- Aviva downgraded by Suisse on headwinds
- JPM raises Anglo American to overweight
- Mitchells & Butlers target price halved by Berenberg
- Smurfit Kappa target price raised on strong results
- Consensus is positive on resilient Reckitt Benckiser
- JPM goes overweight on Flutter Entertainment
Credit Suisse has downgraded Aviva [LON:AV] to ‘neutral’ (outperform), lowering the price target to 455p (500p). Brokers had already noted in the first quarter that the insurer was facing headwinds, with first quarter numbers weaker than expected. Last month, Barclays lowered its price target to 553p (620p), reiterating an ‘equal-weight’ rating, despite Aviva reporting in May an increase in general insurance sales to their best level in a decade. At close of trading yesterday, the stock was priced at 396p, a return of -27.5% YTD and -23.3% over 12 months.
JPMorgan has raised Anglo American LON:AAL to ‘overweight’ (neutral), raising its target price to 3,850p (3,650p). Last week, Anglo American reported its 1H profit fell by 33% and revenues by 17%, as the miner faced “considerable challenges” affecting production across most of its operations, from copper to platinum, nickel and iron ore, though diamond production was up 10%. Broker consensus on the stock is neutral (JP Morgan Cazenove, Deutsche and Barclays) and with only Berenberg giving it a ‘buy’ rating. At close of trading yesterday, the stock was priced at 2,790p, a return of -6.6% YTD and -14.6% over 12 months.
Berenberg has downgraded Mitchells & Butlers LON:MAB to ‘hold’ (buy), and almost halved its target price to 180p (350p). The company, which owns the All Bar One, Toby Carvery and other brands, is facing unprecedented pressure from soaring wages, utilities and food cost inflation, squeezing consumer discretionary spending and affecting margins. The company expects these “challenging conditions” for the hospitality sector to continue into next year. Deutsche Bank reiterated its ‘buy’ rating but cut its price target by some 15% to 230p (270p), while Shore Capital reiterated its ‘hold’ rating. At close of trading yesterday, the stock was priced at 177.4p, a return of -30.7% YTD and -37.7% over 12 months.
JPMorgan Chase has raised the target price for Smurfit Kappa Group [LON:SKG], the corrugated packaging group, to 3,655p (3,490p), with an ‘overweight’ rating on the stock. The company had issued a strong half-year report featuring revenue growth of 36%, earnings per share growth of 85% and an 8% increase in the interim dividend, despite surging input costs, supply chain issues, Covid disruptions and the war in Ukraine. The stock rallied on the news, and at close of trading yesterday, it was worth 2,976p, a return of -26.8% YTD and -26.6% over 12 months.
Bernstein has upgraded Reckitt Benckiser LON:RKT to ‘market-perform’ (underperform), and substantially raised its target price to 6,400p (5,300p) to reflect the resilience of the company’s performance in a challenging trading environment. The broker consensus is all positive: Barclays raised its target price to 9,500p (8,600p), with an ‘overweight’ rating; Berenberg, to 8,050p (7,375p), on a ‘buy’ rating; UBS, to 8,700p (8,400p), also on a ‘buy’ rating; and RBC, to 7,200p (7,000p), with an ‘outperform’ rating. At close of trading yesterday, after a particularly strong second quarter, the stock was priced at 6,740p, a return of 6.3% YTD and 20.0% over 12 months.
JPMorgan has reinitiated coverage of Flutter Entertainment LON:FLTR with an ‘overweight’ rating, and a target price of 12,600p. In June, Citi analysts rated the stock a ‘buy’, seeing its poor performance as a buying opportunity, in light of its exposure to the growing spend in the US market and to greater regulatory clarity on gaming in the UK. At close of trading yesterday, the stock was priced at 8,118p, a return of -30.9% YTD and -34.9% over 12 months.
