Broker tips: Tesco, Standard Chartered, Recruiters

8th Dec 2011 11:17

Today's update from Tesco has prompted a mixed reaction from brokers Nomura and Evolution Securities, who have given contrasting assessments of the supermarket chain's third quarter figures.Nomura is generally pleased with the statement, saying that the figures came in line with expectations. The broker highlights improving non-food like-for-like (LFL) sales and positive electricals LFL sales, as well as in-line international LFL numbers. Nomura kept a buy rating on the stock with a 500p target price.Evolution, however, has reiterated its reduce recommendation on the company, saying that the statement is "yet again disappointing in its content." The broker claims that the firm's performance has been subdued and notes a "clear lack of momentum going into Christmas". A 350p target is given.Nomura stays confident over prospects for emerging markets-focused bank Standard Chartered, saying that the overall message in the pre-close trading update is "relatively encouraging to us in the current global environment."The broker says that while the valuation - shares trading at 11.5 times current earnings - is at a significant premium to developed market banks, "these premiums as likely to be sustained given the fewer uncertainties we see in the group's main markets and its longer-term growth prospects."A buy rating and 1,800p target are retained.After two recent updates from recruiters confirmed a marked slowdown in the fourth quarter, Investec has reassessed its forecasts for the sector.Investec has cut its target prices for sector peers Michael Page (from 400p to 370p), Hays (from 100p to 85p) and Robert Walters (from 310p to 250p). Investec had recently cut its forecasts for SThree, whose target price it has kept at 305p.Nevertheless, the broker keeps a buy rating on the four stocks, saying that the market has already factored in a sharp slowdown. "Short term prospects remain very difficult, but we believe that the underlying structural investment case remains intact."BC