Independent, The (London): View From The City Brokers' Reports

BARRATT DEVELOPMENTS

All the brokers use this part of the year to suggest to their clients their top share recommendation for the coming 12 months. Unusually, Numis says that its best single suggestion is not a share you should buy, but one you should sell. Get out of Barratt Developments, and quickly, the broker says.

Because Barratt has invested heavily in new plots of land over the past 18 months, the housebuilder may turn out to have paid top-of- the-market prices that will make it impossible to turn a decent profit from the houses it builds on the land in the future. Its profit margins are already among the lowest in the sector. It could even have to write off some of the investment, damaging enough to its financial figures but, worse, undermining the City's confidence in the value of the company.

In the early stages of a housing market slowdown, and with house prices likely to fall in some areas over the next few years, Barratt shares could fall by a fifth or more, Numis warns.

HILTON

The hotels and Ladbrokes conglomerate is one of ABN Amro's tips (to buy) for 2005. Although the industry was hurt by the post- Millennium downturn in business travel, hotels began to fill up again last year, and this year the operators ought to be able to push up room rates. Also, Hilton has the chance to sell off some of its property, turning itself from a hotel owner into just an operator and freeing up cash for expansion or return to shareholders. On the betting side, the growth of "virtual gambling" in betting shops, which now offer animated racing and roulette, will continue to push profits.

SHIRE PHARMACEUTICALS

Morgan Stanley has turned positive on this FTSE 100 drugmaker, citing Shire's pounds 700m cash pile, some of which could be returned to shareholders. Whereas in the past, the broker has been concerned that Shire will be tempted to overpay for a new product or a whole company acquisition, recent comments from the chief executive Matthew Emmens assured otherwise. What Shire is buying is a new treatment for hyperactive children that will be ready for launch just as competitors emerge for the company's existing drug in this area, which Morgan Stanley thinks will prove good value.