Despite SSE underperforming the wider UK utility sector on the news that its Chief Executive Officer (CEO) is leaving, Credit Suisse has kept its ‘outperform’ recommendation for the shares, saying that value-creation is expected to continue.
Credit Suisse said it expects no change in the SSE business strategy despite Marchant’s departure, ‘nor does there need to be’. It noted that the board’s criteria for selecting a new frontman was a ‘commitment to the dividend’.
UBS has reiterated its ‘buy’ rating for engineering giant GKN and raised its target price for the stock from 230p to 270p, saying that ‘life should get better’ after a difficult fourth quarter.
The broker reckons that in six to nine months’ time, European auto production growth should be positive – global production should growth would by 4.0% in the fourth quarter – and other industrial markets should also return to growth. Meanwhile, reducing integration costs at Volvo would also help.
Investec has cut its rating for sweeteners and food products group Tate & Lyle from ‘buy’ to ‘hold’ after reducing its forecasts ahead of the group’s third-quarter results, saying it’s time to ‘pause for a breather’ after shares have jumped 29% since mid-September.
‘We had been arguing for a re-rating and an 850p 12 month price target in November. But Tate’s virtual arrival within just three months sends a cautionary signal to us,’ said analyst Martin Deboo.