Broker tips: ARM Holdings, Imperial Tobacco, IG Group

16th Jan 2015 11:46

Broker Liberum has reiterated its 'sell' call on chip designer ARM Holdings on the back of rising competition from US rival Intel."Smartphones and tablets account for circa 75% of ARM's royalty revenue and has been the key driver of royalty growth," Liberum said. "If intel is successful [with product launches this year] we believe estimates for ARM's royalty re-acceleration are too high (+8% in 2014 to +20% in 2015) and ARM is also likely to de-rate."Morgan Stanley has hiked its target price for cigarette and tobacco group Imperial and named the stock its new top pick, as optimism increases surrounding the financial benefits of a pending acquisition in the States.The bank has decided not to change it forecasts yet pending the deal closure, but estimates that it could be 16% accretive to Imperial's earnings by the financial year ending September 2016. It lifted its target for the shares from 2,680p to 3,250p and maintained an 'overweight' rating on the stock.Canaccord Genuity has downgraded IG Group (IGG) from 'buy' to 'hold' after the spread betting and CFD provider admitted that the shock removal of a currency ceiling in Switzerland on Thursday cost it £30m."Although the £30m is a one-off charge and unlikely to impact the company's longer-term earnings potential, it highlights the potential risk of extreme volatility to IGG's risk management system," said Canaccord.