Broker tips: BP, Hikma, Kingfisher, Berkeley Group, PZ Cussons
RBC Capital Markets downgraded BP to’ sector perform’ from ‘outperform’ and kept the price target at 500p, following the stock’s significant outperformance versus its closest peer Royal Dutch Shell.
BP
383.85p
17:15 26/09/24
FTSE 100
8,284.91
17:09 26/09/24
FTSE 250
21,010.44
16:59 26/09/24
FTSE 350
4,575.40
17:00 26/09/24
FTSE All-Share
4,531.55
17:14 26/09/24
General Retailers
4,262.86
17:00 26/09/24
Hikma Pharmaceuticals
1,877.00p
16:54 26/09/24
Kingfisher
324.90p
16:40 26/09/24
Oil & Gas Producers
7,726.22
17:00 26/09/24
Personal Goods
11,395.46
17:00 26/09/24
Pharmaceuticals & Biotechnology
22,304.02
17:00 26/09/24
PZ Cussons
94.40p
16:49 26/09/24
“We continue to see potential upside to BP's cost reduction potential, but feel the risk reward opportunity has become more balanced for now,” said RBC.
Pharmaceuticals group Hikma was a high riser on the FTSE 100 on Friday after analysts at Citigroup upgraded the stock from ‘neutral’ to ‘buy’, recommending investors “keep the faith” despite a recent drop in the shares.
The bank said Hikma’s current valuation now “provide[s] an attractive entry point in our opinion,” offering investors the prospect of sustainable long-term double-digit organic revenue growth in the branded generic and injectables markets.
Citi maintained a 2,400p target price on shares.
Morgan Stanley downgraded Kingfisher to ‘underweight’ from ‘equalweight’ but raised the price target to 310p from 300p.
It noted that since it upgraded the stock in December, Kingfisher has exited China at a price below asset value, seen its proposed acquisition of Mr Bricolage fall through and experienced significant adverse currency movements.
The bank said the company’s new strategy to create a unified business by selling the same products across Europe presented in the same way is high risk.
“Whilst we accept that this strategy could deliver very material cost savings, we think that it may negatively impact sales, potentially very significantly,” it said.
UBS has hiked its target price for Berkeley Group from 3,400p to 3,900p and reiterated a ‘buy’ rating, saying all operating metrics at the housebuilder are in “excellent shape”.
UBS said that while there are some political risks ahead such as the UK referendum on EU membership and mayoral elections in London, Berkeley should still be able to generate strong returns over the next few years.
Goldman Sachs downgraded PZ Cussons to ‘neutral’ from ‘buy’, noting that the stock has outperformed the sector by 14% in the year to date.
Since being added to Goldman’s buy list on 12 November 2013, the shares are down 5.4% versus a flat FTSE World Europe, the bank said.