Broker tips: SABMiller, Halfords, Tate and Lyle
JP Morgan has trimmed its 12-month price target on SABMiller to1,525p from 1,580p, ahead of the brewer's fourth quarter trading statement on April 16.
In a note entitled, 'Short term pain ... long term gain,' the broker, which maintained its 'overweight' rating on SABMiller, said it foresaw slow volume growth over the quarter.
"We see very limited volume growth in Europe (2.2%) and Latin America (0.9%) and a 10% decline in beer volumes in S Africa," JPM said.
However, it said that China could prove a big swing factor in volume growth, possibly lifting it to 4% from JPM's expectations of 2.8%.
The broker said it expects margins to fall again in South Africa and Europe in 2009, but added that this should be followed by a recovery in 2010 as the company reaps the rewards of the Miller-Coors merger agreed last October.
The merger was approved by EU regulators yesterday.
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"We think long term investors will be rewarded for buying into any dips on the fourth quarter 2008 statement and full-year results," JPM said.
HSBC has raised its price target on Halfords Group to 380p from 350p, after the car parts and bicycle retailer's trading statement last week confirmed that full-year pretax profits are in line with expectations.
Maintaining its 'overweight' rating on Halfords, the broker added that the outlook was also positive for 2009.
Credit Suisse has downgraded Tate and Lyle to 'neutral' from 'outperform' after the sugar and sweetener giant hit the broker's 520p price target.
Tate's share price has risen by 30% since it hit lows after three profit warnings, Credit Suisse said, compared with a 10% rise overall in the market.
Credit Suisse updated its forecasts to take into account currency issues and recent trading comments, but only fine tuned estimates as a result, the broker said.
