Broker tips: RBS, HSBC, Petrofac

13th Jun 2013 11:34

Credit Suisse gave its initial thoughts on the news that Royal Bank of Scotland Chief Executive Officer Stephen Hester has agreed to leave the group, saying that while the exit had been speculated in the past, "it still comes as a surprise in terms of timing".The broker reiterated its 'underperform' rating and 265p target price for the shares, saying that RBS is its "least-preferred UK domestic bank and one of our least-preferred European banks". "Stephen Hester is generally seen as having done a good job and we expect the news to be taken negatively," Credit Suisse said.Investec has upgraded its rating for global banking giant HSBC from 'reduce' to 'buy', highlighting the potential for dividend growth.Analyst Ian Gordon said that the bank has ruled out any further major value-destructive acquisitions, which means that its surplus capital generation "requires a home". He said that while share buybacks aren't likely, HSBC's "dividend paying capacity is strong".Citigroup has raised its recommendation for oilfield services giant Petrofac from 'neutral' to 'buy', saying it sees scope for a re-rating following its recent slump."We see scope for a re-rating over the next twelve months as the current backlog underpins 14% earnings growth in 2014 and award intake continues to accelerate," said Analyst Ryan Kauppila.