Citigroup upgrades Cable & Wireless (C&W) to “buy” saying the shares, which underperformed in 2009, are due to be re-rated this year. It expects confidence to improve post the March demerger, which it believes will reveal “hidden value”. “Structural and macro recovery in 2010 should raise confidence that consensus is now at a floor and drive a re-rating,” it adds.

RBS upgrades HSBC to “buy” saying its geographical diversification and size gives the bank a funding cost advantage, as well as creating a solid platform for profit once short term interest rates rise. It expects group earnings to “almost treble” between now and 2012. It says its “risk reducing funding profile” is also a plus. “HSBC should trade towards its long term average valuation multiples,” it says.

JP Morgan upgrades pharmaceutical company Shire to “overweight” due to management’s bullish comments on the initial uptake of its Intuniv drug. It believes it will be a key factor prompting earnings upgrades, and calculates the drug could grow its initial one per cent market share to five per cent at peak. The drug’s “long term growth potential is still underappreciated,” it says.