Broker tips: Glencore Xstrata, Tesco, ARM Holdings...

14th Apr 2014 12:11

Investec has kept a 'reduce' rating on Glencore Xstrata but said that the 5.85bn-dollar sale price of its Las Bambas copper project in Peru was ahead of its 5.5bn-dollar forecast."Until the transaction is finalised, we would expect Glencore Xstrata to be cautious on advancing new significant transactions in order to ensure the company's credit rating remains unchanged and the balance sheet doesn't come under undue pressure, particularly against the background of volatile commodity pricing," said Analyst Marc Elliott.'Sell' shares of Tesco ahead of the supermarket giant's annual results on Wednesday, according to Shore Capital, which expects a sharp fall in profits."We approach the 2013/14F preliminary results with considerable concern for Tesco's shareholders, which must and should be a material discomfort to the Chairman and Chief Executive of the group. "The current rate of sales contraction in the UK leads us to be worried about the robustness of our 2014/15 forecasts even before we reach the first-quarter update."Credit Suisse has hiked its target price for chip designer ARM Holdings from 1,050p to 1,200p and reiterated its 'outperform' rating ahead of the company's first-quarter results on April 23rd.The bank thinks that ARM's revenue and earnings will increase at compound annual growth rates of 15% and 23% over 2013-2016, respectively. This growth will be driven by the "rising level of content in smartphones/tablets, limited market share loss, and increasing traction in Networking".Ashmore and Henderson are the two most expensive asset managers, according to UBS, which downgraded its rating on the former from 'buy' to 'neutral' on Monday.UBS said it remains positive on Ashmore's fundamentals, though "the valuation is now demanding for an asset class that we feel has stabilised but continues to have a subdued short-term outlook". Henderson, however, remains a 'buy' and stays on the bank's Most Preferred list as it continues to be in the "sweet spot" with flow momentum positive in Europe.BC