Broker tips: Royal Mail, Glencore Xstrata, Fresnillo, Ashtead

4th Mar 2014 12:12

The share price of postal and delivery service firm Royal Mail was trading lower on Tuesday after Credit Suisse initiated coverage of the stock with an 'underperform' rating.The Swiss bank has set a target price of 530p, indicating 12% downside potential to current prices. "And for multiples in line with peers and a mid-range financial performance, we see better opportunities elsewhere in the sector," analysts said in a research report.Prime Wealth Group has labelled Glencore Xstrata as a 'buy' after the company beat expectations with annual profits on Tuesday."Glencore shares have struggled to clear 350p since last summer, but with support now at the 20-day moving average at 329p, the shares are expected to return to the February intraday peak of 348p. Once this target is achieved, we expect shares to push on to the top of the July price channel as high as 380p."Gold and silver miner Fresnillo was under heavy selling pressure on Tuesday after the company failed to meet analysts' forecasts with its annual results for last year.Equity Analyst Charlie Long from Sanlam Securities said that after 2012, "2013 was a very difficult year with almost all metrics down significantly [...] Despite the huge share price correction over the last 12 months or so, Fresnillo still trades on demanding [earnings] multiples."Panmure Gordon has raised its target price for Ashtead from 971p to 1,047p and retained its 'buy' rating, following "another sparkling update" from the equipment rental business."Great stuff from Ashtead here, despite tough comps, delivering third quarter results materially above expectations," said Panmure analysts Paul Jones and Mike Allen. "As one of the stronger players in the industry (both in terms of fleet size and financial firepower) Ashtead should continue to enjoy good levels of organic growth, no doubt supplemented by bolt-on acquisitions."BC