Broker snap: Time to pause at DS Smith, says Investec

6th Nov 2012 11:18

Investec has downgraded its rating for industrial group DS Smith from 'buy' to 'hold', saying that while its recent strong share price performance was warranted, it's time to 'pause for now'."DS Smith's pre-close trading update is very much as expected and we make no changes to forecasts. The company remains confident of delivering its full-year guidance despite the challenging end market conditions," the broker said. Including Tuesday's slight fall (down 1.77%), the stock has still gained an impressive 33.4% in the last three months, from around the 160p level to 214.8p by yesterday's close."Whilst DS Smith offers excellent EPS [earnings per share] growth and potential upside, we think after the strong run the stock has had, it is likely to pause for breath until the pre-close update during April 2013."The shares trade at 11.2 times current year (ending April 2013) earnings. The broker maintains its 225p target price.BC