Chip designer ARM Holdings is widely regarded as the 'best in class' in the UK tech sector, but analysts at both Morgan Stanley and Investec took the stock down a peg on Tuesday morning, deciding to take a more cautious stance after a recent strong run.

Morgan Stanley has slashed its rating from 'overweight' to 'equal weight' but raised its target price for the shares from 725p to 911p. "While we remain very impressed by ARM and its partners' progress, we believe the current absolute share price is not attractive enough for new money," Morgan Stanley said.

In a similar move, Investec has moved its recommendation from 'buy' to 'hold' and raised its target price from 800p to 900p.

Nomura has increased its target price for luxury brand Burberry from 1,210p to 1,350p after raising its earnings forecasts by 1% following the company's third-quarter results.

However, while the broker says that Burberry is "executing well on retail and merchandising strategies", it has retained its 'hold' rating on the shares.

Panmure Gordon continues to label grocery group Ocado as a 'sell', saying that company is still underperforming expectations and its multi-channel competitors.

The broker said that while 'Click & Collect" will gain momentum in online food retailing, Ocado will be unable to deliver on this. "Much depends upon February's launch of CFC2 [distribution centre] going to plan, but we think that there is a lot that can go wrong."

BC

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