Broker tips: Anglo American, Vodafone, Wetherspoon, Just Eat

Anglo American rose to the top of the FTSE 100 after Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’.

It noted that a wide valuation gap has opened versus peers with the selloff in the stock led by balance sheet concerns rather than earnings.

“We think at current levels investor focus should switch to the underlying asset value,” said the bank, adding that Anglo is trading below its 2008/2009 crisis lows and at a large discount to peers.

Goldman Sachs has downgraded Vodafone to ‘neutral’ from ‘buy’ and cut the price target to 250p from 275p.

“Post recent outperformance around the announcement that it is in talks with Liberty Global about a potential asset swap, we believe risk-reward appears more binary,” said the bank.

It noted that since adding the stock to its buy list in December 2014, it’s up 5.8% versus the FTSE World Europe up 2.1%.

Canaccord has moved Wetherspoon’s rating from ‘sell’ to ‘hold’ while other analysts reiterated views after the pub owner said expected profit to fall.

Analysts at Canaccord cut their target price from 720p to 750p, and earnings per share expectations from 9% for the 2016 financial year.

“Today's pre-close trading statement reveals the usual story of industry-leading like for like sales achieved at the cost of on-going margin erosion,” the brokerage said in a note.

Canaccord said the trend is likely to accelerate with news Wetherspoon committed to 8% pay increases on starting salaries.

Goldman Sachs reinstated its ‘buy’ rating on Just Eat and added the shares to its Conviction List, with a 560p price target.

It said that in addition to rapid growth potential as more takeaway food is ordered online, network effects and platform scalability should drive strong profitability as established markets mature and losses decline in other markets.

“The business is highly cash generative, with low capital requirements and negative working capital,” said GS.

“As market leader in 12 of its 15 countries, Just Eat should benefit as online penetration increases.”