Broker tips: Watches of Switzerland, Informa, VP
By Iain Gilbert
Date: Wednesday 03 Sep 2025
(Sharecast News) - Deutsche Bank upgraded Watches of Switzerland on Wednesday to 'buy' from 'hold', saying it was "time to put the risk in perspective".
"We believe the downside risk to WOSG earnings driven by US import tariffs is much more contained than the shares are reflecting," said DB. "This is based on our view that where the real risk sits, demand for non supply constrained brands in the US, is a much smaller part of the gross profit pool than is perhaps appreciated."
DB, which has a 450p target price on the stock, said that on its estimates, its 12% of Watches of Switzerland's gross profit pool this year, and this limits the downside risk.
"Even on a sharper downside scenario that sees these brands put through 15% pricing with volumes - 30% in FY27 and squeeze margins further, the shares are still trading on a circa 9x PE, versus the 11x our target price is predicated on."
JPMorgan has reiterated its 'overweight' position on Informa, predicting a "overdue re-rating" for the events, digital products and academic research stock as earnings momentum improves over the coming years.
In July, JPMorgan reinstated its positive stance on the shares following a period of restriction, giving the stock a 1,020p target price. At the time, the bank highlighted potential steps for Informa's management over the next 24 months, including: a focus on organic growth; the potential disposal of academic research division Taylor & Francis; de-risking through deleveraging; and aligning remuneration to shareholder interests.
In a research note on Wednesday, JPMorgan said that, following recent discussions it has had with investors, shareholders are focused on: "a) the resiliency of the portfolio and ability to sustainably grow +5% through the cycle and b) the merits of a potential disposal of Taylor & Francis."
A ten-month trading update from Informa was expected in mid-November, where JPM said it will look for a reassuring update on forward bookings and visibility on 2026 and reaffirmation of the firm's FY25 guide to underpin growing confidence in the narrative.
JPMorgan also said it sees a "strong case for improving earnings momentum", with the bank predicting 10% growth in adjusted earnings per share between 2026 and 2028, which should drive the stock's re-rating to narrow its valuation discount to others in the sector.
Analysts at Berenberg cut their target price on equipment rental firm VP from 905p to 800p on Wednesday as it took a fresh look at the broader UK business services market.
Berenberg said VP holds market-leading positions within niche sectors of its infrastructure and construction end-markets, with smaller exposure to the housebuilding and energy markets, and noted that it operates predominantly in the UK, with some overseas exposure, operating through a series of brands including Groundforce, TPA, Torrent Trackside and Brandon Hire Station.
The German bank, which has a 'buy' rating on the stock, said VP's diversity of end-markets de-risks the group, combining resilient infrastructure exposure, backed by multi-year, committed public spend, with the more cyclical housebuilding and general construction markets.
"In our view, VP is performing robustly in the context of an overall weak macroeconomic backdrop, supported by ongoing infrastructure spending tailwinds, while it enacts a series of self-help measures to more closely integrate its brands," said Berenberg.
Berenberg said the change in target price was in order for it to reflect continued mixed market conditions, as highlighted in July's AGM statement, which it expects to have persisted.
"We see clear potential for VP to deliver far greater earnings growth should its cyclical markets rebound. While awaiting this recovery, shareholders are rewarded with a growing DPS, currently yielding an attractive 7%," added Berenberg. "VP's stock currently trades on an FY26E P/E of 8.3x or EV/EBITA of 7.9x. While current conditions signify that growth is modest, shareholders are generously rewarded with an attractive and sustainable dividend, currently yielding 6.8%, which has delivered a 30-year uninterrupted track record."
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