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BEST OF THE BROKERS

IMPERIAL TOBACCO
Nomura upgrades Imperial Tobacco to a “buy” rating from “neutral” and has a new, “conservatively realistic” price target of 2,000p, providing upside potential of 14 per cent. It said that although it has concerns over low- to medium-term underlying profit growth these are reflected in the current price.

ANGLO AMERICAN
UBS retains a “buy” recommendation for Anglo American and said it believes Anglo’s earnings before interest and tax margins will improve after its remaining divestments. UBS believes that plans to sell industrial minerals, industries and zinc assets will bring in a net cash inflow of $6.9bn and will reduce Anglo’s net debt.

ROYAL & SUN ALLIANCE
Morgan Stanley’s analysis of UK financial firms returns suggests earnings risk is greater for Royal & Sun Alliance (RSA) than it thought. Morgan Stanley has downgraded RSA to “underweight” with a 133p price target and said the stock’s defensiveness could support the share price near term but it sees better value in rivals.

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