Broker tips: Rio Tinto, Barclays, Hays

9th Oct 2012 11:17

UBS has raised its target price for resources giant Rio Tinto from 4,600p to 4,700p and kept its 'buy' rating, saying that the stock is its preferred pick of the UK diversified miners.The broker said that Rio "offers the greatest leverage [within the UK diversified mining sector] to a recovery in commodity demand in China, which we expect to occur from Q4 12 as large infrastructure projects approved earlier in 2012 take hold."Investec has reiterated its 'buy' rating and 250p target price for UK banking group Barclays after the firm's purchase of the ING Direct UK business, saying that its reflects the process of 'evolution, not revolution'."While other issues may make the headlines, one hallmark of Chris Lucas's tenure as CFO has been a string of small, value-accretive, bolt-on retail acquisitions. Today's announcement of the purchase of the ING Direct UK business (at a discount) is a continuation of this trend - adding £10.9bn deposits, £5.6bn mortgages, 750 staff and 1.5m customers," said analyst Ian Gordon."While the selective acquisition of distressed Lehman assets in 2008 may go down in history as the most daring, opportune and immediately value accretive transaction of all, Barclays's disciplined but committed approach to opportunities in the retail space is acting as a particularly useful source of sustainable value accretion."Seymour Pierce has upgraded its rating for recruitment firm Hays from 'hold' to 'buy', after the group's first-quarter results came in ahead of expectations."Hays is clearly outperforming Michael Page which reported a 6.5% decline in NFI over the same period," said analyst Caroline de La Soujeole.De La Soujeole said: "We believe Hays has a more resilient business model compared to Michael Page given its more balanced temp/perm exposure."BC