JP Morgan Cazenove has upped its target price for baby and toddler products seller Mothercare (LON:MTC), going against market sentiment in the process.
The new target is 294p, up from 246p, despite Mothercare's shares taking a bath this morning – down 20p at 267p, having fallen to 260.44p at one stage.
Cazenove goes into bat for the retailer, however, saying: “The UK has reported a positive LFL [like-for-like] growth and – significantly – increased gross margins. As anticipated, economic softness in its Middle Eastern markets has had an effect on growth in the International division, but we believe it remains on track for a good performance overall this year.”
Cazenove's recommendation is 'overweight'.
The same broker has increased its price target for kitchen and joinery products maker Howden (LON:HWDN) after this morning's interim results.
The share price is simmering nicely at around 518p, which is adjacent to Cazenove's previous target price, but the blue-blooded broker has pushed the bar higher to 560p on the back of a 2% increase in its adjusted profit before tax estimates for the next three financial years (including the current one).
Caz sticks with its 'overweight' recommendation after the kitchens maker said sales increased significantly in the first half, while cash generation remains strong.
Another retailer under the spotlight is DIY retailer Kingfisher (LON:KGF) after its trading update this morning, which Iberian broker BESI Research thinks will prompt the consensus profit before tax forecast for the current year edge up by 1%.
“We remain negative on the basis of short-term interest rates in the UK and, longer term, of the length of time and depressing effects on profitability that the re-working of the Big Box estate (and other restructuring) will have,” the broker said.
BESI values the shares at 270p; they currently trade at 371p, making them a sell in BESI's book.
Broking heavyweight Citi is sticking by its 'buy' recommendation for chip designer ARM Holdings (LON:ARM), despite the buffeting the stock took yesterday in the wake of its trading update and the disappointing sales projections made by major customer Apple (NASDAQ:AAPL) on Tuesday evening.
“Despite a steady set of underlying numbers, the ARM stock sold off yesterday reflecting the bearish sentiment within the space, following on from AAPL results on the previous day. While we acknowledge there are near-term head winds, secular concerns appear slightly overdone to us, and are overshadowing ARM’s encouraging licensing & adoption fundamentals,” Citi said, as it revised its target price to 1,160p.
Citi has turned bullish on software firm AVEVA (LON:AVV), increasing its target price to 2,660p, following the announcement earlier this week of a tie-up with Schneider Software to create “a global leader in industrial software”.
“The potential deal with Schneider Software would be transformational, in our view,” Citi said.
Another US broker, Jefferies, has taken aim at two metals & mining heavyweights, downgrading Glencore (LON:GLEN) and South32 (LON:S32) after cutting its commodity price forecasts.
Commodities trader Glencore is downgraded from 'buy' to 'hold', as is S32 – the company spun out of BHP Billiton.
Jefferies reckons iron ore prices are most likely to surprise to the upside in the remainder of 2015 while copper may surprise to the downside.