Broker tips: IAG, Rank, Lonmin

13th May 2013 11:49

UBS has hiked its target price for airline group IAG from 285p to 310p and kept its 'buy' rating for the stock, saying that the risk to consensus estimates continues to be on the upside.The broker reckons that consensus forecasts do not yet reflect the acquisition of an additional 44.66% stake in Vueling (now 90.51% owned) last month. "We don't incorporate Vueling into forecasts as we await further guidance at the June investor's day and first-half results. However, Vueling in our view could be c3.0% EPS accretive in 2013e and c4.0% in 2014."Shares in Rank Group aren't that expensive, according to Panmure Gordon, but the broker has kept its 'hold' rating and 160p target price for the stock after its third quarter was affected by poor weather."For the group's transformation to be complete we think consideration should be given to the demerger of the Mecca & Enracha businesses, whose profit trajectory has been given a boost through the inclusion of the online operations."In spite of a 'very strong' second-quarter performance from platinum miner Lonmin, Westhouse Securities has retained its 'sell' rating and 235p target price for the stock given uncertainty surrounding potential labour disruptions."This was a solid operating performance resulting in an upgrade to forecast mine production, but, significantly, after the smelter problem reported recently, no change in sales guidance. However, the company is now entering wage negotiations with the unions, and disruptions are possible in the next few months. We will review the results in detail, but remain cautious particularly given the labour talks."BC