Broker tips: RBS, Tesco, Perform

14th Nov 2013 12:29

Investec has upgraded its rating for UK domestic banking group RBS from 'sell' to 'hold', but maintained its cautious view on the stock.Analyst Ian Gordon said that the RBS "disaster story" has been running since 2007, yet he still sees little hope of a meaningful near-term recovery for shareholders. The broker has cut its target price from 345p to 335p, but said that the recent collapse in the share price triggers a lift in its recommendation from 'sell' to 'hold'.Supermarket giant Tesco was being pressured lower on Thursday morning by a Goldman Sachs downgrade from 'neutral' to 'sell', with the bank saying that investors will have to wait a while for a cash return.Goldman estimates that Tesco store sales have lost 100 basis points (bp) of grocery market share since 2010, though this decline is only 30bp when including online sales. "Continued pressure from the discount and online channels will drive lower UK margins in the medium term, in our view," the bank said.Prime Markets has labelled Perform Group as a 'sell' following the digital sports media firm's profit warning on Thursday."With weakness in technology and production hitting the EBITDA measure so hard, and mindful of the raft of director share sales earlier in the year around current levels, we expect further weakness in the shares before a sustained recovery develops."BC