Broker tips: Vodafone, Hargreaves, Tate & Lyle

9th Feb 2012 12:26

Nomura has reiterated its buy recommendation and 230p target price for telecoms giant Vodafone despite the firm's second quarter organic revenue growth coming in below expectations.Nevertheless, the group maintained its previous guidance for adjusted operating profits and free cash flow. "It may serve as some relief that operating profit guidance is reiterated following Verizon Wireless' weaker margin result and the potential for heavy iPhone subsidies to have also affected European margins," Nomura said.The broker does not expect any material revisions to consensus estimates and continues to see Vodafone as "a core holding for telecom investors, offering superior growth at attractive value".The interim results from investment firm Hargreaves Lansdown were bang in line with expectations, according to Peel Hunt. The broker, however, has reiterated its hold rating and 450p target price on the group, saying that the stock is trading a big premium to its peers."Although market conditions were challenging during the period, Hargreaves continues to deliver an impressive trading performance. New business in the period was £1.16bn, lower than the comparable year but a good performance nonetheless," said analyst Stuart DuncanHowever, Peel Hunt says that the stock is currently trading on an annualised "December 2012 EV/NOPAT" (enterprise value over net operating profit after tax) multiple of 17.2, well ahead of the wealth management sub-sector average of 12.3.In spite of the negative market reaction to Tate & Lyle's third quarter trading update on Thursday, Panmure Gordon has raised its target price for the stock from 645p to 690p, saying that there is "better visibility now on fiscal 2013"."Tate's Q3 IMS was pretty much exactly as expected, including the comment that the HFCS pricing round had been concluded successfully, with a modest increase in unit margins," the broker said.The broker kept a hold rating on the stock.BC