Broker tips: Tesco, HSBC, Tullow Oil

5th Dec 2012 11:16

Nomura has cut its forecasts for supermarket giant Tesco on the back of a weaker trading in Europe, but has maintained its 'buy' rating, hailing the group's strong UK grocery performance.The broker also said that the company's strategic review in the US "points to a management team willing to act decisively to improve its capital allocation and discipline." Nomura reckons that a US exit will benefit full-year EPS and return on capital employed (ROCE) by 4% and one percentage point, respectively.Investec has reiterated its 'buy' rating for global banking giant HSBC, saying that the disposal of its stake in Chinese insurer Ping An could bode well for the 2012 dividend.The broker said that the disposal proceeds should be sufficient enough for HSBC to raise its final dividend per share (DPS) to 18 cents, above the current consensus estimate of 16 cents. This would bring the full-year DPS to 45 cents, compared with the 43 cents forecast.Credit Suisse has cut its target price for Tullow Oil from 1,650p to 1,550p following Tuesday's news that the no commercial hydrocarbons were found at the Zaedyus-2 appraisal well, offshore French Guiana.Nevertheless, the broker maintained its 'outperform' rating on the stock, saying that it continued to back Tullow given its long standing track record in exploration.However, analysts said that the market is likely to adjust the implied risk weighting for its portfolio "especially following a period of relatively less successful drilling since mid-2012 and the lack of material newsflow in the near term."BC