Broker tips: Wm Morrison, Smith & Nephew, Debenhams

13th Jan 2015 12:17

Markets may have reacted positively after Wm Morrison's agreed to part company with chief executive Dalton Philips alongside a small improvement in sales trends, but Shore Capital remains unconvinced.The broker kept a 'hold' rating on the stock, saying: "The improving trend revealed for the Christmas 2014 trading period is much needed, albeit appears to be as much about favourable multi-year comparatives rather than any notable advancement in underlying trading in our view."The M&A premium at Smith & Nephew has now been "baked in" to the share price, according to UBS which downgraded the medical equipment group from 'buy' to 'neutral' on Tuesday.While the bank said it sees the possibility of a 1,300p take-out bid from a potential bidder, the company is valued on a standalone basis at 1,050p. UBS has set its target price for the shares at the mid-point of 1,175p, raised from 1,100p previously, but this represents no upside after recent gains.Shares in Debenhams tanked on Tuesday after the department-store chain disappointed with its festive trading update, with Investec adding to the downward pressure by cutting its rating from 'hold' to 'sell'."While it is encouraging that management stuck to its new trading stance with 10 fewer days on promotion, we continue to believe that Debenhams is strategically challenged and needs to reinvest further gross margin opportunity back into the offer."