Broker tips: St James's Place, Schroders, Punch Taverns

12th Apr 2011 13:27

UBS has downgraded wealth management group St James's Place (SJP) to 'neutral', from 'buy', despite saying that the company remains the "best run undiversified UK life company."However, UBS cuts its rating given the increasing odds of Lloyds selling its 60% stake in the company. The broker believes that SJP - not integrated with Lloyd's other life insurance/banking operations - will be classified as a non-core unit when Lloyd's strategic review is published in June.Nevertheless, the target price is raised from 339p to 360p.Credit Suisse upgrades fund manager Schroders from 'underperform' to 'neutral', saying that its valuation is increasingly attractive relative to the peer group given the strong earnings momentum.The broker has raised its revenue forecasts for 2011 and 2012 by 3-4% to reflect slightly higher assets under management forecasts and revenues from surplus capital. Pre-tax profit estimates for 2011 and 2012 are upped by 5% and 3%, respectively.The target price is increased to 1,850p, from 1,650p previously.Financial services firm Matrix sticks with its 'hold' rating on Punch Taverns after the pub owner's first half results came in-line with expectations.Pre-tax profit of £61m is said to be on target, "and with current trading looking quite promising, the company expects to meet expectations for the full year," said analyst John Beaumont.However, the broker said that there was not enough new information to warrant much change to existing estimates.A target price of 78p is retained. ---bc