Broker tips: Morrisons, GKN, Randgold

7th May 2015 11:24

Shares in Morrisons plunged on Thursday after the grocer reported a worsening of like-for-like sales trends in the first quarter, though analysts at Shore Capital remained upbeat with a 'buy' rating.The broker admitted that the company has a long way to go in its turnaround efforts, but the new chief executive David Potts is taking the right steps to improve the business. The broker said that it is still very early in Potts' tenure "but we sense he is bringing a deep rooted and fundamental change to Morrison's that is for the better".Credit Suisse has lowered its estimates for GKN but has said that the positives still outweigh the negatives at the engineering group, keeping an 'outperform' rating."Following the Q1 trading update we make small forecast changes to reflect current FX rates, a slower than forecast start to the year at Driveline and the earlier than expected impact of the step down in the A330 build rate," the bank said. It has lowered its 2015 and 2016 earnings per share forecasts by 2% and 3%, respectively.While some people believe that growth at Randgold Resources may come to a standstill, Investec said it isn't one of them. The broker kept a 'hold' rating and 5,163p target price on the stock."On the basis of FY14A to FY17E gold production increasing by a modest 4.3% per annum on average, we expect attractive earnings growth of 17.6% per annum on average," said analyst Hunter Hillcoat. He said the a weaker-than-expected first-quarter production performance does not alter this view.