Broker tips: Dunelm, National Express, AstraZeneca

29th Mar 2011 12:39

UBS upgrades Dunelm to a 'buy', from 'neutral', saying that the homeware retailer's store growth is undervalued. The group has the fastest store growth forecast in the sector, with high single digit space growth per annum forecast for the medium term, according to the broker. "Dunelm is already a popular destination store for homewares, and recent product and services developments have enhanced its competitive position in our view," the broker said. The target price of 500p is retained.Charles Stanley Securities downgrades rail and bus operator National Express to a 'reduce' rating, from 'hold', following the loss of the Greater Anglia franchise. The broker earnings forecasts had assumed Greater Anglia's retention throughout the full year 2012, but the franchise will now "drop out of the picture early in that year", causing fiscal year 2012 earnings forecasts to drop by 10%. Charles Stanley cuts the target price from 230p to 200p.RBS cuts the target price for pharmaceutical giant AstraZeneca after increasing concerns ahead of the US Food and Drug Association's decision on its new blood-thinning drug Brilinta. Additionally, since the group's full-year results, RBS says it has seen other news that leads it to lower the assumed long-term (post 2017) growth rate in cash flows from -1.5% to -2.5%. A 'hold' is maintained, but the target price is cut to 3,175p, from 3,250p.BC