The short term outlook for Associated British Foods plc (LON:ABF) is good, says Deutsche Bank, which has upgraded the stock to 'buy' from 'hold'.
And the positive trajectory doesn't just stem from budget clothing arm Primark, noted analyst Warwick Okines.
"Improving sugar prices, recent currency moves and balance sheet flexibility are all in its favour," he says.
At the sugar division, profits should rebound strongly in 2017. At today’s spot, world sugar prices in its full year to September 2017 would be 15% higher year- on -year.
Higher EU prices, and around £20mln lower input costs at British Sugar, and Illovo, all contribute, says Okines.
Meanwhile, Primark is well positioned longer term and 2017 should be the first time in its modern history that over half of the business is outside the UK.
Deutsche says its business model is hard to replicate. It can afford to sell at less than half the price and make less than half the profit per garment as H&M because its volume densities are so high.
Also in brokerland RBC Capital has been busy this morning.
It has upgraded mining behemoth Anglo American PLC (LON:AAL) to 'outperform' from 'sector perform' and lifted the target price to 1,000p from 800p.
On the flip side, in oil, the same broker has downgraded Royal Dutch Shell (LON:RDSB) to 'sector perform' from 'outperform'.
Berenberg reckons mixer drinks firm Fevertree Drinks Plc is on sparkling form and repeats a 'buy' and pumps up the target price to 980p from 810p.
It comes after a "stunning set of results" at the end of July, said the broker
"... the company appears to be going a long way towards cementing its first-mover advantage."
Once again, management has materially upgraded market expectations and having increased its EPS estimates by around 10% in June, Berenberg has now raised forecasts by another 9%/7%/7% for 2016/17/18.
"However, we still feel that there remains potential for further upgrades. In addition, our confidence in the long-term market potential and Fevertree’s ability to maintain share continues to increase."
In small caps today, house broker and resource specialist SP Angel is upbeat on gold miner Anglo Asian Mining Plc and has upgraded its rating on the stock to 'buy' from 'hold'.
It reckons better production, weaker currency and operational savings at its operations in Azerbaijan will drive Total cash costs (TCC) lower and impove free cash flow, which will in turn improve the balance sheet. The broker has calculated a net asset value (NAV) for the company of US$43.3mln or 24p/share, which implies a 29% upside to the current share price (18.6p).