LONDON (SHARECAST) - Broker downgrades put insurance titan Aviva on the skids, pushing the stock's dividend yield beyond seven per cent; BofA Merrill Lynch has downgraded Aviva to 'underperform', although the target price has been raised to 360p from 330p, while Deutsche bank has moved to a 'hold' recommendation and edged up the target price from 360p to 375p. Analysts at the latter cited the 40 per cent jump in the share price since June.
Meanwhile, Imperial Tobacco and British American Tobacco are doing well after Nomura lifted its price targets on both this morning. Nomura raised its targets on all the tobacco names it covers as a result of its updated WACC (weighted average cost of capital) estimates. These are meant to reflect its new assumptions around the risk free rate and equity risk premium. Nomura explains that it has also updated its cost of debt estimates where appropriate. Its new target prices are: BAT 3500p (+3.5%), PMI USD 80.50 (+3.0%), Imperial 2230p (+1.5%) and Swedish Match SEK 285 (+3.5%).
Shares of Diageo are rising after Morgan Stanley named the stock as one of the four “European staples” to own over the next six months.
Berenberg has initiated coverage of household goods colossus Unilever at buy, pushing the stock into the top 10 on the top share index.
FTSE 100 - Risers
British American Tobacco (BATS) 3,220.50p +2.11%
Vodafone Group (VOD) 176.70p +1.76%
Imperial Tobacco Group (IMT) 2,352.00p +1.47%
Diageo (DGE) 1,706.50p +1.37%
Bunzl (BNZL) 1,102.00p +1.29%
United Utilities Group (UU.) 695.50p +1.02%
Reckitt Benckiser Group (RB.) 3,615.00p +0.98%
National Grid (NG.) 685.00p +0.88%
ARM Holdings (ARM) 589.50p +0.86%
Unilever (ULVR) 2,285.00p +0.75%
FTSE 100 - Fallers
Aviva (AV.) 344.10p -4.20%
GKN (GKN) 227.90p -3.80%
ICAP (IAP) 338.80p -3.28%
Royal Bank of Scotland Group (RBS) 265.70p -3.17%
BP (BP.) 437.80p -3.03%
Prudential (PRU) 817.50p -2.79%
Lloyds Banking Group (LLOY) 38.74p -2.79%
Vedanta Resources (VED) 1,064.00p -2.65%
Standard Chartered (STAN) 1,474.00p -2.64%
IMI (IMI) 937.00p -2.60%