Broker tips: Burberry, IMI, Carpetright, Airlines

7th Apr 2014 12:14

Berenberg has downgraded its rating for high end fashion brand Burberry from 'buy' to 'hold', saying that recent strength of the pound will have a negative impact on its performance.The broker said that the estimated sales and earnings growth rates over the next three years are "less compelling". It has cut its target price for the stock from 1,660p to 1,500p.Jefferies has lifted its stance on engineer IMI from 'hold' to 'buy', saying that improvements should follow the company's 'new regime'.The broker said that the stock trades in line with the UK industrials sector despite the business delivering above-average margins, having a "decent" balance sheet and "first-rate management". This sector-average valuation is expected to "unwind", Jefferies said, as it hiked its target price from 1,590p to 1,750p.Deutsche Bank has cut its recommendation for home furnishings retailer Carpetright from 'sell' to 'hold', saying that the stock is pricing in too much of a recovery.The bank highlighted that the shares are now sitting 7% above the level seen before the company's latest profit warning on March 26th and a "pricing in perfection".The impact of Easter on yields at European airlines is likely to be negative, according to analysts at UBS. "North Atlantic yield development shows negative growth in April while February, March and May is expected to come in positive," said UBS analysts Jarrod Castle and Anuj Mehrotra. "We think the timing of Easter has had an impact on April data given the impact Easter has on premium travel (less premium travel over Easter period)," they said.BC