Broker tips: Standard Life, Hargreaves Lansdown, Wm Morrison, Balfour Beatty, Supergroup
Abrdn
155.20p
16:40 03/05/24
Balfour Beatty
374.60p
16:40 03/05/24
Construction & Materials
10,131.33
16:54 03/05/24
Financial Services
14,418.79
16:54 03/05/24
Food & Drug Retailers
4,013.60
16:54 03/05/24
FTSE 100
8,213.49
16:59 03/05/24
FTSE 250
20,164.54
17:00 03/05/24
FTSE 350
4,515.50
16:54 03/05/24
FTSE All-Share
4,469.09
17:14 03/05/24
Hargreaves Lansdown
812.00p
16:45 03/05/24
Life Insurance
5,897.35
16:54 03/05/24
Morrison (Wm) Supermarkets
286.40p
16:55 26/10/21
Personal Goods
16,402.06
16:54 03/05/24
Superdry
7.11p
16:35 03/05/24
Standard Life (SL) shares should "re-rate upwards" after the £2.2bn sale of its Canadian operations Manulife Financial, according to Deutsche Bank. The bank kept a 'buy' rating for the insurance stock and lifted its target price by 6% from 428p to 455p.
"In addition to the high price achieved, we see the deal as strongly positive for SL, marking an exit from a slow growing, capital-intensive, spread-based business and leaving the group more focused on fee-based revenues."
Liberum reiterated its 'sell' recommendation on savings and investment group Hargreaves Lansdown after weighing up the "extreme" pressure on profit margin that was revealed in the company's results on Wednesday.
Analyst Justin Bates sees some upside risk from the launch of new cash products or obtaining a banking license, although the latter is at least 18 months away, but said the valuation was "too rich" and took a dim view of growth prospects.
Santander has downgraded Wm Morrison from 'hold' to 'underweight', saying that the supermarket chain is facing a "dividend dilemma". Santander slashed its target price for the stock from 220p to 170p.
"We do not see the progressive dividend policy as sustainable, despite the chief financial officer's commitment in March to a 5% dividend increase in 2014/15. We think the increasing competition in the UK, particularly with the prospect of a resurgent Tesco and the continuing pressure on margins means that the Morrison dividend (currently yielding almost 8% if the 5% promised increase materialises) is unsustainable, in our opinion."
The market reacted positively to Balfour Beatty's £0.8m sale of Parsons Brinckerhoff (PB) on Thursday, but broker Westhouse Securities wasn't convinced, keeping a 'sell' rating on the stock.
Westhouse said that, including all costs and cash retained in the business, the price was slightly lower than recently speculated in the media. "Earnings - and probably the dividend in our view - are likely to fall substantially since PB was the biggest contributor to underlying earnings."
Investec has repeated its 'buy' recommendation for Supergroup, saying that better-than-expected first-quarter results from the fashion retailer should "reassure" investors.
"We continue to believe the valuation does not reflect the brand's longer-term growth potential in the UK and internationally," the broker said.
BC