Berenberg has slashed its price target for Next Plc (LON:NEXT) to 4800p, down from its previous target of 7300p, claiming that the high street retailer is stuck “between a rock and a hard place.”
The German bank reiterated its hold rating for the stock, but said a changing customer base “presents a significant structural challenge” in the long term, and believes the company may face further revenue pressure in the not-to-distant future.
Restaurant Group PLC (LON:RTN), which owns brands such as Chipotle, also had its price target cut by Barclays Capital to 321p from its previous estimate of 475p.
Barclays says that a brand refresh is probably needed for its “troubled” Frankie & Benny’s chain, while for the group as a whole, “prices must be cut significantly [and] food quality improved,” this morning’s note adds.
Barclays expects the group to open new 23 new sites in FY17, although it believes this “rollout should be cut” to save cash.
On a more positive note, Cantor Fitzgerald has upgraded Sound Energy PLC (LON:SOU) to a ‘buy’ recommendation and upped its share price target to 40p after today’s update reporting its successful first well in Morocco.
Cantor says “this is ahead of initial expectations, and is material in terms of the company’s chances of unlocking the play.”
The broker added that it sees Sound’s share price “as a compelling entry point for investors.”
Moving on to the bigger players, Jefferies International reiterated its ‘buy’ recommendation for Era locks’ owner Tyman PLC (LON:TYMN), raising its share price target to 320p from 310p.
The share price upgrades comes after Tyman announced the acquisition of US roof hatch and fire vent manufacturer Bilco.
Jefferies says the tie-up should give the company “a decent foothold in the US commercial space”, as well as providing the platform for future growth, hence the share price offer.
Inspection and certification specialist Intertek Group PLC (LON:ITRK) had its price target upgraded by Credit Suisse to 3200p from the previous target of 2900p, while the bank reiterated its ‘neutral’ rating.
Broker Liberum reiterated its ‘buy’ rating for Majestic Wine PLC (LON:WINE), setting a price target of 510p, 14% higher than its opening price on Monday morning.
The broker noted positive like-for-like sales growth for the first time in four years, and said Majestic was “increasingly well positioned in all areas of the business.”
Education specialist Pearson (LON:PSON) held an investor day on Friday (17 June), and brokers were split on their opinions of how the event went.
Shore Capital reiterated its ‘hold’ rating of the stock and issued a guide price of 823p, claiming that the strategy management is using to reverse its fortunes is “the correct one”.
Shore added that it felt “more positive on [Pearson’s] prospects” following the investor day and that global learning markets offer “attractive growth potential.”
On the other end of the scale, Liberum were unconvinced by the company’s investor day, reiterating Pearson as “the top sell in media” and setting a price target of 435p, almost half of its current share price.
The broker said it was “difficult to see how management could be so confident” and pointed to “structural concerns” surrounding higher education in the US, a key market for the education group.