Broker tips: HSBC, RSA, SDL

18th Jun 2013 11:01

Citigroup has upgraded its recommendation for HSBC from 'neutral' to 'buy', saying that the future looks better for the global banking giant.The broker said: "With most of the concerns (like US asset quality issues, anti-money laundering fines etc) behind them, and potential benefits once net interest margin (NIM) stabilises, we upgrade HSBC to 'buy' (from 'neutral') with an unchanged target price of 770p.Credit Suisse has raised its rating for insurance group RSA from 'neutral' to 'outperform', citing the group's earnings potential."We believe the multitude of factors that have weighed on returns at RSA will abate over the next two years, leading to an upswing in reported earnings. [...] With 17% implied upside relative to the current share price and a 5.0% dividend yield, we upgrade our rating."Investec has maintained its 'buy' stance for SDL despite a severe profit warning from the translation and communications software firm on Tuesday, saying that it expects the company's performance to improve next year."The scale of the downgrade is disappointing. However the main driver is services, not the tech divisions which are seeing the increased sales and marketing spend. We see services improving and the impact of the sales investment should drive a better FY14 in tech, so while the stock is likely to fall on the update, we stay at 'buy' with a 320p target price."