Broker tips: RBS, IAG, Howden

28th Feb 2013 10:59

Nomura has reiterated its 'reduce' recommendation and 300p target price for UK lender Royal Bank of Scotland (RBS), citing a decline of earnings power.Shares are trading at 9.2 times current Core EPS, improving to 8.2 times by 2014. "Given that we still see non-core headwinds for the group in 2014, this still looks rich relative to our 'buy'-rated peers in the continent. We remain cautious."Investec has retained its 'buy' rating and 270p target price for British Airways owner International Consolidated Airlines Group (otherwise known as IAG) after the 2012 bottom line result came in ahead of forecasts."We welcome the aggressive tone being taken by the management on Iberia ('must adapt to survive') and we are encouraged by the continued strength of trading at British Airways. Iberia strikes are likely to continue, but we see [Chief Executive Officer] Willie Walsh winning the battle on driving the required turnaround."Kitchens and joinery products group Howden saw shares surge on Thursday morning after beating forecasts with its 2012 results; however Panmure Gordon has retained its 'sell' rating for the stock after a strong recent performance."Against a backdrop of increasing uncertainty on big ticket consumer spend we have a cautious recommendation after a strong move up in the share price."BC