Broker tips: Gold miners, Sainsbury, Domino's Pizza

2nd Oct 2013 12:13

Citigroup has downgraded its ratings for UK-listed precious metal miners Randgold Resources, Fresnillo and Polyus Gold, raising concerns over current pricing and valuations.In a research report on Wednesday, the US bank said: "We are bearish on gold and silver shares for two reasons: firstly, we are bearish on the metals; secondly, we note that equity valuations contracted sharply after the last big mega market in the '70s and we do not think that valuations have completed enough of that post-peak phase yet in the current bear market."Jefferies said that Sainsbury has delivered "another solid quarter" as expected but still maintained its 'hold' recommendation for the supermarket stock.The broker maintained its 385p target price, equal to the stock trading at 12 times calendar-2014 earnings, which it said is "fair" given the limited scope for forecast changes on the back of Wednesday's trading update. Sainsbury's like-for-like (LFL) sales increased by 2% in the second quarter, the company said, ahead of Jefferies' forecast for a 1.9% rise. Shares in Domino's Pizza were making gains on Wednesday after the company impressed the market with a third-quarter update; however Canaccord Genuity said the results raise even more concerns and cut its target price from 500p to 480p.Analyst Wayne Brown highlighted that the company is reducing its UK store openings target by 17% for 2013, with just 23 new units having been opened so far this year. "In a retail market where new site opportunities should be benefiting the group, and every other retail/leisure company is increasing openings, we are increasingly concerned why DOM is missing its opening targets again," he said.BC