Broker tips: RBS, RPS, Copper miners

16th Mar 2012 11:30

Royal Bank of Scotland had its rating upgraded by both UBS and Investec on Friday morning, lifting the shares up nearly three per cent early on."We do not argue that the buy case for RBS is as compelling as it was back in November 2011 when ridiculous scare stories over capital and funding conspired to take the shares down to 17p. The group is now overtly safe - the loans:deposit ratio is now 108% ("core" just 94%), and a core tier 1 ratio of 10.6%." Gordon says that ongoing non-core "run-off" will further strengthen these metrics.Investec now rates the stock as a buy (hold previously) and maintained its 30p target price. UBS also upped its rating from neutral to buy, raising its target price from 30p to 32.5p.Peel Hunt has said it has 'increasing confidence' in environment and property consultancy RPS and reiterated its conviction buy rating on the stock following the group's full-year results last week.After upping its 2012 pre-tax profit and earnings per share (EPS) estimates slightly, Peel Hunt has raised its target price from 235p to 260p."With increased confidence in estimates, which forecast 15% EPS growth in 2012E, and robust finances creating the opportunity for further enhancing acquisitions, we see the potential for both earnings upgrades and a further re-rating of the equity," said analyst Christopher Bamberry.Following Jefferies' first annual copper summit yesterday, the US investment bank said that the key takeaway is that global copper supply growth is likely to fall short of expectations and lead to higher-than-expected prices.Jefferies said that supply constraints are not easing due to declining grades, shortages of key input geopolitical risk factors, increasingly difficult ore bodies and geology, and capital cost inflation. While supply issues are expected to lead to higher copper prices, Jefferies does not expect this to result in higher earnings for the UK-listed copper miners in its coverage. Among the stocks (and subsequent ratings) mentioned in the report this morning were: Antofagasta (hold); First Quantum (buy); Glencore (buy); Kazakhyms (buy); and Xstrata (buy).BC