Broker views: Industrials, fun parks and mining

Macquarie has upgraded Cape (LON:CIU) to outperform (from neutral) which it says is due to the industrial services group resolving two key issues, including the Asbestos Product Liability litigation and a potentially unsustainable dividend.

The broker said: “This makes the investment case far more compelling in our view, allowing investors to focus on Cape’s operational performance which is strong and getting better with reduced risks of negative catalysts.”

Target lifted to 240p from 200p.

Analysts at Berenberg now recommend investors sell shares in Merlin Entertainments (LON:MERL) stating the Alton Towers operator is potentially one misstep away from triggering a material de-rating.

The bank said: “We initiated coverage of Merlin in November last year with the core view that momentum across the business could be slowing for reasons beyond just the weak market backdrop. The full-year results two weeks ago arguably confirmed just that.”

Target cut to 375p from 440p.

Meanwhile, JP Morgan Cazenove turned its attention to the mining sector and upgraded KAZ Minerals (LON:KAZ) to overweight (from neutral) following a 20% share price pullback and with balance sheet and project risks diminishing.

The City heavyweight maintained its underweight call on Antofagasta (LON:ANTO) and highlighted Randgold (LON:RRS), Acacia (LON:ACA) and Petra Diamonds (LON:PDL) – all rated overweight – as its top picks within the European metals and mining space.

Story provided by


Claim 12 issues of MoneyWeek (plus much more) for just £12!

Let MoneyWeek show you how to profit, whatever the outcome of the upcoming general election.

Start your no-obligation trial today and get up to speed on:

  • The latest shifts in the economy…
  • The ongoing Brexit negotiations…
  • The new tax rules…
  • Trump’s protectionist policies…

Plus lots more.

We’ll show you what it all means for your money.

Plus, the moment you begin your trial, we’ll rush you over THREE free investment reports:

‘How to escape the most hated tax in Britain’: Inheritance tax hits many unsuspecting families. Our report tells how to pass on up to £2m of your money to your family without the taxman getting a look in.

‘How to profit from a Trump presidency’: The election of Donald Trump was a watershed moment for the US economy. This report details the sectors our analysts think will boom from Trump’s premiership, and gives specific investments you can buy to profit.

‘Best shares to watch in 2017’: Includes the transcript from our roundtable panel of investment professionals – and 12 tips they’re currently tipping. The report also analyses key assets, including property, oil and the countries whose stock markets currently offer the most value.