UK & South Africa: UBS downgrades SABMiller to ‘neutral’ from ‘buy’

UBS downgraded SABMiller to ‘neutral’ rating from ‘buy’ and cut target to 1100p from 1120p. Despite a part recovery from 2Q underperformance, UBS still forecasts a below-trend growth in FY 07 of +10% in USD EPS, Dow Jones Newswires released August 17.

UBS cites the currency headwinds, investment in brands and infrastructure and continuing profit declines in Miller for the underperformance. It reduces 07 EPS dollar EPS forecast to $119.92 from $120.86. But it notes downgrades to Miller and South Africa are offset by upgrades across other regions including Latin America.

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