Broker tips: ARM, Prudential, Fresnillo

25th Jun 2013 11:55

Shares in chip designer ARM Holdings were making gains on Tuesday morning after Investec upgraded the stock from 'hold' to 'buy' and lifted its target price from 955p to 1,000p, saying that the investment case is still strong despite the recent sell-off."Negative sentiment, but strong fundamentals creates an attractive entry point in our view," analysts said, pointing out that the stock is trading 20% below its historical average price-to-earnings ratio.Berenberg has reiterated its 'buy' rating and 1,420p target price for financial services giant Prudential, saying that the recent pull-back on emerging-market concerns represents a "rare buying opportunity"."Recent concerns are overdone, in our view, with the business model relatively immune to markets. Demographic shifts continue to drive demand, while balance sheet and FX exposure appear manageable. Having recently underperformed AIA, we see the current entry point as attractive."Hefty falls in the share price of precious metals miner Fresnillo since the start of the year triggered a ratings upgrade by Citigroup from 'sell' to 'neutral' on Tuesday morning."Following its sharp fall, Fresnillo has reached our target price [1,016p] and hence we are upgrading the group to 'neutral' from 'sell'. Our earnings per share and net present value (NPV) remain unchanged as does our valuation metric of 1.4x price-to-NPV. Our upgrade is entirely in response to the sharp price fall."