Broker tips: Next, Stobart, Informa

26th Oct 2011 12:56

Next was one of the worst performing stocks on the FTSE 100 on Wednesday after Deutsche Bank downgraded the high street giant from buy to hold, saying that it expects share price upside to remain muted until after Christmas."The stock has closed its historic price-to-earnings ratio discount to both the sector and UK market (14%/ 9% respectively over the last five years) and now trades at a modest premium (of 7%/14%)," analysts said.The broker expects the firm to report weaker-than-expected third quarter sales due to the unseasonably warm weather to date. Investec has cut its target price for FTSE 250 transport logistics group Stobart but kept its buy rating on the stock, saying that despite near-term challenges, the outlook remains encouraging.The broker highlights the board's "broadly unchanged" outlook, saying that the word 'broadly' leaves some ambiguity. As such, Investec feels its prudent to lower its profit forecasts for the current year, meaning that the target price comes down from 176p to 165p."Whilst the road may not always be smooth (as evident from the market challenges that the transport division faced in H1), several key milestones have already been reached, especially in the airport unit. Investors prepared to take the medium-term view on this stock should be well rewarded, we believe, as this value is unlocked," said analyst John Lawson.Singer Capital Markets has reiterated a buy recommendation on business-to-business publisher and events organiser Informa after the group confirmed that it is "on track to meet our expectations for the full year"."The stock has edged up towards the top of its recent trading range, implying it has lagged the broader equity market improvement. With the stock trading on less than 10x and offering a premium yield (4.2%) it should move higher on the back of this statement."A 522p target price is kept.BC