Broker tips: Standard Life, Inchcape, House builders

13th Mar 2012 12:16

While Panmure Gordon says that Standard Life's full-year results were good and ahead of expectations, the broker had downgraded its rating on the insurance giant from buy to hold."We turned buyers of Standard Life following better than anticipated interim results in August and on the basis that the shares had been oversold. Since then, the shares have rallied 37% in absolute terms and are now trading in line with our 240p target price ," said analyst Barrie Cornes.With the shares are trading at a 25% discount to 2011 enterprise value with a 5.8% dividend yield, the broker believes that there is better value elsewhere in the life sector. Nomura has reiterated its neutral rating and 390p target price on car retailer and distributor Inchcape, saying that while the results were broadly in line with expectations, there are some concerns over the global economic environment.The broker says that management sounded cautious over the outlook in the EU, with concerns still surrounding Greece, Belgium and the UK. Thailand flood-related supply issues continue to have an impact also."We continue to see the group well positioned for a macro recovery in the medium term. However, given the strong share price performance year-to-date, and continuing macro uncertainty, we maintain our neutral rating on the shares," the broker said. The house builders were performing well on Tuesday morning, a day after NewBuy was launched. Credit Suisse has maintained its positive view on the sector today despite its recent strong performance, saying that the government's scheme is an 'incremental positive' to its investment thesis."The government expects NewBuy to assist in the creation of 100,000 new homes (roughly equal to 100% of the current annual production rate)," Credit Suisse notes. While the broker thinks that this target is unrealistic, just a small fraction of it would have a material (positive) impact on 2012-2013 earnings per share (EPS) targets for the house building industry. It has raised its market volume forecasts for 2012-2013 to 4-6% (from estimates of no growth previously) and upped its market price estimates to 1-2% (from no growth).It expects average EPS growth of around 40% for the sector over the next two years and sees this as the share-price driver. The key outperform ratings are for Persimmon, Taylor Wimpey and Bellway.BC