Broker tips: Tesco, Wood Group, Tate & Lyle

30th May 2013 10:55

JPMorgan Cazenove has downgraded its rating for supermarket giant Tesco from 'overweight' to 'neutral' and slashed its target price from 425p to 390p, saying that sector fundamentals are weighing on the investment case.The broker said that the basis for its move was to be "more consistent with our cautious view on the UK food retail market as a whole, of which Tesco represents 30%". Shares in Wood Group were performing well on Thursday morning after Morgan Stanley upgraded its rating on the stock from 'equal weight' to 'overweight' despite taking a more cautious view on capex growth across the wider oil services sector."We see Wood Group as well positioned, given its asset light engineering business model, which we expect to continue delivering above cost of capital returns in the mid-teens out to 2015."Canaccord Genuity has reiterated its 'buy' rating and 900p target price for food ingredients and sweeteners group Tate & Lyle after the company's forecast-beating results and year-to-date underperformance.While consensus estimates for the current year are likely to be trimmed - due to a higher tax charge and interest costs, US bulk sweeteners weakness and lower isoglucose margins in Europe - the broker said that the outlook is "reassuring" expects the stock to be resilient at current valuations.