QQ’s rally, up to around 235p from 180p in April, has gone too far according to the Swiss bank, which believes margin pressure will likely stunt profit growth.
“We estimate that the current share price is pricing in no margin decline,” says UBS, which sees QQ’s ‘fair value’ at 205p.
“The recent share price decline allows us to use base case margin assumptions and see the stock as broadly fair value,” the bank said of Meggit.
Microchip maker Arm Holdings (LON:ARM) is expected to fall behind its peers, according to Bernstein, which cuts the stock to ‘underperform’. With a new price target set at 800p, Bernstein sees nearly 30% downside to Arm’s current price of 1,100p.
Debenhams’s strategy appears “solidly on-track” said Jefferies, which lifted its price target to 105p from 85p and repeated a ‘buy’ recommendation.
Similarly Deutsche, which has a ‘hold’ rating, reckons the retailer is moving in the right direction; its price target increases to 87p from 77p.
Analyst Sebastian Yoshida said he was sceptical about the drivers behind the recent 15% rally in the oil services group’s shares.
JD has a fascia that has been winning footwear market share since 2011 and will continue to do so.
This underpins the broker’s top of the range forecasts. On 14 times earnings, the shares are a clear ‘buy’ says Peel Hunt.
Earnings estimates have been tweaked higher due to price increases for BT Sport, putting the telecoms group on an attractive valuation said the broker.
Outperform is its rating with a price target.
Telit (LON:TCM) is a global leader in the Internet of Things (IoT) and machine-to-machine (M2M) connectivity market.
Having met chief executive Oozi Cats, he particularly optimistic about the company’s automotive and cloud businesses, alongside its emerging strength in Asia-Pacific.
Revenues are expected to grow by 20% compound over each of the next three years and a sUBStantial discount to M2M module manufacturers is still unjustified. Buy with a price target of 410p says Berenberg.
The company is already seeing good growth in its online presence, however the launch of Marketplace will demonstrate whether the company can become a major player in collectibles online. Early signs are encouraging. 'Buy' with a 330p price target.