Broker tips: Vodafone, Barclays, Kesa Electricals

Nomura slightly reduces its target price for telecoms titan Vodafone as consensus aligns to a more cautious margin outlook.The group sold its 44% holding in French mobile phone group SRF to media firm Vivendi on Monday for €7.75bn (£6.8bn) in cash, which the broker believes was a good price.With the disposal now removed as positive catalyst, Nomura thinks that Vodafone faces more difficult newsflow, such as a new telecom policy draft in India and a tough outlook in Spain. "There is scope for the stock to fall back towards 170p in the near-term," warns the broker.Even though the group expects the rate of margin decline to reduce over the coming years, the Japanese broker notes that it will not stabilise and forecasts a margin decline of 40 basis points (bp) for 2012 (previously a 10bp decrease).Nevertheless, Nomura stays with a 'buy', but cuts its target price by 2% to 215p, from 220p previously.Seymour Pierce keeps a 'hold' on banking giant Barclays, saying that it is uncertain about future growth in revenues.The broker highlighted the Financial Times article that said that Barclays is to increase risk appetite amid internal expectations that a return on equity of 7.2% (versus an end of cycle target of 13%) is likely to stay flat or even fall. "However, as no universal bank has been allowed to fail, no capacity has been taken out of the system, and the bank is facing an uncertain revenue outlook and strong competitive head winds from the likes of Citi, RBS, BoA ML and UBS - which all would have failed without government support, in our view. Instead these banks are competing for the same business as Barclays," said analyst Bruce Packard.Seymour Pierce remains sceptical over revenues and stays with its cautious recommendation and target price of 310p.UBS cuts its forecasts for consumer electronics retailer Kesa Electricals, the owner of the Comet chain, to reflect weaker trading in the UK after the surprise profit warning from peer Dixons.The broker lowers its 2011 pre-tax profit estimate by 8% to €92m, from €100m previously. €6m of the downgrade accounts for a tough environment in UK electricals since January, and a further €2m is attributed to Spanish trading.A 'hold' is kept, but the target price is lowered to 125p, from 140p.---bc