LONDON (ShareCast) - Deutsche Bank has lowered its rating on AstraZeneca to ‘hold’ from ‘buy’ and kept its 2,400p target price on the drugs giant, on valuation grounds.

Following AstraZeneca’s legal victory over the US patent for its schizophrenia drug Seroquel, Deutsche said it saw few catalysts to lift the company’s share price higher on the horizon.

Shares in AstraZeneca jumped Wednesday after a US court granted the company’s request for a summary judgement in the case in which AstraZeneca is suing Teva Pharmaceuticals and Sandoz for alleged patent infringement.

AstraZeneca offers defensive characteristics as well as the possibility of participating in sector consolidation, Deutsche said.

JP Morgan has raised its rating on J Sainsbury to ‘overweight’ from ‘neutral’ and on Tesco to ‘neutral’ from ‘underweight’ saying that valuations in the European food retail sector are attractive for the first time in two years.

It also lifts its price target on Tesco to 420p from 390p.

The broker said that share prices in the sector had overreacted to recent price warnings from Marks and Spencer and the French supermarket Carrefour.

M&S said Wednesday that first quarter UK like for like sales fell 5.3% and warned that tough conditions are here to stay for two years. JPM cuts its price target on the clothes and food retailer to 200p from 345p and keeps its ‘underweight’ rating.

Shares in Carrefour fell heavily late last month as it warned that competition and the weak economic outlook would hit profits.

JPM said Wm Morrison, on which it keeps its ‘overweight’ rating, but reduces its price target to 310p from 340p, remains its top pick in the sector.

“Why should the Morrison share price, for example, react in any way to Carrefour’s non-food problems or to M&S company-specific food problems?” the broker asked.

JPM said J Sainsbury is trading below the replacement costs of its physical assets. Tesco offers good earnings visibility and good management, it said.

JP Morgan has cut its target price on Shire to 882p from 1050p and kept its ‘neutral’ stance on the drug group after examining various profit and loss factors.

The broker maintains its ‘neutral’ stance on the company.

“Our new price target of £8.82 implies 9% upside potential,” JPM said.

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