Broker tips: M&S, Carnival, UK grocers

LONDON (ShareCast) - Societe Generale (Paris: FR0000130809 - news) has lifted its target price for Marks & Spencer (Other OTC: MAKSF - news) from 492p to 524p but maintained a 'hold' rating on the high street retailer, saying it sees little upside from current levels. Ahead of trading update on Thursday, the broker said it no longer reckons M&S will produce a meaningful recovery in general merchandise like-for-like sales in the foreseeable future.

Numis Securities has raised its stance on Carnival Corporation (NYSE: CCL - news) from 'hold' to 'add' and its target price from 2,950p to 3,600p, saying the outlook is improving for the cruise industry.

The broker said that Carnvial's first-quarter results last week "provided clear evidence of improving industry fundamentals, we believe, demonstrating strong like-for-like (constant currency) net revenue yield growth".

Structural headwinds are persisting for UK grocers, with low inflation and falling calorie intake presenting a problem across the supermarket industry, according to Goldman Sachs (NYSE: GS-PB - news) . The bank downgraded its recommendation on Morrisons to 'neutral' on Monday, saying the stock has now reached its target price. It reiterated 'sell' ratings on rivals Sainsbury and Tesco .

"A small recent slowdown in growth rate of the discounters has come alongside a more aggressive profit rebasing than we forecast by Tesco (Xetra: 852647 - news) . The average 15% share price rise year-to-date for the group suggests growth, long-term margin and capex assumptions which we do not believe are achievable," it said.