Diageo (LON:DGE) was a top riser today after RBC Capital slapped a big upgrade on both its investment view and price target.
The broker said it doesn’t matter if Brazilian private equity group 3G Capital's purported takeover interest is genuine or not, what is more important is that it's a credible story and should prompt management introspection.
“Selling off beer wouldn't make much difference, but there is a substantial cost saving opportunity.
Forecasts for margins and earnings per share have been raised while the price target jumps 24% to £21 from £17. ‘Outperform’ is the new rating.
Peel Hunt has trimmed its rating on cake and cafe chain Patisserie Holdings (LON:CAKE), despite the broker being very impressed with progress.
“Management has achieved much: improving margins in Philpotts, self-funding the opening programme from operating cash flows, and developing a more flexible format.”
But the company’s rating is high enough to suggest some short-term consolidation is likely, so ‘hold’ (from buy) is the recommendation with a 328p target price.
Jefferies has updated its price targets across the E&P sector to account for the rise in Brent crude recently to US$60/b Brent (from $52/b).
NAV-based price targets for producers Tullow (LON:TLW), Premier Oil (LON:PMO), Soco (LON:SIA) and IGas (LON:IGAS) have all been nudged up, though Cairn Energy (LON:CNE) is Jefferies’ top pick, even before today’s announcement of a merger between Indian associate Cairn Energy and Vedanta.
The US broker especially likes Cairn’s exposure to a “material (330mmb)” early stage oil development appraisal opportunity offshore of West Africa (Senegal), which it sees offering significant upside potential for the share price.
German bank Berenberg has puffed up its target price on British American Tobacco (LON:BATS) to 4,000p from 3,850p and repeated a 'buy'.
It comes after news on Friday that Reynolds American (RAI) had closed its purchase of Lorillard. As part of the deal BATS retains its holding in US firm Reynolds at 42%.
The broker reckons the deal gives 5% upside to BAT's EPS from the current Bloomberg consensus of 226p.
Low cost carrier easyJet (LON:EZJ) saw shares sink to bottom of Footsie today, as RBC Capital Markets lowered the stock to 'underperform' from 'outperform'.
The target is 1500p.
Also in brokerland, Unilever (LON:UNVR), the multinational, receives a thumbs down from heavyweight JP Morgan Cazenove as it moved the target price to 2,770p from 2,900p and repeats an 'underweight' rating.
Orosur Mining’s (LON:OMI) latest update should be taken as a positive , especially the fact the open pit operations have been able to provide more ore than originally planned.
This will allow allowing some production from the higher grade Arenal underground mine to be delayed. The target price is 32p, based on mining and financial metrics taken from OMI’s peer group of London-listed gold producers. Buy is the rating.