Broker tips: Gold miners, Centrica, Ladbrokes

15th Apr 2013 11:00

Citigroup has joined the growing list of brokers to cut their target prices for gold over the next few years.With declining margins at gold producers now a concern - as higher costs (and sustained capital expenditure) and lower prices take their toll - Citi has downgraded its rating for London-listed producers Polymetal and Petropavlovsk from 'neutral' to 'sell'. It now has seven 'sell' ratings across the UK precious metals sector.Deutsche Bank has maintained its 'hold' rating and 340p target price for utilities group Centrica after the company announced the acquisition of oil and gas assets in Canada."Centrica says the deal should be earnings enhancing from its first full year, but the company must be careful not to be seen as primarily an upstream oil and gas company, since it is currently enjoying the kind of price-to-earnings multiples seen by low-risk, bond-like utilities," Deutsche Bank said."Furthermore, we believe that the company should remain wary of political risks around its UK energy retail customer base. We do not expect UK politicians to give the group much credit for taking capital to invest in Canadian gas, rather than new UK nuclear or renewables generation."Canaccord Genuity has cut its target price for High Street betting group Ladbrokes from 255p to 235p after a gloomy first-quarter trading update pointed to full-year operating profits at the low end of market expectations.However, the broker has maintained its 'buy' rating for the stock, saying that the shares are trading at 12.4 times earnings on the broker's downgraded numbers, a 19% discount to sector peer William Hill.BC