Broker tips: Royal Mail, ITV, Diageo, IHG

20th Nov 2013 12:16

UBS has told clients to 'sell' their shares in Royal Mail, saying the postal service is now over-valued. The investment bank, which was one of the lead bookrunners on the £3.3bn privatisation of Royal Mail last month, said the market was far too optimistic about the company's prospects. Nomura has reiterated its 'buy' rating for terrestrial broadcaster ITV on the back of this week's solid trading update from the company combined with continuing advertising momentum."ITV trades at a 2014 price-to-earnings ratio of 14.6x, which is a 8% discount to ProSieben while ITV's current multiple remains 6% below its median through the cycle 2005-09 level and 35% below its peak 2007 multiple. With ITV benefiting from its leveraged position on UK macro/advertising improvement, we remain 'buyers'," Nomura added.Numis Securities has held on to its 'add' rating for Diageo following the company's Investor Day this week at which it reiterated its commitment to delivering on medium-term growth guidance.However, Numis admitted that while the firm showed its confidence in hitting these targets, "the market may be disappointed that no new explicit targets have been put in place".The share price of hotel operator InterContinental Hotels Group (IHG) was in the red on Wednesday morning after analysts at Jefferies said that the company's Capital Markets Day (CMD) this week failed to offer a short-term share-price catalyst. Jefferies said that the company reiterated its strategy to deliver high-quality growth, which includes: growing market share through its large pipeline; improving margins as it moves further towards the Managed & Franchised business; returning further capital to shareholders as assets are sold. However, the broker seemed unimpressed: "None of this was new and no specific numbers or targets were given."BC