Broker tips: Fresnillo, Old Mutual, Smith & Nephew

13th Aug 2013 11:16

The share price of precious metals miner Fresnillo continued to rebound strongly on Tuesday following recent falls, with UBS providing a boost after initiating coverage of the stock with a 'buy' rating and 1,250p target price.UBS said: "Fresnillo is one of the world's lowest-cost primary silver producers, and we believe it will generate sustainable free cash flow even in a lower commodity price environment. We expect low-risk, high-return volume growth to drive an earnings recovery from 2013, and see attractive long-term growth optionality."Anglo-South African financial services giant Old Mutual is now trading more or less in line with Nomura's target price of 202p after a positive reaction to last week's first-half results, prompting the broker to remove its 'buy' rating for the stock on Tuesday.Nomura said it now sees "better value elsewhere in the sector" as it moves to a 'neutral' recommendation.Citigroup has cut its rating for medical devices maker Smith & Nephew from 'buy' to 'neutral', saying that the stock's strong performance this year now leaves limited upside.The broker said: "Smith & Nephew has had a solid run since the beginning of the year and, whilst we continue to believe in the company's long-term strategy, focusing on international market growth and lowering exposure to developed market hips and knees, we believe that the current valuation fairly reflects this given the earnings growth on offer."BC