Broker tips: Tesco, Petrofac, Airlines, De Le Rue

26th Nov 2013 11:42

Deutsche Bank has cut its target price for Tesco from 405p to 386p ahead of its third-quarter trading update next week, saying that like-for-like (LFL) trends have deteriorated."We expect Q3 LfL trends to have deteriorated in most markets versus Q2, most notably in the UK, Thailand, Ireland and Korea, but this is unlikely to surprise the market given market share data in the UK and peer group and macro reports outside the UK," said analyst James Collins. Nevertheless, the bank maintained its 'buy' rating for the stock on the back of the potential upside to total shareholder returns.Credit Suisse has reiterated its 'outperform' rating for oilfield services (OFS) group Petrofac, saying that the stock has been "unfairly punished" after the cautious guidance given last week.Credit Suisse said that the stock now trades on less than 10 times 2014 earnings with 30% upside potential to its target price of 1,535p. If it rolls valuations forward to 2015, the price-to-earnings ratio would be just 7.9 and the upside would rise to 57%.JPMorgan Cazenove has maintained its 'overweight' rating for IAG, easyJet and Ryanair, saying that it sees "respectable upside potential" for all three airline stocks on its new revised price targets."Turning towards 2014, we expect to see renewed investor confidence in the low-cost carrier (LCC) business model following 2013's Ryanair-induced skepticism, as well as continued momentum at IAG given Spanish contributions and improving Heathrow competition," the bank said.Investec has upgraded its rating for banknote printer De La Rue from 'hold' to 'buy' following recent weakness in the share price with the stock offering a 5% dividend yield.The target price for the stock has been lifted from 885p to 890p, reflecting the 10-year average price-to-earnings ratio of 15.1.BC