Broker tips: RBS, BP, Capita

5th Sep 2014 13:10

Berenberg has hiked its target price for Royal Bank of Scotland from 210p to 250p but has kept a 'sell' rating, saying that it remains "unconvinced on the core profitability of the franchise".In a research report on Friday, the broker said: "We believe the shares are expensive considering the legacy risks and the negative impact of the restructuring plan has yet to fully take effect."Liberum Capital has retained a 'hold' recommendation for oil major BP after a US judge found the oil major "grossly negligent" and "reckless" in the Deepwater Horizon disaster of 2010, causing the stock to fall around 6%, or 29p, on Thursday."This may look overdone given a maximum fine estimated at US$18bn (47p) may be reduced by several factors and that the market has already discounted some level of penalty," Liberum said on Friday. According to the broker, "there may be some speculation about BP's business in the US until there is greater clarity", though this could be "some way off".UBS has cut its rating for business process outsourcing group Capita from 'buy' to 'neutral', saying that the stock's valuation is full after a 17% outperformance of the FTSE 100 so far this year.The bank acknowledged that the stock's valuation and premium to the market "do not look especially demanding compared to previous levels". However, it said: "Further outperformance from here will be driven by 2015 earnings performance and we downgrade to 'neutral' as we wait for better visibility."