Broker tips: M&S, National Grid, National Express

13th Sep 2011 12:53

Singer Capital Markets has upgraded high street giant Marks & Spencer (M&S) from fair value to buy and upped its target price from 344p to 350p following the recent share price weakness and expected growth potential."M&S has performed poorly this year, falling 25% between May and early September as the consumer outlook worsened. However, the M&S consumer has proven more resilient than most and we are now nearing the point where the investment programme will start to lift a currently dull earnings per share (EPS) trajectory," the broker said.The broker says that the stock is trading on 10 times forward earnings, which is warranted given the outlined growth potential.Following National Grid's year-to-date outperformance, UBS has cut its rating on the UK power and gas grid operator from buy to neutral but maintains its positive stance on the stock.Having outperformed the European utilities sector by over 35% in 2011 so far and reached the target price of 615p (having closed at 616p on Monday), UBS says that with no change to the underlying business, it has downgraded its rating.However, while the restructuring of the US business should provide a catalyst to the shares, the broker thinks that any announcements on this will not coming until the first half of 2012.A 615p target price is maintained.Peel Hunt has upgraded its rating for train and coach operator National Express following the purchase of the fifth largest provider of student transportation services in the US for $200m. "The acquisition of Petermann Partners is fully consistent with the group's strategy and should be earnings-accretive from the outset. The deal is a further reflection that National Express is very much on the front foot," said analyst Paul Hickman.Peel Hunt now rates National Express as a buy, from hold before, and upped its target price from 253p to 270p.BC