Broker tips: Smiths Group, Unilever, RSA

17th Jul 2013 11:22

Investec has reiterated its 'buy' rating and 1,500p target price for Smiths Group despite the technology firm surprising the market with a profit warning on Wednesday, with the broker saying that its positive outlook on the stock remains unchanged."Although this update is negative, it does not fundamentally change our view that this is a group containing high-quality operations, most of which are performing well against mixed market conditions," analyst Michael Blogg said.Credit Suisse has cut its rating for cosmetics, foods and household products giant Unilever from 'neutral' to 'underperform', saying that the stock has become one of the more expensive consumer staples.The broker said that the company has "come a long way" after restoring growth, stabilising and improving market shares and upping investments (of which Personal Care has been the forefront of)."But there is a lot more to do in both Household and Food. The former has delivered better growth, but at a cost to returns. The latter has seen growth slow sharply and market shares come under pressure. More investment is needed."RSA Insurance was a strong riser on the FTSE 100 on Wednesday morning after Citigroup raised its recommendation for the stock from 'neutral' to 'buy', saying that the company is on a "clearer path to earnings growth".First-half results due on August 1st could be a positive catalyst for RSA's shares as the company is expected to announce progress in the turnaround of its underperforming businesses, Citi said. The broker believes that the stock's 11% year-to-date underperformance "provides an attractive entry point" for investors. BC