BEST OF THE BROKERS

SMITHS GROUP
RBS rates the technology group as a “buy”, and raises its target price from 1,300p to 1,600p. The broker says that if the Group was broken up and its businesses sold, it would estimate a value of 1,804p in the absence of any tax liabilities. It therefore says that a break-up valuation is the best way to proceed, and raises its pricing accordingly.

SERCO
The front-line service provider is rated as a “buy” by Killik & Co, which says the group is well placed to win government contracts as investment in infratructure and pubic services increases. As shares have performed poorly in recent month due to uncertainty over public sector cuts, Killik & Co sees a good opportunity to buy at a target price of 557p.

RENEWABLE ENERGY GROUP
Evolution Securities rates the on-shore wind farm developer as a “buy” following its rejection of a 67.7p per share bid, which the broker says undervalues its operational assets and developmental pipeline. It expects REG’s value to rise everytime it announces a planning win, and assigns it a target price of 82p.