Broker tips: Admiral, Homeserve, Greene King

2nd Dec 2011 11:32

Investec has maintained its sell rating on car insurer Admiral, saying the stock is "going like a freight train...downhill"."It is not clear whether the claims shocks described in the 9M IMS will be a one-off. This note illustrates what could happen with a significant reserve increase next year. If an event like this did occur, the 10% dividend growth we currently forecast would be void," said analyst Kevin Ryan.The target price is slashed from 843p to 570p.Homeserve's shares nudged higher on Friday after the proposed acquisition of Doméo SA, but brokers have maintained their sell ratings on the stock as sentiment is still being dampened by problems arising from the mis-selling scandal."The share price has settled down and stabilised after the recent H1 results and UK telesales issues. While this is a sensible strategic deal, we remain concerned about the reputational impact to the group through what has happened in the UK," Panmure Gordon said. The broker maintained its 190p target price.Peel Hunt raised its target price from 200p to 220p following the deal, saying that it looks like it will boost 2012 and 2013 pre-tax profits by 4% and 9%, respectively. However, the broker said that its concerns over the UK business (and the risk to estimates) still remain and reiterated its sell rating.Charles Stanley downgraded its rating for Greene King yesterday despite the firm's interim results matching market expectations.Furthermore, the Old Speckled Hen brewer and pub chain has seen a confident start to the second half and Christmas bookings are 12% ahead of last year. Charles Stanley thinks this is down to consumers opting for "better value festive experiences".However, analyst James Dawson has cut its recommendation for the firm saying "whilst there is clearly further upside to this business from here we favour the higher yielding alternative of Marston's."BC