Accelerating margins and sector-topping growth are among the reasons given by JP Morgan for its upgrade of Reckitt Benckiser (LON:RB.).
The American investment bank today lifted its rating to ‘overweight’ from ‘neutral’, and moved its price target to 6,300p from 6,025p.
“RB shares do not come cheap,” said analyst Celine Pannuti. “But they trade only marginally above peers despite stronger EPS growth and optionality for higher cash returns, while management is still on the lookout for M&A.”
Whilst EasyJet (LON:EZJ) itself upgraded its profit forecasts after record passenger traffic in August, in the City the share has been downgraded by UBS to ‘neutral’ from ‘buy’.
Analyst Jarrod Castle doubts the budget airline’s strong share price performance is likely to be repeated.
“We see the share price performance as being driven by the earnings momentum the company has generated,” he said. “While we continue to see earnings facing an upwards trajectory we do think earnings momentum will be slower than the last three years and that there are capacity challenges EZJ needs to face.”
Bank of America Merrill Lynch has downgraded UK power generator Drax (LON:DRX) to ‘underperform’ from ‘neutral’ and cut its price target to 240p from 295p.
Virgin Money (LON:VM.) has been the odd-one out in the recent UK banking rally, says Investec, which upgraded the stock to ‘buy’ and set a 455p price target which suggests nearly 10% upside to the current price.
Investec also upgraded Centamin (LON:CEY), to ‘buy’ from ‘hold’ and set a 67p target, as it believes the investment case is still intact despite volatility.
Analyst Hunter Hillcoat said: “While we expect the outlook for bullion and gold equities to continue to be impacted by macroeconomic issues, we can still see an investment case in companies with good operating margins and robust balance sheets, and that continue to grow their cash position after paying out meaningful dividends.”