Broker tips: Tesco, ARM, DS Smith

5th Jun 2013 11:03

Tesco's first-quarter results may have failed to enthuse the market on Wednesday but Nomura remained upbeat with a 'buy' rating on the stock, saying that a mixed performance masked the underlying progress made at the supermarket group.While the performance in the UK was a little worse than expected, international sales figures were in-line to slightly better. Nomura said that it would make no changes to its profit forecasts, explaining that "quarterly volatility is to be expected in the context of a multi-year strategy to deliver double-digit total shareholder returns".Bank of America Merrill Lynch (BofA) reiterated its 'buy' rating and 1,372p target price for chip designer ARM Holdings on Wednesday morning, following a confident presentation from the company at the bank's global tech conference.The broker said that the recent weakness in the stock - down around 15% over the past two weeks - should be seen as a buying opportunity "as we believe that ARM's ecosystem is likely to prevail long term."Goldman Sachs has cut its recommendation for packaging company DS Smith from 'buy' to 'neutral' following stock's recent share price run.The broker has made no changes to its estimates and remains positive on the company's "opportunity to improve the returns profile". "However, following a period of outperformance, we currently see upside of 15% to our six-month target price of 278p, which is in line with the median upside of 13% in our mid-cap coverage currently."