Goldman Sachs had the red pen out this morning with UK utilities Centrica and SSE (LON:SSE) on the receiving end due to expected lower gas prices as LNG supply grows.
The US broker sees gas price falling by 16%-23% between 2017-19 while its medium term gas price forecast has been chopped by 30%.
Not good news for gas suppliers and Centrica (LON:CNA) has been downgraded to hold with a price target of 215p though it is SSE that really cops it.
The utility is now on Goldman’s conviction sell list with its dividend under threat.
Earnings are set to fall by 19% over the next five years (2015-20) suggests the broker. The price target is 1,225p.
Marks & Spencer (LON:MKS) remains a buy for Jefferies after first half profits beat estimates by 5%, though merchandise sales remained weak.
Jefferies thinks the shares still offer value, nonetheless, and a good Christmas would really set M&S on fire. Buy with a 660p target price.
Mining titan Glencore (LON:GLEN) has received an upgrade from Deutsche Bank on its improving debt position.
Liquidity has increased by US$3.3bn since June and the $25bn net debt target by year end is well on the way to the low $20bns targeted for end 2016.
“With the stock overcoming debt fears, ongoing catalysts this year and trading below our price target, we upgrade to ‘Buy’.”
Rolls-Royce (LON:RR.) remains a sell at Investec, with consensus expectations for underlying earnings seen as too optimistic in both the short and long term the broker believes.
In our view, they do not reflect the strategic, end market, accounting or operational challenges that Rolls has to address over the coming years.
A trading update on 12 November is a likely negative catalyst but is unlikely to be the last. Sell with a 520p target price.
Among the small caps, Cantor Fitzgerald has kept a 20p target on sustainable technology group APC Technology (LON:APC) after an operational which the house broker sees as reassuring. 'Buy' is its view.
Cantor also likes Indian power utility OPG Power (LON:OPG) and has given it a 134p target compared to a market price of 82p.
A trading update today indicated output is growing with the new capacity at Chennai and Gujarat and the outlook remains in line with management expectations.
“Although the second unit at Gujarat is now due in January this was within our range of expectations and should not have impacted value. We think today's statement should give some comfort.”