Broker tips: Rio Tinto, Aviva, Compass, NMC Health

27th Nov 2013 11:33

Canaccord Genuity has cut its target price for mining group Rio Tinto but has kept a 'buy' rating, saying that the stock is still 'cheap'."We believe Rio Tinto shares offer investors strong management and advantaged assets combining to drive a growing dividend. Its investment programme should give relatively fast and good quality growth over the next few years as we expect copper and iron ore volumes to pick up."Nomura has raised its target price for insurance group Aviva from 474p to 489p and maintained a 'buy' rating, saying that the stock remains 'relatively cheap' despite the impressive performance over recent few months."[...] we highlight that despite the strong share price performance, Aviva remains relatively cheap compared to its UK peers. Hence, we believe continued delivery should highlight the inherent strong franchise value at the group, and we expect the stock to re-rate from current levels."Panmure Gordon has lifted its target price for catering company Compass after annual results came in better than estimated, but the broker maintained a 'hold' recommendation on valuation grounds.With the valuation close to 10-year highs, organic growth set to slow and a limited chance of additional capital returns next year, the broker believes the stock is "up with events".Numis Securities and Jefferies both reiterated their 'buy' ratings for United Arab Emirates-focused healthcare group NMC Health after Dubai announced that healthcare insurance will become mandatory for all residents, at the expense of the employer. "This is a major positive for NMC Health, which operates three healthcare facilities in Dubai, with another expected to open in early 2014," said Numis analyst Charles Weston. "If this law has a similar impact as that in Abu Dhabi (from 2006), we believe there is significant upside to our forecasts," he said.BC