Jefferies has maintained its 'hold' rating for telecoms group Vodafone saying that the highlight of the first-quarter statement is the uptick in competitive pressures across several markets.
"We see downside risk to consensus controlled free cash flow forecasts at three levels (lower revenues, less scope to stabilise margins through lower commercial costs, weaker euro)," the broker said.
Jefferies says that the results have reinforced its view that Vodafone's dividend pay-out ratio is getting "uncomfortably tight".
Investec has raised its target price for engineering group GKN from 225p to 245p and maintained its 'buy' rating for the stock, saying that the shares are 'flying into a re-rating'.
"With almost 40% of profits now derived from higher-quality aerospace markets, the £633m acquisition of Volvo Aero (VA) materially enhances the GKN investment proposition, in our view," the broker said in a research note on Friday.
"The terms of the deal are less onerous than the market feared, but perceived risk associated with the more cyclical automotive/industrial sectors has capped the re-rating."
Panmure Gordon has reiterated its 'buy' rating and 425p target price for insurance giant Aviva, saying that is its US operation is sold, it would result in a massive increase in economic capital.
Panmure analyst Barrie Cornes said: "The target is to raise Aviva's estimated economic capital cover from c145% at Q1 2012 end to 160-175%. We believe that by selling the US operation, even at a substantial loss to its c£2bn 2006 purchase price, Aviva will increase economic capital by c£1.3bn plus the sale price, thus increasing its economic capital ratio towards 160%."
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