Burberry, Mitie, Bovis Homes: Best of the Brokers for 25 November 2015

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Nomura has downgraded Burberry from “buy” to “neutral” and reduced its target price from 1,700p to 1,500p in a detailed note on the firm’s outlook. It said Burberry’s expectations of returning to mid-single-digit growth in the sec­ond half look ambitious given the weak performance in the US and Asia. Nomura warned that the risk of not achieving these targets may see a downside risk to consensus expectations.

 

Mitie’s interim results were weaker than expected due to its loss-making healthcare division. However, Liberum has decided to keep its headline earnings estimates unchanged, provided that the trading improves in the second half.  The broker kept its “hold” recommendation and upped its target price from 286p to 300p, saying the group’s focus on its core facilities management business was “encouraging”.

 

Deutsche Bank has described Bovis’ latest trading update as a “cold shower” against a tide of positive results in the sector. However, it has reiterated “buy” and kept its target price of 1,323p, saying the stock remained too cheap relative to its peers. Bovis warned last week that full-year profits were likely to be hit by planning delays, and the bank has reduced its forecasts by six per cent as a result.