Broker tips: Smiths Group, Premier Foods, Hays

7th Oct 2011 12:42

Nomura has downgraded Smiths Group, the medical devices and airport scanner maker, from neutral to reduce, saying that the firm is "likely to grow slower than other companies in our coverage universe"."Smiths Group is a conglomerate of five businesses and its end market exposure is one of the most diversified, which normally gives the group stability. This looks now uncertain as sales are 40% to the public sector and only 15% to emerging markets."As a result, the target price is cut from 1,150p to 1,050p.Following Premier Foods' full-year profit warning on Friday - which drove its share price down 37% - Investec has placed its hold rating and 15p target price under review but warned investors to avoid the stock.In an unscheduled third quarter interim management statement, the food manufacturer revealed that since its third quarter performance has been significantly under expectations, full-year trading profits will be below market expectations."The critical question facing Premier and its shareholders this morning is whether the company can survive and whether there is any value left in the equity at all," according to analyst Martin Deboo.UBS has reiterated its buy rating on recruitment firm Hays, after its first quarter "confounded gloomy expectations".However, the target price is cut from 105p to 100p, after accounting for foreign exchange movements in the last five weeks.Nevertheless, the broker says that its underlying growth and margin assumptions are unchanged, since Hays reported strong growth in the first three months of the year, "including the key post-holiday late August and September period".BC