BEST of the BROKERS
GLENCORE
UBS has downgraded the commodities giant from “buy” to “neutral” and lowered its target price from 475p to 400p following Glencore’s first quarter trading update. The bank said it still sees Glencore as the most dynamic company in EU mining over the next three years, but is concerned about the operational leverage of its industrial assets in an increasingly uncertain macro environment. But the Xstrata merger will be a key driver of stock in the near term.
HILTON FOOD
Numis recommends “hold” for the meat-packing business, down from “add” following Hilton’s interim management statement. Analyst Charles Pick said the trading update is generally positive and there is nothing here that should surprise. But Numis has cut Hilton’s profit estimates by about two per cent, “simply reflecting Sterling’s recent strength”, and lowered the target price from 329p to 322p.
MORRISON
JP Morgan has upgraded the supermarket from “underweight” to “neutral” as it believes Morrison no longer represents a significant selling opportunity. But many of JP Morgan’s concerns remain, the most notable of which centres on Morrison’s extensive capital expenditure programme and the execution risks implicit in a plethora of new ventures – which will not meaningfully change the investment case, as Morrison remains confined to the UK for growth.