UK: S&N target raised, rate unchanged
Scottish & Newcastle, Britain's biggest brewer, has seen its price target raised. Credit Suisse First Boston today upped its target from 360 pence a share to 380p.
In a note, reported by Reuters, CSFB said it was leaving its rate unchanged at "neutral". The investment bank said it felt that potential for further gains in the share price could be created by a merger, although any kind of merger was unlikely within the next 12 months.
The note also said: "With 80% of profits in Western Europe, we believe top-line growth in beer is limited. However, we expect a more aggressive attitude to cost-cutting, particularly in the UK business, to lead to margin upside and higher returns."
In December last year, the brewer reported a jump in half-year pre-tax profits of 8%, to £316m (US$544.7m), while turnover was up by 17% to £3,034m on beer volumes.
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