logo-loader

Brokers: Mixed day for the retailers

Last updated: 22:49 07 Dec 2015 AEDT, First published: 20:49 07 Dec 2015 AEDT

1-dw_828

It was a mixed day for retailers, with Nomura upping the target price of Dixons Carphone (LON:DC.) and Dunelm Group (LON:DNLM).

The broker has a ‘neutral’ rating on both, but upped its target price on the shares to 495p from 450p and 950p from 890p respectively.

Nomura said cost cutting savings at Dixons were behind its upgrade, which could have further upside from its services, though it was not enough to warrant a move higher than ‘neutral’.

It was less keen on B&Q owner Kingfisher (LON:KGF) which was lowered to a ‘reduce’ rating from ‘neutral’.

The broker said this was to “account for the possibility of no cash return in 2016, higher capex, limited reduction in development market losses and additional central costs.”

Nomura adds it likes the firm’s strategic plan, but that it may be expensive to execute, while noting that the recovery in Europe remains key.

Also getting the axe was Next (LON:NXT), as the broker said it prefers Marks & Spencer (LON:MKS), which it believes is better positioned with its food division as well as general merchandise.

Away from Nomura, Jefferies has cooled on pharma giant AstraZeneca (LON:AZN), though it retains its ‘Buy’ recommendation.

The broker has reduced its target price to 5,300p from 5,600p.

Also being cut was B&M European Value Retail (LON:BME), though this time it was by RBC Capital.

The company was dropped to ‘underperform’ from ‘outperform’ as the broker said a “lack of earnings momentum” and “cost headwinds” next year are risks to its high rate of expansion.

Credit Suisse has kept its rating on Kurdistan–focused oil group Genel Energy (LON:GENL) at outperform even though its price target is trimmed to 430p from 465p.

Production estimates have been powered due to slower ramp-ups than expected at the Taq Taq and Tawke field. Receivables also remain elevated and given the KRG's financial difficulties it is not certain how fast or whether these dues will be paid back in a timely manner.

Peel Hunt has upgraded its view to 888 (LON:888) to ‘add’ from ‘hold’ after the upbeat trading statement today. While the broker has concerns over the shareholder structure in an industry with significant M&A activity, the quality of IP, high quality management and the dividend potential offsets this.

In the small cap space, finnCap noted that Independent Oil & Gas (LON:IOG) has secured funding from its partners to drill the Skipper well in late January or early February.

The broker said it was “very good news” for IOG, and put a target price on the stock of 57p, more than 10 times higher than the current price of 5.6p.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

4 hours, 22 minutes ago