Broker tips: Aviva, Schroders, Rolls-Royce, Imagination Technologies

6th Mar 2014 13:05

The share price of insurance giant Aviva soared on Thursday after the company beat expectations with its 2013 results, with Panmure Gordon providing a lift as it upgraded its rating on the stock from 'hold' to 'buy'.The broker highlighted Aviva's internal debt position which had reduced from £5.1bn at the end of the third quarter to £4.1bn by year-end. It has also reached agreement with the Prudential Regulation Authority to reduce this to £2.2bn by the end of 2015, which is a "significant achievement".Credit Suisse has maintained a 'neutral' rating and 2,810p target price for asset management firm Schroders but admitted that the company delivered a "strong set of numbers" with its 2013 results.Schroders reported that profit before tax and exceptional items totalled £507.8m last year, up 41% from 2012, "which was 7% ahead of consensus expectations [£473.9m] with the beat due to better revenues [...] and lower costs", the bank said. However, it highlighted that the stock is currently trading at a price-to-earnings ratio of 15, a premium to the wider sector on a multiple of 13.Aerospace and engine maker Rolls-Royce was trading in the red as sentiment was dampened by cautious comments from Citigroup, which highlighted concerns about accounting issues at the company.Citi said that accounting at the company has "long been questioned by some investors due to some apparently relatively aggressive accounting policies". These concerns may continue to limit upside for the stock, it said.Investec has kept a 'hold' recommendation for chip designer Imagination Technologies, saying that it is likely to downgrade its full-year profit forecasts by as much as a quarter following a disappointing third-quarter update from the firm."A second consecutive sequential fall in core royalty units is the main negative from this [update], and the core requirement now is belief in management's assertion that this will grow again in the second half of 2015," said Analyst Roger Phillips.BC