drug's phase III data in severe asthma and US approval and launches of ZS-9/ PT-003.

Other recommendations are GlaxoSmithKline (LON:GSK) at a repeated 'hold' with a target of 1,00p (current price: 1,15p).

Among the preferred stocks is Eli Lilly (NYSE:LLY), which it rates as a 'buy' and target price of $105.

Also in broker world today, tax payer owned bank RBS (LON:RBS) is upgraded by heavyweight Goldman Sachs to 'buy' from 'neutral', while Citigroup gives troubled outsourcer Serco (LON: SRP) a repeated 'neutral' stance.

However, it lifts the price target to 105p from 90p to reflect the sector’s recent rerating.

"...while it is encouraging to that Serco’s bid pipeline has partially recovered from its compressed state, we still await proof that its sales force can consistently win at management’s new margin and return criteria.

"With our model including negative free cashflow through 2018, we retain our cautious stance."

The same broker lowers the price target on G4S (LON:GFS) to 190p from 230p and repeats 'neutral'.

Also on the downgrade side, oil services firm John Wood Group (LON:WG.) is moved to 'sell' from 'hold' by City firm Canaccord Genuity. The target is 575p (current price: 618.5p).

Pawnbroking comes under the eye of Finncap analyst Duncan Hall who has a note on H&T GROUP PLC (LON:HAT).

He rates shares a 'buy' and targets 220p (current price: 206p).

It may be a mature sector but it is profitable and the introduction of new products such as small personal loans supported by a national retail presence places H&T in a stronger position in the evolving alternative credit market than is perceived.

"Returning to lending growth from the starting point of negligible group debt, while offering a 4.5% dividend yield and trading below NTA, appears attractive," adds the analyst.

Elsewhere Shore Capital looks at potash mine developer Sirius Minerals (LON:SXX), which said today its DFS on the York project will be out on Thursday.

The broker said: "While an investment in Sirius will become progressively derisked as the company advances towards production, we believe that it already offers a more robust, lower-risk investment with the prospect of better returns than typical of its peers."

It estimates a risked net present value of 50p a share and repeated a 'buy' recommendation. Sirius shares rose over 18% on the day to 21p.

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