Broker tips: Carphone Warehouse, Enterprise Inns, housebuilders
JP Morgan has lowered its rating on Carphone Warehouse to 'neutral' from 'overweight' following a recovery in the mobile phone retailer's share price recently.
JPM said that a fall in Carphone's share price in April had been overdone, as negative debt news masked a decent outlook for the company. However, it noted that the company has recovered 30% in the past three weeks and says it now sees limited scope for further rises over the next three to six months.
It retains its 380p price target on the company.
ABN Amro has lowered its recommendation on the housebuilder Barratt to 'sell' from 'hold' as part of a sector review that sees house prices falling 15% over the next two years.
Share prices in the sector have not yet fallen to a level that takes this price deflation into account, the broker said.
It also keeps its 'sell' recommendation on Persimmon.
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However, citing a 34% share price decline over the past year, it upgrades Taylor Wimpey to 'hold' from 'sell'.
Morgan Stanley has lowered its recommendation on Enterprise Inns to 'equal-weight' from 'overweight' following the surge in the pub group's share price as it moved closer to REIT status yesterday.
Shares in Enterprise Inns soared by nearly a third yesterday after it confirmed it is eligible to convert to a low tax real estate investment trust (REIT) if an internal restructuring of the group is undertaken.
Morgan Stanley said its previous stance on Enterprise, which owns tenanted pubs, had been solely based on a successful REIT conversion, which now seemed to be priced into the stock.
The broker keeps its 640p price target on Enterprise.
