Broker tips: Unilever, Royal and Sun Alliance, ITV
Fears of higher commodity prices prompted ABN Amro to downgrade its recommendation on food and household goods giant Unilever to 'sell' from 'hold'.
While the maker of Hellman's mayonnaise and Knorr soup has shown exceptional resilience so far, the risk that rising commodity prices will pressure margins or volumes is increasing, the broker said.
It also downgraded Unilever's Swiss peer Nestle, to 'hold' from 'buy'.
Credit Suisse has lowered its rating on Royal and Sun Alliance to 'underperform' from 'neutral' on valuation grounds.
The broker, which keeps its 146p price target on RSA, said it had outperformed the insurance sector recently.
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The price target offers 5% upside potential, compared with a sector average of 21%, Credit Suisse noted.
Shares in ITV fell after Goldman Sachs changed its recommendation on the company to 'sell' from 'neutral', saying the market is being overly optimistic.
While forecasts for other broadcasters are falling, estimates on ITV do not fully factor in the effects of lower advertising spending in 2008.
Trends in the advertising market are likely to be mentioned at ITV's annual meeting on May 15, Goldman said.
