Broker tips: AB Foods, Reckitt, Invensys

17th Jun 2013 11:21

Nomura has downgraded its rating for food ingredients and retail group Associated British Foods from 'neutral' to 'reduce', saying that the stock is too expensive now that the profit boom for Sugar and Primark over the past two years is no longer supported.The broker cut its target price for the stock from 1,800p to 1,650p following the reduction in earnings forecasts on the back of a more volatile outlook for profitability, especially in Sugar.Shares in consumer products giant Reckitt Benckiser were making gains on Monday morning after Citigroup reiterated its 'buy' rating and 5,450p target price, saying that the stock is undervalued."We are buyers of Reckitt for the recovery of its core business and for its potential in Consumer Health. However, we also think Reckitt Benckiser Pharmaceuticals (RBP) is undervalued by the market, particularly in light of its early resilience to the recent entry of generic competition in the US Suboxone market."Technology group Invensys saw its share price jump on Monday morning after Canaccord Genuity mulled the potential of a takeover by foreign investors.Nevertheless, the broker initiated coverage of Invensys with a 'hold' rating and 420p target price, saying that the stock trades at a 10% premium to he sector after a strong performance so far this year.