Broker tips: Wm. Morrison, Debenhams, Genus

4th Jun 2009 13:16

Supermarket chain Wm. Morrison's first quarter trading update was ahead of market expectations, prompting Charles Stanley to upgrade its rating on the stock.The broker now advises clients to accumulate the shares, having previously rated the shares as a 'hold'.Charles Stanley has bumped up its earnings forecasts for 2009/10 by 1.5%, with earnings per share (EPS) expected to hit 18p. The EPS estimate for 2010/11 has been lifted by 3.5% to 21p.Department store Debenhams' trading update came as a pleasant surprise to Singer Capital Markets, which expects to bump up its full-year pre-profit forecast by about £10m (8%) once it has processed the latest figures.Sales were up 3% in the 12 weeks to 23 May, versus Singer's expectations of 2.8% growth. Life for like (LFL) sales were down 0.8% but this too was better than Singer had been expecting; the broker was forecasting a 1.1% decline in LFL sales.The group also claims to have continued gaining market share up to the end of April.Singer rates the shares a buy and had a target price of 95p prior to today's announcement.The share price of animal genetics group Genus is wilting after Evolution Securities downgraded the stock.The broker has shifted its stance from 'buy' to 'reduce' as it believes Genus will struggle to meet market forecasts in the year to end-June 2010.'Three key features will influence Genus's share price in the forthcoming financial year: currency, the prospects for established markets and the speed of emerging market development,' write Evolution analyst James Wheatcroft.'We do not expect currency to prop up headline performance as per 2009 and underlying growth is flat. Established markets are tough. We have cut our estimates for 2010 and move to reduce,' Wheatcroft added.