Best of the Brokers for 15 December 2015
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INVESTEC
Following recent significant weakness in the South African rand, Numis slashed its forecasts for Investec’s financial results. Numis’ earnings per share forecast for this year has been cut 3.5 per cent while next year’s has been cut 8.5 per cent. “We have significantly reduced our expectations for economic recovery in South Africa and have also reduced our loan growth forecasts,” the analysts said. They slashed their target price 16.4 per cent to 496p, but maintained their “add” rating.
STAGECOACH
Despite solid financial results at the transport company, weakness in UK rail, UK bus, and inter-city coach operations in the UK and mainland Europe have resulted in a downgrade in full-year earnings, analysts at Panmure Gordon said. Panmure cut its target price to 330p from 370p, reflecting lower valuations for UK bus and Megabus. However, it maintained its “hold” rating.
ITV
Analysts at Liberum said ITV remains their top pick in the sub-sector. They reiterated their “Top Buy” rating and ramped up their target price to 375p from 330p. ITV is the dominant free-to-air broadcaster in a strong UK ad market, the analysts said. They added: “Another boost is the high growth of very high margin revenue streams such as online and interactive, where the earnings impact does not seem to have been appreciated by the market.”