A downgrade is probably not what Associated British Foods’ (LON;ABF) management expected after shipping analysts off to Spain to see its new flagship Primark store.
It’s what it got today, however, as Societe Generale cut its stance to ‘hold’ from ‘buy’.
It had nothing to do with the new shop, but at close to its target price of £33 the group is looking fully valued said the French broker, with 33 times earnings multiple for 2016 and 40 times implied for Primark.
SocGen, meanwhile, remains a seller of Vodafone (LON:VOD) with the mobile giant now facing a clear choice it said: Either divert valuable resources to a re-positioning or ‘starve’ the business to fund an overly generous dividend policy.
A brave decision today could brighten up the outlook tomorrow, said the French broker, but it clearly does not expect one as it had cut its earnings expectations by 18% and 22% for the next two years.
Saga (LON:SAGA) the wealth manager and financial services specialist for the over fifties has got its second upbeat write-up in as many days.
Peel Hunt today pointed to confirmation from insurer LV= that motor premiums are rising, adding this is good news for Saga.
LV=, the UK’s number three motor insurer, said rates had risen 8% year-on-year and increases are being achieved across both new business and renewals.
“A cycle turn should support valuations in the UK Motor sector and underpin dividend expectations,” said the broker.
Saga has an attractive affinity broker model it added and its rating is buy and price target 254p.
Credit Suisse has lowered its forecasts for luxury goods group Burberry (LON:BRBY) after the disappointing trading update yesterday.
Should better sales fail to materialise in the second half, there will be little room to cut further variable costs, which could lead to further downgrades said the broker.
Motif Bio (LON:MTFB) announced a clinical trials agreement with Covance, a leading global Contract Research Organisation (CRO).
Northland said it ensures a timely start to antibiotic iclaprim’s planned Phase 3 programme.
As such, Motif remains firmly on track to meet its goal of marketing iclaprim in 2018, especially as Covance has unparalleled experience in running antibiotic trials.
Buy with a 114p target price.
Investec says coloured gems mining and marketing group Gemfields (LON:GEM) remains a unique company, but adds challenging macroeconomics facing the jewellery market cannot be ignored.
In its favour is a management team with a strong track record and once the jewellery market recovers it expects it to be able lift product pricing once again. The 6 auctions planned over this financial financial year will be key value driving events.