Broker tips: Mondi, AB Foods, Centrica, Taylor Wimpey

10th Mar 2014 12:05

Citigroup has upgraded its rating for Mondi from 'neutral' to 'buy' and raised the target price from 1,110p to 1,260p, saying it sees "another strong year ahead" for the paper and packaging group."Mondi continues to deliver strong earnings driven by improvements in costs, acquisitions and volume growth. 2013 [results] showed again why Mondi's impressive share price performance over the past five years has been justified," Citi said.UBS has hiked its target price for food and retail company Associated British Foods from 2,890p to 3,300p and reiterated its 'buy' stance, saying that the Primark business is "still at an early chapter"."We believe AB Foods should trade on a higher multiple because of the structural growth story at Primark," said Analyst Alan Erskine. "Whilst the share price might pause for breath after such a strong run, we see further upside on a 12-month view," he said.Credit Suisse has raised its recommendation for British Gas owner Centrica from 'underperform' to 'neutral' after the stock's recent underperformance."Centrica has been the worst performing utility across the past six months, falling circa 18% versus the pan-euro sector up 22%. Our 2014 earnings per share estimates have fallen circa 16% since the November profit warning. We think the risks are now reflected in the share price, and forecast an end to negative momentum."Numis Securities has downgraded house builder Taylor Wimpey from 'add' to 'hold' but has lifted its estimates after the company's 2013 results and cash return revealed last month."In our view [the cash return potential for 2016] makes the shares look attractive relative to the other housebuilders engaging in cash returns, but on our preferred valuation metric the shares look broadly fair value. On this basis we increase our target price to 130p but move to a 'hold' rating."BC