Broker tips: Jupiter, Barratt Redrow, Bytes Technology, Hays, B&M
By Iain Gilbert
Date: Wednesday 16 Jul 2025
(Sharecast News) - Canaccord Genuity has raised its rating for Jupiter from 'sell' to 'hold', saying that the fund manager is taking actions to "right-size the business and rebuild scale".
The broker has doubled its target price for the stock from 60.0p to 120.0p, hailing management's actions to cut costs and use surplus capital for attractive M&A.
"Material internal cost reductions were announced in May, delivering an average c.25% earnings uplift over FY25/26. The immediately accretive acquisition of CCLA was announced in July, which we estimate delivers 17% accretion pre-cost synergies and c.40% including fully realised cost synergies," Canaccord said in a research note.
However, prospects for organic revenue growth at Jupiter still remain "fragile and less within management's control", the broker said, highlighting the "active to passive shift" - investors are increasingly moving investments from actively managed funds to passively managed funds - and revenue margin compression as constant headwinds for the business.
"Jupiter reported 'rebuilding of momentum' in institutional flows but higher margin retail net outflows are yet to show improvement, meaningful and consistent evidence of which would make us more positive."
Analysts at Berenberg lowered their target price on housebuilder Barratt Redrow from 540.0p to 485.0p on Wednesday following the group's FY25 trading update a day earlier.
Berenberg said FY25 has proven to be "a more challenging than expected year" for Barratt Redrow, with housing market headwinds persisting and, although it delivered an FY25 result in line with expectations, the impact was felt on reduced expectations for FY26.
The German bank pointed out that Barratt Redrow said it had seen "some improvement" in the mortgage market, but acknowledged that underlying private sales activity "has remained sensitive to consumer caution". On its conference call, Barratt Redrow said price growth was below 1%, while build-cost inflation was flat in FY25 and was expected to rise to 1-2% in FY26.
However, with "a robust balance sheet" and further synergies to be garnered from the Redrow integration, Berenberg thinks that the group remains well-positioned for when "a more favourable market environment" emerges.
Berenberg, which reiterated its 'hold' rating on the stock, also noted that Barratt Redrow trades on 12x earnings per share and 0.8x tangible net asset values.
Jefferies upgraded Bytes Technology to 'buy' from 'hold' on Wednesday and reiterated its 380.0p target price on the stock, citing an attractive risk/reward.
It said that while the AGM statement was "undeniably weak", the growth slowdown should be temporary and that the fundamental health of Microsoft - around 50% of gross profit - should underpin a future recovery.
"Meanwhile, the shares have now fallen circa 36% off the back of 8-11% forecast downgrades, leaving the shares on an ex-growth valuation," Jefferies said. "We think this creates an attractive risk reward, and, as a result we upgrade out rating to buy."
Morgan Stanley downgraded recruiter Hays on Wednesday to 'underweight' from 'equalweight' and cut its price target on the stock to 55.0p from 64.0p, citing "multiple reasons to be cautious".
"With downside risk to FY26 consensus expectations, a weaker balance sheet and heightened risk of a dividend reset - though we acknowledge this is partly reflected already - and debate on cyclical versus structural headwinds, we see Hays' risk reward profile as tilted to the downside once again," the bank said.
Morgan Stanley noted that staffing data in Germany and the UK - which account for around 50% of group net fees combined - has recently been weak and Hays' comments on job flow deterioration in June reads negatively for the group's short-term outlook.
It said that, contrary to some of the other staffing companies it covers, Morgan Stanley thinks the negative earnings momentum revision might not be over quite yet.
"While we acknowledge a potential dividend cut is well-expected by the market and already partly reflected in consensus, it means Hays is currently trading on circa 1% dividend yield (we assume 2.5x cover ratio, implying a c.80% dividend cut) a very low level by historical standards and versus other staffers. We see limited room to increase cash return to shareholders meaningfully before FY28e."
JPMorgan Cazenove slashed its price target on B&M European Value Retail on Wednesday to 207.0p from 281.0p and reiterated its 'underweight' rating following the discount retailer's trading update a day earlier.
"Our concerns mount following the 1Q26 trading update shared by B&M yesterday," the bank said. "First, UK LFL came in at +1.3% (versus 2.5-3% Street expectations and JPMe at 5%), which suggests very weak sales densities in the context of ongoing space addition," it said.
JPM said the underlying trends are even more concerning in the context of weather and calendar tailwinds in the period, while the LFL outcome implies a very meaningful gap versus other reporters, across grocery and general retail.
"Second, the absence of an FY26 outlook at this point (only reporter amongst peer group) is reflective of the lack of visibility and action plan, in our view," JPM said. "Third, and perhaps most important, we are not yet convinced that management are focused on addressing what we see as the most challenging aspects of the investment case, at least for the time being."
JPM said it was revising its expectations down to reflect a more acute price-reset needed to revamp LFLs, sitting around double digit percentage below the Street.
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