Broker tips: Lloyds, Aegis, Standard Life Property Income

19th Mar 2010 13:20

There was a rush to buy Lloyds Banking Group shares on Friday morning after the bank's chief executive officer, Eric Daniels, held out hope of a return to profitability in 2010, but Charles Stanley is refusing to get caught up in the euphoria.The broker is sticking with its 'hold' recommendation, having in the recent past been negative about the prospects for the group, especially in view of the 'significant amount of wholesale funding that matures in the next couple of years that will potentially put the margin under strain.'Analyst Nic Clarke still has concerns about 'the impact on bad debts if the UK economy does go back into recession,' but concedes that there are clear underlying improving trends that justify holding the shares. Nomura Securities seems to be coming round to the appeal of Aegis despite the adverse reaction of the market to the advertising firm's results this week.'The stock specific reasons for avoiding Aegis in favour of the agency peer group appear to be falling away,' admits Nomura analyst Colin Tennant, who has a neutral rating on the stock.Aegis's Synovate subsidiary recovered strongly in the second half and Aegis Media performed 'robustly', while Nomura believes 'the management succession issue has been resolved in a way which suggests stability.'The stock is trading on a multiple of 13 times projected 2010 earnings which Nomura deems is not overly optimistic, and if the momentum in the business can be maintained, perhaps with a bit of juicing up from acquisitions, the shares are likely to become 'increasingly attractive', the broker concluded.If it is dividend growth you are after then Singer Capital Markets thinks you could do worse than Standard Life Property Income Trust, which has committed to a 10% increase in the 2010 dividend.The stock is already yielding 6.7% based on historic dividend payments, and that calculation excludes the special dividend of 0.25p the company announced on 3 February.The broker has upgraded the stock to 'buy', noting that 'the shares are on a 9.9% discount (11% upside) to our end 2010 NAV [net asset value] of 66.1p and a prospective yield of 7.4% implying a total return of 17.7%.'