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Brokers pick their winners post-Brexit

Broadcaster ITV was downgraded, as was airline group IAG

a pair of Jimmy Choo shoes
Shoe designer Jimmy Choo has been tipped to perform well post-Brexit

Brokers have woken from their shock at the outcome of the Brexit vote and come up with lots of potential winners now that the UK is set to leave the European Union.

First out of the traps was UBS, which identifies nine potential winners and after today’s early morning bloodbath they much cheaper than when identified by the Swiss bank.

As you might expect, currencies play a major part in the selection with the pound tanking already to a 31-year low, though it had started to pick up again.

The Swiss bank picked out a total of fifteen companies listed in the UK and Europe which it says are ‘Brexit winners’ but have yet to outperform the rest of the market.

It noted that these companies benefit from having a combination of lower UK sales exposure and the potential for a boost to profits due to the weaker British currency.

The ‘winners’ identified by UBS are as follows:

Sophos Group Plc (LON:SOPH), down 3.3% today at 173.2p.

Imagination Technologies Group Plc (LON:IMG), down 2.6% at 176p.

AstraZeneca Plc (LON:AZN), up 0.4% to 3,915p

Prudential Plc (LON:PRU), down 8.7% at 1,240p.

Arm Holdings Plc (LON:ARM), up 0.5% at 1,024p.

Vodafone Group (LON:VOD), down 3.67% at 209.9p.

Diageo Plc (LON:DGE), up 0.7% at 1,845p.

Centrica Plc (LON:CNA), down 5.45% at 206p.

Meggitt plc (LON:MGGT), down 4.2% at 379.9p.

 

Liberum also added to that list, speculating which companies it thinks are best-positioned to take advantage of the leave vote.

Similar to UBS’s picks, a lot of these companies have a natural hedge against a weaker British pound.

Genus PLC (LON:GNS), down 6.19% at 96p.

Melrose Industries PLC (LON:MRO), down 2.38% at 410.5p.

Plus500 Ltd (LON:PLUS), down 2.43% at 603.5p.

Wolseley PLC (LON:WOS), down 2.16% at 3764p.

Jimmy Choo PLC (LON:CHOO), up 1.8% to 109p.

Laird PLC (LON:LRD), down 6.4% at 318p.

 

It was relatively quiet on the broker front this morning given the EU referendum results with only a few downgrades, but one firm bucked the trend.

Sirius Minerals PLC (LON:SXX) saw its target price upgraded more than 20% to 50p from 40p by broker Liberum, which also reaffirmed its ‘buy’ rating for the stock.

Liberum noted that the fertiliser development firm has reduced the capex required to build its polyhalite mine by 18%, from US$3.6bln to US$2.9bln.

Liberum adds that the firm continues to make good progress on its financing.

Elsewhere, there were a few downgrades from brokers before the news filtered through confirming that the UK had voted to leave the EU.

Societe Generale downgraded media giant ITV PLC (LON:ITV) to a ‘sell’ recommendation from ‘buy’.

International Consolidated Airlines Group SA (LON:IAG) was also downgraded from ‘outperform’ to an ‘underperform’ rating by RBC Capital Markets, as the firm warned on profits following the EU referendum results.

Shopping centre operator Intu Properties PLC (LON:INTU) saw its price target cut by Deutsche Bank, while oil services provider Petrofac Ltd (LON:PFC) also had its target price cut by Barclays Capital.

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