Broker tips: Schroders, Rolls-Royce, Hunting

8th Aug 2011 12:17

Singer Capital Markets has upgraded its rating on global asset management firm Schroders from fair value to buy, saying that the recent sell-off has "presented an opportunity to invest in a strong business for those with long enough time horizons."However, while the group's interim results were in line, the broker said that in the face of current market declines, marking to market estimates results in a 3% and 7% reduction to 2011 and 2012 earnings per share forecasts, respectively.The target price is lowered from 1,900p to 1,780p.UBS has upgraded power systems giant Rolls-Royce from sell to neutral following the recent decline in the share price.While the broker warned that risks remain for offshore engineers, it also thinks that the civil aerospace model should mean that Rolls-Royce's profitability will be relatively resilient to global economic worries: "on this basis, we believe that a sell recommendation is not appropriate."The target price stays at 590p.A combination of a lower share price and higher earnings for Hunting means that "the valuation now stands on a more attractive price-to-earnings ratio", says FinnCap, who upgrades its rating from hold to buy."[The acquisition of Titan Specialities] raises Hunting's exposure to the higher growth shale gas markets and there are opportunities for Titan to accelerate growth using Hunting's global distribution and manufacturing footprint [...] The deal is significantly earnings accretive in a full year," said analyst David Buxton.The broker's target price stays at 850p.BC