BEST OF THE BROKERS
Difficult trading across all business areas at Wolseley led Citigroup analysts to cut their earnings forecasts for 2009 by £67m to £293m and for 2010 from £387m to £293m. This has also led to a 26 per cent drop in estimated earnings per share for 2010. The broker has a “hold” rating on the stock, noting that the group continues to work hard at cutting costs, and has a target price of 1,040p (cut from 1,042p).
Goldman Sachs downgraded Halfords to “sell” and added it to its “conviction list”, believing that the shares are “priced to perfection” and that, despite the limited downside to the broker’s target price of 312p, Halfords is set to underperform peers. Goldman says the group has less potential to improve earnings in a recovering economic environment and a limited upside to mid-cycle multiple valuations.
JP Morgan updated its estimates to reflect revised currency assumptions, a slightly better volume outlook in full year 2010, slightly less of a fall in marketing to sales rations and lower associate income. The broker’s new price target is 875p, up from 860p, and it has a “neutral” recommendation on the stock. JPM now expects organic earnings growth of 4.2 per cent in 2009 and 1.9 per cent in 2010.A