Broker tips: Dixons Carphone, JD Wetherspoon, IG Group

21st Jan 2015 11:52

Investec has lifted its target price for Dixons Carphone from 465p to 500p and retained its 'buy' recommendation for investors, saying that the update on Wednesday reflected a "Christmas cracker" for the electrical retailer."Management has indicated expectations for [the year ending April 2015] to be above consensus and moving into 2016 we see scope for the upgrade cycle to continue," Investec said.A slowdown in like-for-like sales growth at pub group JD Wetherspoon has prompted Numis Securities to cut its rating on the stock from 'add' to 'hold' and lower its forecasts, with the broker cautioning about the company's price position.Margins fell in the first half as the company continues to undercut the wider pub sector on the price of beer. Investec said: "Based on CGA data, we estimate that JDW's beer price discount to the sector has grown over the last three years, from 14.5% to 17.6%, which is unnecessarily large, in our view."UBS said that the risk-reward balance when investing in IG Group is now more even due to its high valuation and limited operating leverage, as it cut its stance on the stock from 'buy' to 'neutral'.The shares are now trading at a 17% premium on a price-to-earnings ratio basis to the wider sector. While this is lower than its long-term average multiple of 24%, UBS has chosen to take a more cautious view and has removed IG from its 'Most Preferred' list.