Best of the Brokers for 21 March 2014
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SPIRIT PUB COMPANY
Numis keeps its “buy” rating and 110p target on the pub group after the alcohol tax cuts in the Budget. The broker thinks the beer tax cut will save Spirit one per cent of profits, compared with two per cent for Wetherspoons, but notes that many firms will pass the saving to customers.
CLOSE BROTHERS
Canaccord Genuity has upgraded the banking group from “hold” to “buy” and raised its target from 1,400p to 1,800p. The broker believes there is hidden value in Close brothers, with potential double-digit growth in its loan book and 25 per cent return on equity.
SMITHS GROUP
UBS keeps its “sell” rating for the engineer and cuts its 12-month target from 1,340p to 1,220p. The broker reckons Smiths lacks momentum, with just four per cent organic sales growth, and a cost cutting plan that is already factored into the firm’s stated targets.