Broker tips: Lloyds, Whitbread, Direct Line

23rd Oct 2012 10:53

Credit Suisse has maintained its 'neutral' rating and 31p target price for UK banking group Lloyds ahead of its third-quarter results on November 1st.With the stock trading at 0.6 times 2013 estimated tangible net asset value (tNAV) for a 5-7% return on tangible equity (RoTE), the broker reiterates its 'neutral' rating "but believe that given recent strength the stock should give back some of the gains"."There is a still a long way to go, although the group has made good progress in restructuring and improving its funding profile."Investec has retained its bearish view of Costa and Premier Inn owner Whitbread after first-half results missed forecasts and a disappointing outlook for the remainder of the year.The broker has maintained its 'sell' rating and 1,650p target price for the shares."Whitbread's H1 was marginally behind our estimates and there is no impetus from the trading outlook statement to warrant a FY13E forecast increase," said analyst James Hollins.Nomura has started coverage of newly-listed Direct Line Insurance Group with a 'reduce' rating and 174p target price, saying that the restructuring will take time to translate into share price performance.In our view, to gain full realisation of the restructuring potential, we believe data points of performance are required. Hence, we believe in the short term, as we head into full-year results, that there is better relative value in Admiral and RSA."BC