GlaxoSmithKline (LON:GSK) is on-track to “emerge from a cycle of negative earnings momentum” according to Barclays Capital.
“We have increased confidence that an earnings trough has been met,” analyst Simon Mather said in a note.
Mather believes there is some 385p per share upside to GSK’s valuation.
Also at BarCap, BG Group (LON:BG.) is upgraded to ‘overweight’ from ‘equal weight’ though the price target stays at 1,350p (in light of the pending merger with Shell).
“With earnings down 65% y/y it is clear that BG does not have the downstream protection that other businesses do, but it does appear that finally the group is delivering the operational performance and financial discipline that the market has been waiting for,” said analyst Lydia Rainforth.
“We recommend BG shareholders continue to hold the stock to take advantage of the closing arbitrage gap and the potential Shell yield.”
UBS, meanwhile, has upgraded Shell (LON:RDSB) to ‘buy’ from ‘neutral’ and it says that the benefits of the BG transaction have been better clarified. A more significant response to lower crude prices is another positive highlighted by the blue-chip Swiss bank.
As well as upgrading to ‘buy’, UBS also increases its price target to 2,150p from 2,130p (current price 1,856p).
Elsewhere, Berenberg downgraded Domino’s Pizza (LON:DOM) to ‘hold’ from ‘buy’ as analyst Robert Chantry says the current share price is now ‘up with events’.
The fast-food business is still has a strong balance sheet and strong like-for-like growth, he points out, though at the same time the share price is up 40% since November (when the broker began coverage with a ‘buy’).
Berenberg also upgraded TalkTalk (LON:TALK) to ‘hold’ from ‘sell’.
German private bank Bankhaus Lampe has downgraded Barclays (LON:BARC) to ‘hold’ from ‘buy’,
Meanwhile, price targets for Diageo (LON:DGE) have been downgraded by Citigroup and JP Morgan Cazenove; which now look for 1,850p and 2,150p for their respective ‘neutral’ and ‘buy’ recommendations.