Broker tips: HSBC, British Land, Glaxo

18th Aug 2009 12:55

Global banking giant HSBC is in pole position among banks to benefit from the global economic recovery when it picks up steam, Goldman Sachs believes.Goldman Sachs (GS) said that with the chapter now closed on HSBC's ill-fated acquisition of US sub-prime lender Household, its HSBC Finance division should stop being a major drag on earnings in 2010, earlier than previously expected.GS has upgraded the stock from 'neutral' to 'buy' and lifted its price target from 580p to 800p. The first quarter update from British Land has left the market unimpressed and prompted broker KBC Peel Hunt to cool on the stock.'Valuation assumptions for the company's portfolio must be severely stretched to justify the current 495p share price,' the broker said. 'The 30% rise in real estate Leader stocks represents a resurgent interest in the sector following some return to realistic property yields and the emergence of a limited number of real estate companies with capital to deploy,' the broker argues, adding that it expects share prices in the sector to pull back in September and October.KBC Peel Hunt has downgraded its recommendation on British Land from 'buy' to 'hold'.Shares in drugs giant GlaxoSmithKline bore up well on Tuesday morning despite disappointing clinical data relating to Arzerra, the blood cancer treatment it has licensed from Danish developer Genmab.Broker Panmure Gordon does not believe the stock will suffer many downgrades as a result of the clinical test data, which showed the drug was not as effective as hoped in the treatment of patients with non-Hodgkin's lymphoma (NHL).Panmure Gordon is currently predicting that Arzerra will be launched as a cancer treatment in the next financial year and will deliver revenues of £100m in its first year of launch, rising to £500m by fiscal 2012. The broker said its revenue forecasts for the drug in the rheumatoid arthritis market are under review.The broker has retained its 'buy' recommendation and has a target price of 1400p for the stock.