Broker tips: Sainsbury, Burberry, Domino's, Air Partner

8th Jan 2014 12:08

Panmure Gordon has maintained its 'hold' rating for Sainsbury despite the supermarket group beating consensus forecasts with its third-quarter results.The stock trades at 11.3 times earnings and offers a 4.7% dividend yield which the broker admits isn't particularly demanding. "It is our favourite of the three grocery stocks, although our caution on the short-term sector outlook as a whole holds us back from having a more positive recommendation at the moment," Panmure said.Nomura has trimmed its forecasts for High End luxury brand Burberry ahead of its trading update next week, saying that currency headwinds are likely to weigh on results in the second half. The broker maintained a 'neutral' rating and 1,630p target price for the stock.Nomura said that recent foreign exchange (FX) volatility will lead to a 4.2% headwind in the fourth quarter, mainly due to the recent strength of sterling compared with last year. If rates stay stable, this headwind will continue into next year, it said.Canaccord Genuity has lifted its recommendation for pizza delivery chain Domino's Pizza from 'sell' to 'hold' after a stronger sales performance in the fourth quarter.However, analyst Wayne Brown still voiced some concerns with the business, including the recent departure of Domino's Chief Executive Officer and Finance Director in quick succession, as well as ongoing losses in Germany. Meanwhile, he said that "an achievable rate of new openings needs to be targeted instead of 'missing' guidance".Liberum has reiterated its 'buy' recommendation on Air Partner and raised its target price to 700p for the shares, which have soared around 70% over the last year to just above 600p."Air Partner appears to have overcome cyclical and structural challenges with a return to earnings growth in the current period," the broker said in a note, predicting a recovery in earnings in future, with a dividend yield of 3.4% supporting the shares in the meantime. BC