BEST OF THE BROKERS

LOGICA
Logica continues to trade at a material discount to its IT services peers, according to Standard & Poor’s. The analysts believe investors have overreacted to the threat of cuts in the UK public sector, and that the gap will close. S&P has trimmed its sales estimates by three per cent, but reiterates its “buy” rating.

ROYAL BANK OF SCOTLAND
Seymour Pierce upgrades its rating to “underperform” with a target price of 47p, saying the bank has proved doubters wrong. RBS expanded interest margins by 11 basis points in the second quarter. However, the broker questions whether the government can sell the bank at a large premium to book value.

CATLIN
Execution Noble says to look past Catlin’s disappointing first half results to its strong underlying performance. The broker is pleased with the Lloyd’s insurer’s improvement in earnings momentum, and says excluding currency changes its book value grew five per cent in the last six months. “Buy.”