Broker tips: RBS, BG Group, Rentokil

4th May 2012 11:11

Nomura has maintained its reduce rating and 26p target price for part-nationalised lender Royal Bank of Scotland, but acknowledges that the first-quarter results were in line and 'modestly better than Lloyds'."The RBS Q1 results were similar to our expectations and we thus expect limited movement in current-year profit expectations," the broker said. It added that RBS's balance sheet restructuring has happened faster than it had expected.However, Nomura has maintained its negative view on the stock saying that both RBS and Lloyds will "find it difficult" to generate sustainable long-term value in a difficult operating environment whilst still needing to further restructure their balance sheets.Oil and gas giant BG Group was Credit Suisse's 'Focus List Stock' on Friday, which it gave an outperform rating and 1,730p target price.Credit Suisse said that BG's first-quarter results were overshadowed by a 36% increase in Queensland Curtis LNG capital expenditure, which "served as a reminder that BG is more exposed than other majors to execution risks owing to high concentration of value in two countries (Brazil and Australia)", this morning's research note said."BG remains a core long-term holding in European energy as the only real structural growth story in the sector; however, we think the shares could trade sideways in the next few months, as there are no material catalysts for BG in the near term and LNG profits will be seasonally lower in the summer," the broker said.Investec has put its target price for Rentokil Initial under review and maintained its hold rating on the stock after a mixed first-quarter trading update this morning."Key to the full year outturn will be the long-awaited improvement in City Link. Although we are unlikely to change our full-year forecast, we place our target price under review and believe there is still much to do to achieve our expectations," said analyst Robert Morton.BC