Broker tips: Standard Chartered, Fresnillo, Meggitt, Serco

6th Aug 2014 12:57

Investec says Standard Chartered coped well with a difficult first half of the year and is "still probably the best bank in the world". The broker acknowledges that 2014 "may not be a stellar year", but it expects a kick-start for revenue-led growth in the second half of the year and beyond. It kept a 'buy' rating and 1,450p target price for the stock.Credit Suisse has upgraded Fresnillo from 'underperform' to 'neutral', saying the precious metals miner should recover after a "rough patch".The bank said that the "storm is over" now for Fresnillo, as its hiked its target price for the shares from 646.91p to 900p. "After a strong investment cycle, Fresnillo is getting to the sweet spot of growth delivery, we estimate the surge of cash flows by 2016. Investec has downgraded its rating for aerospace engineer Meggitt from 'add' to 'hold' and slashed its target price from 530p to 480p "following a rough landing in the first half"."Meggitt's disappointing first half has likely shaken investor confidence (again). A number of Meggitt's end markets have stabilised or shown signs of growth, but these have not sufficiently boosted revenues or orders," Investec said.Serco's shares were under pressure on Wednesday after Numis Securities cut its recommendation for the outsourcing group from 'hold' to 'reduce', saying that the market was already pricing in a "significant operational turnaround" at the company after new chief executive Rupert Soames started in May."In our opinion, significant risks still exist to short-medium term forecasts (both operationally and from a probable rights issue) and it will take a considerable length of time to stabilise a business that has seen huge staff turnover, and very significant contract attrition, before any sort of recovery can be delivered," Numis said.BC