Broker tips: HSBC, Fuller's, SThree

5th Jun 2009 13:26

Attention in the banking sector today is focused on Lloyds Banking Group's AGM, but Swiss bank UBS has been running the rule over HSBC and found cause to reiterate its recommendation to buy the shares.UBS reckons that losses from the bank's ill-advised Household acquisition will be lower than previously anticipated, while the situation on bad debts may not be as bad as feared.UBS has boosted its price target for HSBC from 625p to 675p. Underlying profits at brewer Fuller, Smith & Turner were, unlike its beer, flat, but this represents a strong performance in the current environment, and one that was slightly ahead of market expectations.Profit before tax, excluding exceptional items, eased 1% to £22.8m from £23m the year before, ahead of the £21.4m predicted by broker Charles Stanley and also 'comfortably ahead' of the figure predicted by KBC Peel Hunt.Charles Stanley points to 'encouraging momentum' in Fuller's managed estate, with like for like (LFL) growth of 3% over the year representing an improvement on the figure for the first 43 weeks of the year as indicated in the company's interim management statement.KBC has provisionally upgraded its profit before tax forecast for the current financial year by 4% to £22.2m and has retained its 'hold' position in view of the fact that the shares trade above its 450p target price.Charles Stanley's recommendation is 'add', with a price target of 575p, saying the stock's 'premium rating to the market is proving warranted as evidenced by these results.'A weaker than expected set of interim results from specialist staffing business SThree has not changed KBC Peel Hunt's mind about the shares, which the broker believes are worth buying at the current price.KBC Peel Hunt said investors should not be surprised by the difficult trading conditions the company is experiencing, but having reduced headcount by a quarter the company is well placed to weather the downturn. Meanwhile, SThree has enough cash to support its dividend; the shares are currently yielding around 6%.'SThree has a very strong growth track record, and we believe it has reached a size that will enhance its growth characteristics for the next cycle. We are placing our forecasts under review ahead of the analysts' conference call, but we retain our positive stance on the shares,' said KBC analyst Henry Carver.