Broker tips: IAG, African Barrick Gold, Foxtons, Fenner

11th Mar 2014 12:26

Jefferies has hiked its target price for airline group IAG and retained its 'buy' rating, saying that the company 'continues to make encouraging, simultaneous progress' at British Airways, Iberia and Vueling.The target price for the stock has been raised from 410p to 510p, which is based on IAG trading on a 10% premium to the sector average, "justified by broad-based, ongoing restructuring progress". The stock currently trades in line with the average, Jefferies said.Goldman Sachs believes that the sale of African Barrick Gold (ABG) shares by its parent company Barrick Gold could act as an overhang for the stock going forward and reduce the M&A upside currently built into the price. Barrick sold a 10% stake, lowering its holding to 63.9%."We believe some investors took the view that a with-premium offer for Barrick's entire 73% holding could be coming, which would automatically trigger a bid for the free-float on ABG due to London takeover panel rules."Credit Suisse has lifted its target price for London-focused estate agency chain Foxtons from 322p to 430p after upgrading its forecasts following the company's "impressive" fourth quarter. The bank maintained its 'outperform' rating on the stock."Foxtons is a structural growth story owing to its branch expansion program (another seven targeted for this year). We do not expect the London housing market to normalise within five years, owing to current high house price-to-income ratios."Investec has lowered its target price for Fenner from 380p to 375p and maintained a 'sell' recommendation, saying that the company took a "cautious" tone in its second-quarter update."We consider that the valuation is still too rich for a low-teens margin business with rising net debt and a recent history of downgrades, and a 5p cut to our [...] target price does not change our 'sell' stance."BC