Broker tips: Barclays, M&S, 888

1st Nov 2011 12:57

After factoring in a target price upgrade, UBS has downgraded its rating for Barclays from buy to neutral, saying that the upside is now more modest."Post Q3, we have modestly upgraded our full year estimates (+2%) but subsequent years are broadly unchanged. While we exclude the pension fund deficit and value of own credit from Barclays' reported tangible book value as our basis for valuation, a higher start point here has led to a modestly higher price target (215p from 208p)," the broker said.UBS expects next year to be similar to 2011, estimating a more balanced source of earnings with Barclays Capital providing a 44% contribution to group pre-tax profit in 2012. HSBC has downgraded its rating on high street giant Marks & Spencer (M&S) from overweight to neutral ahead of the firm's interim results next week.The broker expects a slowdown to the retail chain's organic sales growth for general products in the fiscal second quarter due to unseasonably good weather.As a result, the broker lowered its earnings estimate by 3-9% for 2012 and 2013 due to the lower sales outlook and cut the price target to 360p from 450p.Evolution Securities has reiterated its buy rating on online gaming firm 888 Holdings, after the group reported strong third quarter figures on Tuesday."The best response to the lapsed Ladbrokes bid was to produce an energised trading performance and 888 has duly delivered. It has reported strong 3Q figures and we are upgrading our FY11E EBITDA estimate by 20%."The target price is lifted from 50p to 55p.BC