Broker tips: Kingfisher, Drax, Galliford Try

2nd Jun 2011 11:30

Prime Markets has confirmed a 'sell' recommendation and target price of 248p for B&Q owner Kingfisher, saying that the shares have climbed "too far too quickly" over the last couple of months."Whilst we have got off to a good start, it remains our view that this year is likely to be a tough one for all retailers, especially in the UK," said Kingfisher's chief executive officer (CEO) Ian Cheshire.Prime Markets' head of dealing Richard Curr notes that there is "a real risk of a trading tail-off toward the end of the summer. The broker said it remains a seller at least until trading results later in the year can sustain a currently-high valuation.Matrix has upped its target price for coal-fired power station operator Drax from 460p to 550p, saying that now is the time to focus on its biomass potential with UK policy becoming clearer in the next few months.The broker notes that both the ROC banding review consultation and the EMR White Paper will be published this summer, and "should give investors a clear steer to potential returns in biomass," said analyst Adam Forsyth.A 'buy' rating is kept.Peel Hunt has nudged up nearly all of its forecasts for housebuilder and construction firm Galliford Try, saying that the company presents an "interesting proposition: high growth, high yield and no debt.""The company has been dogged by doubts on delivery in housing and fears of a slump in construction - these can now be put to bed," said analyst Robin Hardy.The broker said that Galliford remains the cheapest housing-related stock and offers a higher rate of growth than its peers. A 'buy' rating is confirmed, while the target price is raised to 596p, from 510p.---BC