Broker tips: RBS, Lonmin, easyJet

16th Nov 2011 12:05

AlphaValue downgraded its rating on part-nationalised lender Royal Bank of Scotland on Tuesday from buy to add."All revenue lines were below expectations, while costs were in line and impairment charges slightly above," the broker said.As such, AlphaValue has cut its underlying earnings projections for 2011 and the next couple of years. The target price is slashed from 29.8p to 24.6p.UBS has cuts it production and earnings estimates for mining giant Lonmin, saying that the stock remains its "least preferred name in the space".The group has lowered its production guidance for 2012 from 800koz to 750koz, "as despite having the capacity they believe the risk of production disruption is considerably higher from the rise of Section 54 stoppages", UBS notes.Due to the lower production forecasts, UBS has cut its current year revenues and earnings per share estimates by 4% and 9.9%, respectively. As such, the target price comes down to 1,000p, from 1,025p previously. A sell rating is kept. Credit Suisse has reiterated its outperform rating on budget airline easyJet, saying that the "capacity outlook inspires winter confidence".The broker said that capacity cuts at key easyjet bases (including Stansted, Malpensa and Madrid) are encouraging on pricing developments. "We think these cuts should continue to flow through as booking levels for weaker carriers disappoint, prompting late competitor withdrawals and attractive last minute fares for EZJ. As such, we think the current mid-single digit revenue per seat run rate seen by EZJ through winter can be exceeded."The broker says that the stock, trading at 9.5 times 2012 earnings, looks attractive. "We think pricing can continue to prove a positive catalyst in the short term to supplement potential double-digit medium term FCF yields." The target price is raised by 12% from 412p to 463p.BC