Shares in catering group Compass have lost 14p to 302.5p following a sell note from analysts at Deutsche Bank.
The bank has moved from hold to sell, lowering its target price from 335p to 245p and advising clients to take some profits after a good run by the company's shares. Deutsche said the group was likely to be hit harder by the global recession than investors expect. Analyst Geof Collyer said:
"Compass shares have outperformed the FTA All Share by 125% since the management team came together nearly three years ago. However, we see the group entering a period of unsettling newsflow as it battles to compete in the face of a global recession. We have trimmed our forecasts and lowered our target price as we see the prospect of a de-rating once the market realises that Compass is more geared into the recession than the present rating suggests."
Meanwhile worries about its Advair treatment helped send GlaxoSmithKline 7.5p lower to £10.53, following negative news yesterday from US healthcare group Quidel Corporation. Panmure Gordon said:
"We are seeing a potential negative read-across for GlaxoSmithKline's biggest product, Advair. In its profit warning yesterday, Quidel Corp cited a weak flu season for its first quarter miss. Advair is a strong incumbent and most of its growth is from the COPD [chronic obstructive pulmonary disease which includes chronic bronchitis and emphysema] market, but nonetheless a weak flu season is worth bearing in mind ahead of the company's first quarter results on 22 April. We retain our buy recommendation."
