Broker tips: IAG, AstraZeneca, Berkeley

6th Aug 2012 11:25

Credit Suisse has downgraded its recommendation for British Airways and Iberia owner International Consolidated Airlines Group, otherwise known as IAG, from 'outperform' to 'neutral' on the back of risks to 2013 consensus estimates.IAG reported a second-quarter loss of €4m last week and revealed guidance of a small operating loss for the full year. As such, the broker has cut its forecast of €143m profit to a loss of €82m and reduced its 2013 earnings before interest and tax (EBIT) estimate from €695m to €319m pre-exceptionals. The target price comes down from 176p to 160p.Credit Suisse reckons that earnings momentum will remain "soft" in the short term despite the strength in trading at British Airways.UBS has reviewed its coverage for the European pharmaceuticals sector, highlighting that, for that the first time in five to seven years, the 'generics cliff' is coming out of forecasts."With the sector de-levering from binary investment cases and levering to sustainable growth, we see more room for upside," the broker said. Its European strategists are 'overweight' in the pharma sectorUBS highlights AstraZeneca and Novartis as its top picks for performance into 2013.After an 'impressive' performance by house-builder Berkeley in the year to April 30th, Investec has raised its target price for the stock from 1,500p to 1,560p and reiterated its 'buy' recommendation for the shares."Following last year's announcement of the return of £13 per share by 2021, these results were more a case of affirming the continuation of the strong trends which underpin the deliverability of this return," the broker said in a research note on Monday morning.BC