Broker tips: GKN, ITE Group, Kazakhmys, Dunelm

3rd Mar 2014 13:06

UBS has downgraded its rating for aerospace, automotive and land systems engineer GKN from 'buy' to 'neutral' after cutting its forecasts due to foreign exchange headwinds.Following GKN's 2013 results released last week, UBS has cut its earnings per share forecasts for 2014 and 2015 by 10% and 13%, respectively. "Most of the downgrade is due to the sharp increase in the value of sterling versus every major currency that GKN has translation exposure to," the bank said.Canaccord Genuity has downgraded its rating for exhibitions and conferences organiser ITE Group from 'buy' to 'hold', raising concerns about profit forecasts given the recent weakness of the rouble amid increasing tensions between Russia and Ukraine.Analyst Simon Davies said: "At this stage, ITE's events in Ukraine are still taking place, and the impact will likely be more an issue for FY15. Of greater concern, however, is the potential response from the international community on Russia, where ITE generates 65% of group profits."Westhouse Securities has lifted its recommendation for Kazakhmys from 'neutral' to 'add', hailing the copper miner's restructuring plans announced alongside its better-than-expected annual results.They have raised their target price for the stock to 355p. "While this is a significant re-rating from our previous 235p target price, we think it reflects the substantial benefits to be derived from the proposed transactions," they said.Growth prospects at homeware retailer Dunelm are 'undervalued', according to Jefferies which has initiated coverage on the stock with a 'buy' rating and 1,150p target price."Consensus forecasts are for real personal disposable income to grow circa 2% in 2014 and 2015 and mortgage approvals are growing at over 30% a year. Both of these trends bode well for household goods sales generally, and particularly for Dunelm, as the UK's specialist homewares market leader," Jefferies said.BC