Broker tips: Smiths Group, Fresnillo, Debenhams

18th Sep 2013 12:10

Shares in technology firm Smiths Group were making gains on Wednesday morning as the company impressed with its annual results, with Investec providing a boost after raising its target price for the stock.Investec raised its target price for Smiths from 1,500p to 1,590p and maintained its 'buy' rating, saying that its current valuation "fails to reflect the quality of the group". "We believe that the group is fundamentally undervalued and today's statement might begin to wake up investors to the potential, even without major disposals."UBS has reduced its estimates for precious metals producer Fresnillo after the recent news about unexpected increases to mining royalties in Mexico. The target price has in turn been lowered from 1,250p to 1,150p and a 'neutral' rating has been maintained."Despite opposition from mining companies and uncertainty over the specific tax calculation, we believe it is likely that the more onerous mining royalties will be imposed," UBS said.N+1 Singer has lowered its recommendation for High Street department store Debenhams from 'buy' to 'hold', raising concerns with heightened competition and higher costs."Whilst the various strategic improvements are clear to see, sales momentum has evidently faded in H2. This, coupled with rising online costs and a new competitive threat from M&S, means we are adopting a more cautious approach to future earnings per share growth, cutting outer year numbers by 7%, and moving to 'hold'."BC