Cantor Fitzgerald, Investec, UBS: Best of the Brokers for 03 December 2015
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Cantor Fitzgerald has remained a “seller” of Mothercare stock with a target price of 135p, despite the company more than doubling UK profits in the first half. It believes it will struggle to meet the lower end of management’s 2019 underlying pre-tax profit target of £55m and that to meet this, UK stores need to generate 11 per cent (£50m) more sales. It added that investors should question management over why other brands such as Mamas and Papas are growing significantly faster.
Investec has changed its rating for Dixons Carphone from “buy” to “add”, with a 510p target price ahead of the company’s first-half results next week. The broker said although no formal guidance update is expected ahead of peak trading season, the company remains well-placed to deliver double-digit earning per share growth out to 2018. The market is also starting to factor in the good news, limiting the upside, Investec added.
UBS has initiated coverage of brick manufacturer Ibstock with a “buy” rating and target price of 235p. The company, which recently floated, has benefited from a strong rebound in the UK housing market, which has led to brick capacity utilisation rising to around 95 per cent in 2014 – an effectively “sold out” position. As such, UBS expects to see significant earnings growth in 2015, mainly driven by strong pricing dynamics in the UK.