Broker tips: RBS, Man Group, Invensys

4th Nov 2011 12:59

With "no negative surprises" in Royal Bank of Scotland's (RBS) third quarter results, Nomura highlights that figures were in line with expectations, but says that "longer-term challenges remain"."Against the currently volatile operating environment this may prompt some positive relief and has potential read across to Lloyds, which reports on Tuesday," the broker said.However, Nomura highlights that RBS's outlook for longer-term profitability has now deteriorated due to the Independent Commission on Banking recommendations and a macroeconomic uncertainties.The broker keeps its neutral rating and 34p target.UBS has slashed its target price for hedge fund manager Man Group from 250p to 210p, after cutting its current-year estimates by 22%."Following the 5% negative performance of AHL in October, the $1.8bn degear of guaranteed products and the expectations of low performance fees in FY12E, we reduce our estimates by 22% in FY12E. We estimate c. 70-75% of earnings come from AHL," said analyst Arnaud Giblat.Nevertheless, the broker keeps its buy rating on the stock, saying that given challenging markets and low expectations, yesterday's interim results were reassuring on most key concerns. The company is UBS's top pick in the UK asset management sector.Credit Suisse has retained its neutral rating and 210p target price for engineering and software company Invensys but cut its earnings estimates on the back of yesterday's first half results."We believe it is encouraging that there was not a more serious profit miss but our earnings are still not really growing over the next few years," the Swiss broker said."The only catalyst we see for the shares over the next 12 months is a bid approach, but with no action imminent to reduce the size of the pension fund we see no hurry for bidders to take action."BC