Broker tips: Synergy Health, Informa, N Brown

10th Oct 2013 11:35

Synergy Health remains a 'sell', according to Canaccord Geunity, with risks to consensus forecasts on the downside.Analyst Julie Simmonds said: "Following a difficult Q1, it is clear that Synergy has not yet seen an improvement in performance. We see lower organic revenue growth as an ongoing challenge to Synergy, which expansion into the US is expected to address. However, finalising new contracts in the US market appears to be taking longer than expected and we think weakness in the share price is likely to continue until it begins to generate some traction in this region."The share price of business and events group Informa slipped on Thursday after the resignation of Finance Director Adam Walker, something which Panmure Gordon believes could ignite bid speculation. The broker maintained its 'buy' rating and 630p target price for the FTSE 250 stock, pointing out that Walker's "follows hot on the heels of news of Peter Rigby's [Chief Executive] retirement"."In our view, the market should now discount an increased probability of break-up at Informa over the next year or so. Rigby and Walker, to a lesser extent, were the architects of the current group conglomerate structure/strategy. Rational break-up values should yield valuations over 600p, in our view. There is no suggestion that either of these departures is trading-related."Citigroup has retained its 'neutral' rating and 488p target price for online and catalogue retailer N Brown following its interim results, choosing to sit on the fence with the stock trading at 14 times earnings.The US bank said that strong top line growth at N Brown is being predominantly driven by Home & Leisure sales with little sign of improvement in the core Womenswear category. Meanwhile, operational leverage is being held back by higher bad debt charges from aggressive customer recruitment. This, as well as ongoing investment, is offsetting any near-term benefits, resulting in a "muted" earnings per share compound annual growth rate of just 3% over 2013-2016.BC