No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Shares in Close Brothers sparked on Friday after RBC Capital Markets upgraded the stock to 'outperform' from 'sector perform' and hiked its price target to 625p from 475p.
"We think the bank has more fat that it can trim on costs, which is not reflected in consensus," RBC said. "It's tight, but we think that CBG's CET1 ratio can absorb a full top-up for motor finance, incremental restructuring and mid-to-high single digit loan growth."
The FCA published its consultation paper in October 2025, with the final scheme due to be announced in Feb/Mar 2026. RBC said that based on the number of submissions that the FCA has received, it thinks this timeline could be extended. RBC also noted that Close Brothers' current provision for motor finance was 300m.
"With so many different parties (on both sides of the fence), it is difficult to see how someone will not take this to judicial review," RBC said. "This will lead to a pausing of compensation payments and a potential multi-year delay. In the event of judicial review, we would encourage CBG to provision in full, so that the issue only forms part of a potential upside thesis."
RBC said i''s about 5% below consensus on costs in FY28E, leading it to be circa 7% above consensus on pre-tax profit expectations.
Analysts at Berenberg slightly lowered their target price on energy giant BP from 525p to 520p on Friday, following the group's fourth quarter trading update on 14 January.
Berenberg said BP's trading update highlighted "material impairments" in Q4, a higher tax rate expected for FY25 and lower net debt helped by $3.5bn of divestments in the period.
"We lower our earnings forecasts following the release and trim our price target to 520p," said Berenberg. "The main positive, in our view, is that the decline in net debt at the mid-point of the guidance is roughly equal to divestment proceeds for the quarter, suggesting that the company covered dividends and buybacks in Q4 from organic cash flow."
The German bank reduced its earnings per share estimates by 4% and 9% for FY25 and FY26, respectively,, driven by lower GLC earnings assumed, combined with a higher tax rate and non-controlling interest assumed.
Berenberg reiterated its 'buy' rating on the stock.
Berenberg also raised its target price for Genus following the animal genetics group's first-half trading update on Friday, keeping the stock at a 'buy' citing "multiple catalysts" for the year ahead.
The broker gave Genus a new target price of 3,250p, up from 3,050p previously, saying that "2026 promises to be a key year" for the company.
Genus raised guidance for the second time in three months on Friday, with management now expecting full-year adjusted pre-tax profit to come in ahead of the consensus range of 82.7-85.0m, prompting Berenberg to lift its own forecast by 6% to 88.1m.
"Importantly, the upgrades are being driven by strong trading in the PIC (pigs) business, which reflects the benefits of the group's shift towards a royalty-driven model. This is increasing the defensiveness and predictability of earnings and sets a very positive tone for a year that we believe has more positive catalysts to come," Berenberg said.
Berenberg expects a continuation of positive momentum in the PIC division, as well as benefits from the company's 'Value Acceleration Programme' (operational efficiency initiative) to help drive further margin gains in the ABS (dairy/beef) division.
It also highlighted the company joint venture in China, and sexed semen technology, which offer growth opportunities, as well as the potential commercialisation of the PRRS Resistant Pig gene edit, which could be approved this year in core regions of Canada, Mexico and Japan.