Heavyweight JP Morgan Cazenove is quite gushing about UK water services provider Severn Trent PLC (LON:SVT) after it posted prelims yesterday, which beat expectations.
Analyst Christopher Laybutt has repeated an 'overweight' stance and turned up the target price to 2,250p from 2,160p previously.
"Despite a period of strong performance in recent weeks, we see further upside to the current share price," he said in a note to clients.
The Midlands - focused firm, which serves over 3mln homes, beat analyst expectations with a pre-tax profit of £322.3mln, up from £148m in 2014, despite recording slightly lower revenue of £1.78bn.
JP Morgan said the underlying EPS (earnings per share) was 108.7, 7.0% above its estimate (101.6p) and 7.3% above company provided consensus (101.3p).
"The beat was mainly driven by a surprise drop in net finance costs, with effective finance costs plunging 90bps to 4.5% in the period."
The broker has upgraded its 2017-19 estimates by around 6% on average.
The same broker looks at peer Pennon Group plc (LON:PNN), and noted too it had an earnings beat today, driven by a sharp reduction in finance costs.
It has a 'neutral' rating on this stock, however, but has lifted the price target to 850p from 800p.
The broker has, though, lifted the 2017 EPS estimate by 4.5% and its 2018 estimate by 3.8%, although these were modest by comparison to SVT’s 6-7% upgrades, it notes.
Elsewhere, in brokerland, US house Jefferies has looked at much-in-focus retailer Marks & Spencer PLC (LON:MKS) and downgraded shares to 'underperform' from 'hold'.
On Wednesday, over £700mln was wiped off the value of the group after chief executive Steve Rowe warned the turnaround starategy would hit profits in the short term.
Jefferies also slashed the price target down to 300p from 410p
Analyst Caroline Gulliver noted new chief had set out his customer centric strategy to improve customer satisfaction, which, she says, may well work.
"However we believe the cost of achieving this, combined with macro and competitive headwinds, renders M&S unappealing for now. Trading on c.14.5x our lowered call 17 EPS estimates we cut our target price by 27% to 300p and downgrade to Underperform despite some dividend appeal."
Macquarie also repeats an 'underperform' on the shares and lowers the target to 370p from 380p. Exane BNP Paribas also downgrades the shares to 'underperform' from 'neutral'.
Elsewhere, High Street bookies William Hill PLC (LON: WMH) has a 'buy' rating repeated by Deutsche and the target price lowered to 420p from 445p.