Upgrades and downgrades
Citigroup Smith Barney has upgraded its rating to 'buy' from 'sell', saying the casual wear retailer was significantly geared to an upswing in its two key markets, Hong Kong and Taiwan. Analysts Mark Rosenfeld and David Wong said the two markets accounted for 40 per cent of Giordano's turnover. They raised their target for the stock from $3.20 to $4.
Yue Yuen Industrial (Holdings)
Credit Suisse First Boston has downgraded the shoemaker from 'neutral' to 'underperform', citing slower earnings growth in the medium term. Analyst Simon Lam said the athletic footwear maker was not on the path to faster growth, given the maturing nature of its business. He expected Yue Yuen's profit to grow 5 per cent to 10 per cent in the next two years. On the valuation front, he said the stock seemed pricey. Trading at 14.3 times next year's expected earnings, the counter was fetching a multiple which represented a significant premium to its medium-term growth rate, Mr Lam said. Still, he raised his target for the stock from $19.90 to $21.
ING Financial Markets has kept its 'hold' call on the stock and a target of $50.50, citing competition concerns in the market for third-generation (3G) mobile-telephone services in Britain. On Wednesday, Hutchison's 65 per cent-owned subsidiary, 3UK, announced a new round of voice tariff cuts to lure subscribers. But the marginal benefit from the tariff cuts would probably decline as 3G handsets were still limited in their availability, analyst Cusson Leung said. Also, the tariff cut would prompt other mobile operators to follow. With Vodafone Group entering the 3G market next year, 3UK would see more competitive pressure given its lack of 2G customers.