Broker tips: RBS, William Hill, CSR

2nd Aug 2013 11:14

Nomura has maintained its negative stance on part-nationalised lender Royal Bank of Scotland (RBS), saying it expects mid-single-digit downgrades to profit forecasts on the back of disappointing first-half numbers. The broker kept its 'reduce' rating and 270p target price for RBS.Nomura said: "Overall, the Core profitability is struggling. If the investment case is around buying the Core income stream like at Lloyds, then this set of numbers is uninspiring, and the group has a long road ahead to restructure sub-optimal areas in the Core operations."Shares in William Hill sank sharply on Friday morning as investors gave a cool reaction to the High Street bookie's first-half results. Even Canaccord Genuity, which labelled the figures as "strong", kept its 'hold' recommendation and 438p target price for the shares, highlighting headwinds for the company in 2015.Growth is set to remain strong this year and 2014 will be helped by the World Cup, but 2015 "represents a bigger challenge in the form of UK point of consumption tax, which we forecast will result in FY15 earnings being in line with FY13", said analyst Simon Davies.Wireless technology group CSR was under heavy selling pressure on Friday after UBS downgraded the stock on valuation grounds, cutting its rating from 'neutral' to 'sell'.UBS said: "Given our more cautious view on the semi [conductor] sector and the fact we feel CSR's valuation is pricing in a relatively optimistic scenario, we would expect the stock to relatively underperform from here."BC