Broker tips: easyJet, Babcock, Chemring, Cranswick

25th Nov 2013 12:06

Jefferies on Monday moved to a 'buy' recommendation (from 'hold') on the shares of low-cost carrier easyJet on the potential for further cash returns and greater confidence in the company's ability to maintain its strong competitive position. Analysts said that the shares now trade at a 35% premium to the sector average but would be at a 55% premium if their price target of 1,620p were reached. Numis Securities has downgraded its rating for Babcock from 'buy' to 'hold' after the company confirmed speculation that it is in discussions with aviation services group Avincis.Nevertheless, the broker reiterated its long-term positive view on the stock, saying that it "looks capable of maintaining a premium rating" to the sector as the business continues to deliver decent growth and good returns.Investec has upgraded its rating for defence group Chemring from 'hold' to 'buy', saying that despite potential risks the business is "back on the front foot".Investec's target price for Chemring remains 260p, based on a 10% discount to the average price-to-earnings ratio of the wider sector. "High risk but potentially significant returns available," the broker said.Panmure Gordon has reiterated its 'hold' rating for pork producer Cranswick despite a better-than-expected first-half report, saying that the stock's current valuation looks "fair"."Cranswick's shares have risen by 34% and have outperformed the wider UK market by 19% year to date. The shares are trading on 13.1 times earnings [...] for CY 2014, broadly in line with its peer group. We maintain our 'hold' recommendation and 1,140p price target."BC