Is it a case of good riddance?
As George Osborne’s plans to sell the government’s holdings in Royal Bank of Scotland (LON:RBS) and Royal Mail (LON:RMG) are confirmed, JP Morgan Cazenove is upgrading its rating of the latter to ‘overweight’ from ‘neutral’.
Elsewhere, Investec said the Chancellor’s exit of RBS was widely expected and as such the Mansion House speech was ‘largely symbolic’.
The initial sell down of the government’s 79% majority stake in the bailed-out bank will be small, according to Investec analyst Ian Gordon, who also says the stake could be sold during 2015.
Investec rates RBS as a ‘buy’, with a 395p price target.
“We think that the timing of last night’s announcement was arguably somewhat premature, dictated more by politics rather than, necessarily, an exercise in optimising market timing,” Gordon said.
“That said, we continue to believe that the RBS share price will see support on a 12 month view from the emergence of a material capital surplus and a return to (reported) profit in 2016e.”
Sainsbury (LON:SBRY) was upgraded to ‘buy’ from ‘hold’ by Cantor Fitzgerald analyst Mike Dennis who reckons the UK supermarket stock may now be seeing the bottom of the cycle.
Dennis, who has a 312p price target, retained a top-of-the-range £605mln forecast for the group’s pre-tax profits and he also highlights the support of a 4.4% dividend yield.
Sainsbury yesterday revealed a further dip in sales, again blaming completion from discount rivals.
Elsewhere, Barclays Capital upgraded its target price for FirstGroup (LON:FGP) to 130p from 110p, and repeated an ‘equal weight’ rating.
And, Liberum Capital upgraded Majestic Wine (LON:MJW) to ‘buy’ from ‘hold’ and said the new acquisition of Naked Wines is transformational for the group, the business model and the investment case.