LONDON (ShareCast) - Goldman Sachs has lowered its rating on Northern Foods to ‘neutral’ from ‘buy’, saying that the Goodfellas pizza maker could suffer in coming months if commodity prices stay high.

The broker also cuts its target price on the company to 85p from 109p.

It said it will remain cautious on the company until visibility and cost inflation improve across the food sector.

Goldman also reduced its target price on the Utterly Butterly maker Dairy Crest to 420p from 430p and retained its 125p price target on the Hovis bread maker Premier Foods.

It has ‘neutral’ ratings on both stocks.

The FTSE 100’s sole housebuilder Persimmon was its worst-performing stock Tuesday morning after Goldman Sachs lowered its stance on the company to ‘sell’ from ‘neutral’.

The broker said the firm will be unable to escape the effects of a housing downturn and land writedowns despite its discliplined management and high quality land holdings.

Goldman also lowered its rating on FTSE 250 peer Redrow to ‘sell’ from ‘neutral’, saying the company is unlikely to fare well in the current environment. It added that it expects the company’s July 3 second-half trading update to support its gloomy outlook.

However, the broker is less pessimistic on fellow mid-cap Bellway, which it upgrades to ‘neutral’ from ‘sell’, saying the company has much less downside potential than its peers.

It cuts its target price on Bellway to 500.2p from 594.1p.

Persimmon, Redrow and Bellway have all seen their values fall by more than half in the past year.

Morgan Stanley has started coverage on the India-focused miner Vedanta with an ‘overweight’ rating and a 3,500p price target.

Among the reasons given for buying shares in the miner were the company’s diverse portfolio, its record of delivering projects in India and its growth prospects.

Over the past five years Vedanta has moved from being zinc-focused to having one of the most balanced portfolios in the sector, Morgan noted, adding that it also benefits from being the preferred local partner for miners looking to set up in India.

Vedanta has received extensive broker coverage recently, with JP Morgan raising its price target on the firm to 3,170p from 2,737p but Merrill Lynch downgrading it to ‘neutral’ from ‘buy’ on concerns over the copper price outlook.

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