Credit Suisse has downgraded BAE Systems (LON:BA.) to ‘underperform’ from ‘neutral’.
Recent Saudi Arabia issues - financial impacts of low oil prices and political tensions with Iran - are 'not supportive' of the company receiving any large order from the Kingdom in the near future, it says.
Analyst Olivier Brochet also said the share has rallied too strongly following recent US budget news.
“While BAE Systems will benefit from its 36% exposure to the US budget and the weakening of the GBP is also a boost to its US sales and profits translated back into sterling, however BAE Systems has been outperforming by 15% its US peers since the budget deal announcement in late October, despite benefitting less than them,” he said in a note.
Meanwhile fellow Credit Suisse analyst Guillaume Gauvillé called Burberry (LON:BRBY) “structurally challenged” as he downgraded to ‘underperform’ from ‘neutral’. The broker’s target drops to 1050p from 1250p.
Conversely, rival Swiss bank UBS upgraded the fashion brand to ‘buy’ from ‘neutral’ and said valuations were too negative and that ‘brand potential’ was being overlooked.
Santander cuts its rating for Next (LON:NXT) to ‘underweight’ from ‘hold’, and the bank’s target for the retailer was set at 6590p (current price: 6730p).
Smith & Nephew (LON:SN.) is downgraded by Deutsche Bank to ‘hold’ from ‘buy’ and the price target drops to 1150p from 1190p.
Elsewhere, Barclays is more bullish about AstraZeneca (LON:AZN) as it upgrades to ‘equal weight’ from ‘underweight’.
Investec upgraded juice and soft drinks group Britvic (LON:BVIC) to ‘buy’ from ‘hold’.
Pharma and services group Clinigen (LON:CLIN) enjoyed a solid first half says house broker Peel Hunt, but the remainder of the year looks better as acquisitions start to contribute strongly.
The broker forecasts interim profits before tax to £21mln rising to £50.5mln for the full year. ‘Buy’ with a 1,000p target.
Liberum has started coverage on Johnston Press (LON:JPR) with a buy recommendation as it sees the fundamentally worthless equity value currently placed on the media group as wrong.
“The market's pessimism has peaked at a time when the fundamental outlook for Johnston Press is turning. “Management have demonstrated cost control; demand for trusted online audiences is growing; and print's role in the media advertising model is being more appreciated.” The target price is 120p.