Broker Tips: Glencore, GSK, BP, JD Wetherspoon

• UBS upgrades Glencore to ‘Buy’
• Deutsche Bank upgrades GSK to ‘Buy’
• Numis adds target price for JD Wetherspoon
• RBC Capital Markets raises Rentokil Initial target price
• Morgan Stanley upgrades BP to ‘Overweight’

UBS upgrades Glencore to ‘Buy’

UBS has upgraded Glencore LON:GLEN to ‘Buy’ (Neutral) as the recent sell-off brings the share price down to more attractive levels. The FTSE 100 mining company is underperforming its peers, Rio Tinto LON:RIO and BHP [LON:BHP] and UBS pointed to a weaker thermal coal price as a contributing factor but noted “We believe the risk/reward is again attractive and concerns of further softening in thermal coal/curtailing of cobalt production are priced in”. The broker continues to be cautious overall on the mining sector but is “encouraged by recent China data which is somewhat stronger than expected”. The price target has remained unchanged at 560p.

At the time of writing, Glencore shares were trading at 446.35p, down 18% for the year to date and -11% over the last 12 months.

Deutsche Bank upgrades GSK to ‘Buy’

Deutsche Bank has upgraded GSK LON:GSK to ‘Buy’ (Hold) and increased its target price to 1,700p (1,500p) based on a review of its estimates. The biopharma giant sees its HIV products contribute over 20% of sales and the broker notes that “GSK is too cheap if there is any semblance of sustainability through FY27/28, something we now think is probable courtesy of long acting injectables in HIV and RSV, with potential upside from bepirovirsen in HepB,”

The share price was trading at 1,425.60p, down 1.75% for the year to date and -13% over the last 12 months.

Numis adds target price for JD Wetherspoon

Numis has added a target price of 475p for JD Wetherspoon LON:JDW with its half year results set to be announced this Friday (24th March). The pub chain has had a rough ride over the last few years as Covid-19 and lockdowns have impacted earnings but Wetherspoon’s has seen recent numbers getting closer to pre-Covid levels. The issue faced by the Hospitality sector right now is the rising cost of energy and raw materials and if the group is able to ride the current inflationary environment successfully, there could be brighter times ahead.

Shares were trading at 598p, up 32% for the year to date and -28% over the last 12 months.

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RBC Capital Markets raises Rentokil Initial target price

RBC Capital Markets has raised its target price for Rentokil Initial LON:RTO to 670p from 645p and reiterated its ‘Outperform’ rating. The FTSE-100 pest control business released its final results last week showing strong organic revenue growth and margin expansion and highlighting excellent early progress on the integration of its Terminix acquisition whilst raising its cost synergy guidance.

Shares were trading at 554.8p, up 6.45% for the year to date and 8.6% over the last 12 months.

Morgan Stanley upgrades BP to ‘Overweight’

Morgan Stanley has upgraded BP LON:BP. to ‘Overweight’ from ‘Equal weight’ and reduced its target price to 605p from 660p. The FTSE-100 oil and gas company has seen a strong share price performance since November 2020 and highlighted record annual profits, a further $2.75bn share buyback and re-evaluation of its carbon emissions target in its trading update earlier this month.

Shares were trading at 500.52p at the time of writing, up 3.5% for the year to date and +34.8% over the last 12 months.