Halfords (LON:HFD) had its price target lifted to 430p from 390p by Berenberg, but, as the current price is around 550p, investors won’t get carried away.
Repeating a ‘sell’ recommendation Berenberg gave any bullish investors three reasons to get on their bike.
Analyst Michelle Wilson says the market for cycling products will continue to disappoint, while at the same time a ‘service-led’ strategy will mean higher staffing costs and, she adds, that changes to a ‘living wage’ in the UK will make it worse.
Finally, Wilson’s third reason to sell is a transition to higher online sales that she says will increase distribution costs.
Elsewhere at Berenberg analyst Fintan Ryan reckons Associated British Food (LON:ABF) deserves a higher price target of 3,450p, up from 3,200p, as he expects sugar producers in Europe to benefit from a phase of liberalisation in the agriculture sector.
Dairy and sugar have been the most ‘protected’ - or inhibited, depending on your point of view – agriculture industries in Europe, but the current quota regimes are set to be abolished in April.
“This will offer EU producers of both commodities the opportunity to increase production and gain share of both domestic and export markets, albeit likely at the cost of greater volatility, convergence with world pricing levels and normalisation of margins,” Ryan said in a note.
You know it is August when the day’s upgrades and downgrades comprise entirely of target revisions, and no recommendations change.
Volatile macroeconomics will, no doubt, also be a factor in the seasonally typical summer fence-sitting.
Cantor Fitzgerald upped its target for Breedon Aggregates (LON:BREE) to 60p from 55p, and repeated an existing ‘buy’ recommendation. Analyst Ian Osburn, in a note, said: “The main drivers of Breedon’s first half outperformance appear to be ongoing.
“We believe this will enable the group to continue to beat consensus expectations as long as price competition does not become too fierce.”
Financial software group Fidessa (LON:FDSA) had its price target reduced to 1,860p from 2,050p by Barclays Capital, which also cut-back its target for mining group First Quantum (LON:FQM) to 830p from 1,000p. The two stocks are respectively rated as ‘underweight’ and ‘overweight’.
Vedanta (LON:VED), which is rated as ‘hold’ by Deutsche Bank, had its target lowered to 565p from 610p.