Broker tips: Meggitt, Whitbread, Gold miners

5th Jul 2013 12:18

Deutsche Bank has cut its recommendation for aerospace and defence engineering group Meggitt from 'buy' to 'hold' ahead of its first-half results next month, saying it sees 'insufficient upside' from current prices."Reflecting the recent re-rating of defence peers and ongoing optimism around the commercial aerospace cycle, we have raised our sum-of-part derived target price from 495p to 525p. Despite this increase and the appeal we still see in Meggitt's business model and management's track record, there is now insufficient upside remaining to merit a 'buy', hence we downgrade to 'hold'."UBS has cut its recommendation for restaurant and hotel firm Whitbread from 'buy' to 'neutral' following the company's investor day, citing insufficient share price upside.UBS said that it is too early to gauge the financial impact of its new 'hub' compact-hotel concept, and its international hotel plans still need to be delivered. The broker has raised its target price from 2,900p to 3,150p, but downgraded the stock's rating, given that its valuation is at the top end of the historic range.Nomura has upgraded its ratings for gold mining peers African Barrick Gold (ABG), Polymetal and Randgold Resources, saying it sees a short-term rebound in gold prices.The broker says that gold prices have reached an equilibrium stage of $1,230 an ounce and a potential rally to $1,500 should lift gold equities in the near term. However, Nomura still remains bearish on gold prices from the fourth quarter through to 2014, estimated an equilibrium price of just $1,070 an ounce. BC