Broker tips: StanChart, Diageo, Thomas Cook

7th Aug 2012 11:11

Nomura has downgraded its rating for Standard Chartered (StanChart) from 'buy' to 'neutral' on the back of the allegations of dealings with Iran by the emerging markets lender.Following the bank's interim results, StanChart was Nomura's preferred stock in the sub-sector and on the basis of fundamental equity analysis, that would still remain the case, the broker said on Tuesday morning."However, in the face of allegations by the New York State Dept. of Financial Services that Standard Chartered Bank (SCB, US subsidiary of Standard Chartered plc) engaged in unauthorised Iranian transactions, we see material headline risk and downgrade the stock to 'neutral'."Investec has hiked its target price for Diageo from 1,700p to 1,900p ahead of its preliminary results later this month, saying that the wine, spirits and beers group is set to deliver on year one of its three-year plan."Diageo were well on track to meet their new guidance targets as at Q3 and look set to announce a solid first year downpayment on their three year plan on August 23rd. We expect the promised 6% organic sales growth and c80 basis points of operating margin expansion," Investec said in a research note.UBS has maintained its 'neutral' rating for travel group Thomas Cook, saying that a robust top line is still not being reflected in profits."With the new management team now in place, the market is likely to look beyond current trading and focus on the long-term strategy," the broker said."On that note, there may be some disappointment that a full review will not be announced until the spring, meaning that visibility on likely restructuring costs, cost control, distribution strategy and long-term financing plans will remain limited."BC