LONDON (ShareCast) - Credit Suisse has reassessed its forecasts across the European General Retail sectorahead of the January 2012 trading statement season.

"Demand conditions for 2012 remain uncertain, although we are cautiously optimistic on the UK environment versus the rest of Europe," the Swiss broker said.

"Annualising against the VAT increase, food price inflation as well as easing raw material costs (cotton) should provide some underpinning to UK forecast expectations. Operational gearing is an issue in the short term although investors are in our view aware of demand related issues and consumer pressures into 2012."

Outperform ratings are given to Kingfisher, Next, N Brown, Dixons and Halfords. Underperform ratings are given to both Marks & Spencer and Home Retail.

Investec has downgraded AIM-listed miner European Goldfields (EGU) from buy to hold, saying that the current pricing reflects Eldorado's offer.

On Monday, the firm recommended shareholders to vote in favour of the $2.5bn offer by Eldorado GoldCorporation (ELD). Investec analyst Hunter Hillcoat said he doesn't expect a counter-bid to the 'friendly offer', "but recommends holding EGU for exposure to any pricing upside."

"While the see-through value of the offer is currently well below our previous EGU target price of 1002p/share, this reflects the recent fall in the ELD share price, a natural consequence for most corporate predators," Hillcoat added.

The new target price is 810p.

finnCap has downgraded LSL Property Services from buy to hold and reduced its target price from 270p to 250p.

"Weak markets remain the biggest frustration for the group and the recent FSA paper on mortgages will hardly help," said analyst Duncan Hall.

The broker said that the inactive UK housing market leaves the firm's trading outlook for 2012 and 2013 "somewhat clouded".

BC

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