BEST OF THE BROKERS

REDROW
UBS downgraded Redrow to “sell”, saying the shares look expensive given its inflexible balance sheet. Redrow said in its interim management statement it has a net debt target of £225m by June. But the broker believes it has limited flexibility to buy land at the bottom of the market and that the valuation is unattractive against the risk of a capital raising.

SABMILLER
“Be afraid…but not very afraid”, said Morgan Stanley (MS) of SABMiller. Citing its ahead of consensus full year 2009 results, the broker has upgraded its earnings per share estimates by nine per cent in 2010 and four per cent in 2011. MS believes there are ongoing concerns over the firm’s still slowing volume growth but rates the stock as “overweight.”

CHRYSALIS GROUP
Investec recommends investors “buy” ahead of Chrysalis’ first half figures this Friday. The broker expects a good performance from its distributor Lasgo despite the downturn, and predicts Music Publishing will have flat underlying growth. The investment case is dependent on the sale of Music Publishing, which Investec says looks unlikely in the near term.

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