Three picks if the UK REMAINS in the EU
The broker adds that “a remain decision would be well received as customers who have been waiting to see [the result] become active again.”
The broker is happy with the fundametals of the business, and references Spanish broadcasters who were sold off aggressively before this year’s elections, only to rally afterwards as ad spending ramped back up.
Liberum says that EU regulations allow bookies, like William Hill, to be based in one European territory, such as Gibraltar, while operating in others.
“Brexit could…increase the complexity of accessing markets in Europe which go down the regulated route,” the broker explains.
Three picks if the UK LEAVES the EU
“Wolseley makes around 80% of operating profits from its US business, and a further 10% from Canada, Nordics and Central Europe,” the broker said, highlighting the lack of exposure to UK markets.
“The pound denominated share price should be a beneficiary of weaker pound, especially compared to the dollar.”
“Q1 provided comfort that the CHoo brand is showing resilience in a difficult market” which will stand it in good stead should Britain Leave.
The broker also claims that the luxury goods brand has a “natural currency hedge” given that around 75% of its sales are in euro- or dollar-linked currencies.
The broker notes that 75% of revenue is in US dollar, although the company reports in British pounds.
Therefore, a 1c move in the dollar/ pound exchange rate, equals roughly a 1% move in earnings per share.
Liberum adds that 12.5% of its revenue is also in Euros, so it stands to benefit if the currency strengthens in the event of a Brexit.
Jefferies also repeats its ‘buy’ recommendation for portfolio manager Daily Mail and General Trust LON:DMGT), though the US investment bank has cuts its price target to 736p from its previous target of 1016p.
US banking giant Goldman Sachs has downgraded InterContinental Hotels Group PLC (LON:IHG) to a ‘neutral’ rating from ‘buy’.