Broker snap: Investec upgrades RBS after recent falls

24th Jun 2013 09:14

Investec has upped its recommendation for part-nationalised bank Royal Bank of Scotland from 'sell' to 'hold', saying that the stock is 'marginally oversold' after the steep sell-off over recent sessions."Enough! The RBS share price has collapsed by 12% in two days, and by 20% in a month, reclaiming its position as the worst performing UK bank year-to-date," said analyst Ian Gordon.He said that the business has experienced "10 days of turmoil", which saw the removal of Chief Executive Stephen Hester, a fresh debate on the 'good bank'/'bad bank' split, as well as continuing discussions over a re-privatisation.Gordon admits: "Given increased political disarray, despite deep 'valuation support', we do acknowledge the potential for further near-term weakness."However, he said that more fundamental investors should place "reliance on the fact that the Chancellor must surely see the folly (and cost) of a 'good bank'/'bad bank' split. "As such, based on a broadly unchanged outlook, we now see modest value."The broker has raised its target price slightly from 300p to 305p.Nevertheless, sector peer Barclays (rated 'buy') is still seen as offering superior visibility and value, while Standard Chartered ('buy') offers the "best value of all" ahead of its trading update on June 26th.After an earlier stint in positive territory, RBS' share price was down 0.17% at 281.21p by 09:49.