- Goldman Sachs downgrades Entain to ‘Sell’
- JPMorgan Cazenove raises target price for BAE Systems
- HSBC lowers target price for Burberry
Goldman Sachs downgrades Entain to ‘Sell’
Goldman Sachs has downgraded Entain LON:ENT, the owner of Ladbrokes, to a ‘Sell’, shifting from its previous ‘Buy’ rating. The bank has also reduced its target price to 820p from 1,450p. The downgrade was attributed to disappointing online growth, BetMGM (joint venture) losing market share in the US, and a larger-than-expected settlement in Turkey. Despite the downgrade, 13 out of 20 analysts maintain a ‘Buy’ rating for the stock, with a median target price of 1,613p according to LSEG data. Last week, Entain agreed to pay a GBP585m (USD728.97m) penalty under a deferred prosecution agreement with the UK’s Crown Prosecution Service, concerning alleged bribery offences at the company’s former Turkish unit.
Entain shares were trading at 834.4p at the time of writing, down 38% this year and down 40% over the last 12 months.
- Three Quick Facts: AstraZeneca, Marks Electrical, BAE Systems
- Three Quick Facts: Entain, Rentokil, Ibstock
- Short of the Week: Burberry
JPMorgan Cazenove raises target price for BAE Systems
JPMorgan Cazenove has raised its target price for BAE Systems to 1,300p from 1,150p and reiterated its ‘Overweight’ rating, after hosting the company’s chief executive and chief financial officer at its .
The bank is “incrementally positive” on BAE’s investment case following its UK Leaders Conference noting: “BAE faces a decade of growth and visibility [,..] It has strong free cash flow, which should mean it continues to pay an attractive dividend and buy back stock every year (which we assume in our forecast through to 2027).”
BAE’s five-year rolling business plan sees 5% to 7% organic sales growth for the next five years with CEO, Charles Woodburn, expecting: “similar growth in the following five years driven by the two major wins of the last 12 months: the GCAP fighter jet (UK/Italy/Japan) and AUKUS submarine (Australia/UK/US).”
BAE Systems shares were trading at 1,050p today, up 21% this year and up 29% over the last 12 months.
HSBC lowers target price for Burberry
HSBC has lowered its target price for Burberry LON:BRBY to 1,750p from 2,200p. and reiterated its ‘Hold’ rating. HSBC noted that Burberry’s repositioning efforts are underway, with new designer products set to hit shelves in September 2023. However, HSBC expressed concerns about the pricing strategy of the new collection, which will be 20% higher and raised doubts about the effectiveness of the turnaround due to a general slowdown in the luxury market and consumers’ growing preference for well-established brands, noting: “Even if management maintained its long-term target, the profit warning for FY23/24 announced in November is not reassuring,”
Burberry shares were trading at 1,461.32 at yesterday’s close, down 29% this year and down 31.7% over the last 12 months.
