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Brokers: Liberum shares its post-Brexit and Bremain tips

two customers walking out of a Safestore facility
Bookmaker William Hill stands to gain from a Brexit, says Liberum

Three picks if the UK REMAINS in the EU

Housebuilder Berkeley Group PLC (LON:BRK) would be a good investment should a Bremain vote triumph, as it has the most exposure to London, according to Liberum.

The broker adds that “a remain decision would be well received as customers who have been waiting to see [the result] become active again.”

In media, Liberum thinks ITV PLC (LON:ITV) stands to gain a lot should the UK decide to stay in the EU on Thursday and has reiterated the broadcaster as its ‘top buy’.

The broker is happy with the fundametals of the business, and references Spanish broadcasters who were sold off aggressively before this year’s elections, only to rally afterwards as ad spending ramped back up.

Bookmakers William Hill PLC (LON:WMH) has also been tipped to flourish should Britain still be in the EU come Friday morning.

Liberum says that EU regulations allow bookies, like William Hill, to be based in one European territory, such as Gibraltar, while operating in others.

“Brexit could…increase the complexity of accessing markets in Europe which go down the regulated route,” the broker explains.

 

Three picks if the UK LEAVES the EU

Building materials suppliers Wolseley PLC (LON:WOS) should, in theory, benefit greatly from A Brexit vote, claims Liberum.

“Wolseley makes around 80% of operating profits from its US business, and a further 10% from Canada, Nordics and Central Europe,” the broker said, highlighting the lack of exposure to UK markets.

“The pound denominated share price should be a beneficiary of weaker pound, especially compared to the dollar.”

Jimmy Choo PLC (LON:CHOO) should be “a relative outperformer” in the event of a leave vote, says Liberum.

“Q1 provided comfort that the CHoo brand is showing resilience in a difficult market” which will stand it in good stead should Britain Leave.

The broker also claims that the luxury goods brand has a “natural currency hedge” given that around 75% of its sales are in euro- or dollar-linked currencies.

Electronics and technology firm Laird PLC (LON:LRD) also gets Liberum’s seal of approval should Brexit prevail on Thursday.

The broker notes that 75% of revenue is in US dollar, although the company reports in British pounds.

Therefore, a 1c move in the dollar/ pound exchange rate, equals roughly a 1% move in earnings per share.

Liberum adds that 12.5% of its revenue is also in Euros, so it stands to benefit if the currency strengthens in the event of a Brexit.

 

Elsewhere, Liberum reiterated its ‘buy’ rating for storage company Safestore Holdings PLC (LON:SAFE), setting a price target of 450p, representing a potential 12% upside on today’s price of 401p.

Fellow self-storage firm Big Yellow Group PLC (LON:BYG) wasn’t viewed quite so positively by JP Morgan Cazenove, with the investment bank downgrading Big Yellow from ‘neutral’ to ‘underweight’.

Elsewhere, residential property investor Grainger PLC (LON:GRI) has been bumped up from ‘neutral’ to an ‘overweight’ rating from JP Morgan Cazenove.

Barclays Capital has slightly upgraded education specialist Pearson’s (LON:PSON) target price to 825p from 815p.

Jefferies International has moved up energy and mining giant BHP Billiton PLC’s (LON:BLT) target price to 925p from 875p.

Jefferies also repeats its ‘buy’ recommendation for portfolio manager Daily Mail and General Trust LON:DMGT), though the US investment bank has cuts its price target to 736p from its previous target of 1016p.

Deutsche Bank repeated its ‘buy’ recommendation for Investec PLC (LON:INVP) although it cut its share price target by 30p to 580p.

US banking giant Goldman Sachs has downgraded InterContinental Hotels Group PLC (LON:IHG) to a ‘neutral’ rating from ‘buy’.

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