Imperial Tobacco (LON:IMT) is back on the radar of Credit Suisse with an ‘outperform’ rating and 3,600p target price.
The US $7.1bn acquisition of some US brands from Reynolds has the potential to be a game changer for Imperial as it transforms the US business.
In Europe, business looks to be stabilising after some tough years and overall the broker has raised its earnings forecasts by 15% for 2015/16.
Reynolds now also accounts for 22% of British American Tobacco’s (LON:BATS) market value and arguably may have a better business in the US. Outperform is Credit Suisse’s rating with a 3,800p target.
In contrast, Nomura recommends investors cut-down on ciggies, repeating a ‘reduce’ rating for Imperial Tobacco(LON:IMT) and lowered its price target to 2,720p from 2,780p.
Morgan Stanley is a backer of British bookie Ladbrokes (LON:LAD) having lifted its rating to ‘overweight’ from ‘equal weight’.
The US broker also reckons power utility National Grid (LON:NG.) is worthy of an ‘overweight’ rating too.
Elsewhere, Spanish banking group Santander has improved its opinion of HSBC (LON:HSBA) to, essentially, indifference. Santander upgrades its rating for the troubled bank to ’hold’ from ‘underweight’.
Goldman Sachs downgrades its recommendation for Dragon Oil (LON:DGO) to ‘neutral’ from ‘buy’ after the Emirates National Oil Company (ENOC) yesterday moved closer to a takeover with an improved and recommended 750p per share offer.
House builder Crest Nicholson (LON:CRST) is no longer a ‘buy’ either, according to Goldman, which today moved to ‘neutral’.
It is even worse if you sell houses though, as the US investment bank moves estate agency Foxtons(LON:FOXT) to ‘sell’ from ‘neutral’.
Cantor Fitzgerald analyst Adam Forsythe put his recommendation for Flowgroup (LON:FLOW) under review - it was previously a ‘buy’ - after an unfavourable European Court ruling meant Flowgroup's efficient boilers would have to carry VAT at 20% rather than 5%.
Flowgroup shares dropped 36% in Tuesday’s early deals to trade at around 15.4p.
“The early incarnation of the Flow boiler made strong economic sense when VAT was 5% for larger households,” he said. “The VAT change is likely to reduce the set of suitable households and so today’s announcement is understandable if disappointing.
Forsythe says Flowgroup’s product needs momentum in the marketplace and the VAT setback is not helpful.
DP Poland’s (LON:DPP) £5.5mln fund raising will allow the Domino’s Pizza franchise owner to open an additional 20 corporate stores in Poland between 2016/17.
The need for a fund raising has been well flagged and this uncertainty has now been removed, said house broker Peel Hunt.
Trade in voice specialist Tungsten (LON:TUNG) has been downgraded by Canaccord.
Forecasts for revenue and losses are £32mln and minus £13mln in 2016 and £48.9m and minus £0.4m in 2017.
Tungsten has accumulated a large prospective list of suppliers to potentially convert into customers, but early payment operation is now likely to break even until the end of financial year 2018 though a joint venture agreement that Tungsten is currently negotiating could the time to breakeven.
The target price is 96p while buy remains the recommendation.