Broker tips: Acacia Mining, Restaurant Group, Experian

Jefferies slashed its target price on Acacia Mining by 41% to 265p after a Tanzanian presidential committee accused the miner of under-reporting gold contained in 277 containers for export.

Acacia said the containers, which had been held at the Dar es Salaam port since March, carried around six weeks of concentrate production from Acacia's Bulyanhulu and Buzwagi mines, with roughly 30,000 oz of gold, but the government audit claimed this figure was more than 10 times greater.

The tenfold under-reporting was immediately refuted by Acacia and Jefferies felt the level was "a degree that is difficult to reconcile", akin to other analysts covering the stock, being higher than Bulyanhulu and Buzwagi's entire 2016 estimated concentrate production.

JPMorgan Cazenove upgraded Restaurant Group to 'overweight' from 'neutral' and lifted the price target to 380p from 340p following the company's first-quarter update on Friday, as it now sees upside to the share price.

The shares have lost 17% since 10 March and the stock is now trading at 6.7x FY2018 EV/EBITDA, which appears too cheap, JPM said.

It said the group "has had a better start to 2017 than many in the market may have expected". Like-for-like sales in the first 20 weeks were down 1.8%, but this is a better run-rate than the 4% drop in LFLs the bank had expected and continues to expect for 2017 as a whole.

JPM said sales were supported by three tailwinds so far this year: strong growth in UK passenger numbers which has boosted the performance of the concessions business; good weather, especially in April and late May, which has supported the pubs business; and strong cinema admissions, which have helped the leisure business.

However, JPM does not expect these tailwinds to continue and reckons the full effect of the company's investment in pricing will only be felt in the second half of the year.

Credit checking agency Experian was under the cosh on Friday as Deutsche Bank downgraded the stock to 'sell' from 'hold' and cut the price target to 1,460p from 1,560p.

It said that while the company delivered solid full-year results, there is increasing risk to the US credit services outlook from slower employment growth and a lower rate of growth in this division will leave Experian with much less room for manoeuvre on its investment programme.

"We believe the current valuation does not factor in likely slowing US employment growth, consumer deleveraging and structural pressure on the consumer services divisional margin."

DB noted that Experian trades at an all-time high forward 12-month price-to-earnings multiple despite a worsening outlook for top line growth and margin. It added that

"Operational gearing in this business has allowed them to invest for growth. The current P/E does not reflect this growth risk. At the same time we believe the margin in Consumer Services will come under pressure from competition, a reversal of the marketing budget cuts in 17e and the transition away from a subscription business model."