BEST OF THE BROKERS

RESOLUTION
JP Morgan has started coverage of the insurance group with an “underweight” rating and a target price of 254p. The broker believes the firm’s main strength is its excess capital that allows it to make purchases without equity financing, but adds that a share buyback would be more productive. It sees the earnings potential of the combined AXA / Friends Provident among the least attractive in the sector.

LLOYDS BANKING GROUP
Seymour Pierce rates the bank a “hold” with a target price of 72p. The broker believes there could be a trading bounce in the bank’s shares following the Irish bailout, given the 10 per cent drop in price in the last month due to the bank’s exposure to impaired loans linked to the country. However, it warns that the size of the bailout relative to the size of Ireland’s economy might be storing up trouble.

PUNCH TAVERNS
Shore Capital rates the leisure firm a “buy” with a target price of 60p. The broker outlines three options for the firm’s pubs held through securities vehicles, and believes the company is most likely to renegotiate the terms of the vehicles or attempt a capital injection such as a debt for equity swap. It adds that if the firm suggests it will not provide further cash support to the vehicles the share price is likely to rise.