Broker tips: HSBC, Serco, Ocado

19th Nov 2012 10:58

Investec has upgraded its rating for global banking giant HSBC from 'hold' to 'buy', saying that the downgrade cycle could finally be over.Investec has raised its target price for the stock from 590p to 630p. "From here, we expect outperformance versus Lloyds ('sell') and RBS ('sell')."Credit Suisse has lowered its recommendation for outsourcing group Serco from 'outperform' to 'neutral', highlighting limited upside for the stock.The broker said that it has been prompted to reduce its rating "given lower near-term visibility, a temporary moderation in Serco's organic recovery and a 28% price-to-earnings ratio re-rating (on 2013 estimates) in the year to date."Jefferies labels Ocado's newly announced refinancing as a good move, though it has kept its 'hold' rating and 80p target price for the stock.The broker said that the extension of debt facilities and the placing are a "good defensive move" and the news that trading momentum has improved "is also of some comfort". However, a more positive fundamental call on the stock still feels premature.BC