Investec downgrades RBS to 'sell' ahead of results

20th Feb 2014 09:13

Investec has downgraded its rating for RBS from 'hold' to 'sell', recommending investors to short the stock ahead of the bank's 2013 results due on February 27th. "After the last RBS share price correction, we recommended taking profits/closing short positions," said Analyst Ian Gordon, referring to a report he published on January 27th."However, the shares have once again spiked by 8%, sharply outperforming the FTSE 100 and the rest of the UK banking sector. We detect some misplaced euphoria ahead of results," he said.Gordon said that the stock now trades at a price-to-tangible net asset value (tNAV) ratio of 1.0, compared with Barclays at 0.9, "so we see no valuation support".The analyst believes that there is downside risk to his forecast for a 2013 attributable loss of £7.3bn given the company's signalled acceleration of non-core disposals in the fourth quarter.The target price for the shares has been left at 345p.RBS was trading 1.4% lower at 354.23p by 09:07 on Thursday.BC