BEST OF THE BROKERS
DIAGEO
Nomura raises its price target from 1,470p to 1,520p, and kept its rating as “neutral” after the world’s biggest spirits group posted a seven per cent rise in first-half operating profits last week to £1.87bn. Nomura said top and bottom line growth was marginally better than expected and raised its target price to reflect the reduction in the firm’s ongoing tax rate, which fell from 20 to 18 per cent.
DOMINO’S PIZZA UK & IRELAND
Collins Stewart retains its “buy” recommendation with a target price of 460p ahead of Domino’s preliminary results on 15 February. The bank said Domino’s has historically delivered a c.10 per cent upgrade cycle per annum and while 2011 did not deliver this, 2012 could prove equally challenging. “Our positive stance is predicated on delivering a strategy that will drive the adequate volume growth to support upgrades,” Collins Stewart said.
NATIONAL GRID
JP Morgan downgrades National Grid to “neutral” from “outperform”, with a price of 640p and warns that shares may struggle to outperform “until there is regulatory and strategic clarity”. The bank said that while National Grid is the second best performing European utility over the last 12 months, 2012 will prove more challenging as 80 per cent of its asset base, all of its UK regulated businesses and 40 per cent of its US rate base, face regulatory reviews.