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Debenhams on track, reckons broker Jefferies

High Street retailer Debenhams catches the eye of US broker Jefferies, which remains a 'buyer' of the shares.

High Street department store Debenhams (LON:DEB) catches the eye of US broker Jefferies, which remains a 'buyer' of the shares.

It reckons the group's strategy is ontrack, and that online improvements, combined with cost efficiencies can drive "a genuine recovery in the stock".

On that basis, it is somewhat surprised that chief executive Michael Sharp plans to step down next year after five years at the helm.

The broker has a target price of 105p, compared to a current price of around 87p.

Analyst Caroline Gulliver added: "With a recently improved delivery offer too we anticipate online sales will accelerate this Christmas.

Meanwhile increasing click & collect sales and an ability to fulfil some C&C orders from store mean Debenhams is well placed to grow profitably now."

Less bullish today is Panmure Gordon on bookie William Hill (LON:WMH), on which it cuts the target price to 339p from 370p and repeats a 'hold'.

"With increasing competition in the UK online gambling market, slowing growth in the UK online gambling market and continued regulatory challenges, we believe better value exists elsewhere in the UK gambling space, mainly GVC Holdings...", it notes.

It comes after what the broker calls a disappointing Q3 trading update, after which it has adjusted forecasts to reflect the impact from a worse than expected decline in non-core markets and weaker Australian performance.

Notably, the broker has cut its 2016 pre-tax profit estimates by £5mln around 2%).

Jefferies also looks at UK drugs firm Shire (LON:SHP) knocking down the target price to 5,600p from 6,450p previously but repeating a 'buy' stance after a "strong" third quarter and management continuing to pursue US rival Baxalta

The broker says its forecasts are essentially unchanged for 2015.

"Despite the recent market dislocation, sellers' views of asset prices and takeover valuations are apparently little changed, raising the challenge of successfully consummating deals.

"Nevertheless, Shire emphasised ongoing plans to pursue bolt-on acquisitions, utilising cash and a $10+bn debt capacity versus the all-share transaction proposed for Baxalta," said analyst Peter Welford.

Also on the downgrade front today, Anglo American (LON:AAL) has its target price cut to 600p from 650p by broker Citi and the rating repeated as 'neutral'.

To smaller firms, and broker Cantor Fitzgerald said that ahead of revising its numbers, it was repeating a 'buy' rating and price target of 24p on Canada focused miner Rambler Metals (LON:RMM).

Operationally, the miner's performance in its 2015 year in light of the collapsing US dollar copper price and persistently weak precious metals was relatively robust, noted Asa Bridle.

The firm's Ming mine in Newfoundland met its key targets of tonnes milled, recoveries and head grades, but fell short of the total copper and gold metal production guidance.

"With a difficult full year 2015 now passed, the focus for the company and the market should be firmly on the development into the Lower Footwall Zone, and the multiple year extension this could give to the life of the Ming mine," he said.

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