UBS rates the oil major “buy” with a target price of 550p. The broker believes that BP’s 30 per cent stake in Indian explorer Reliance is worth $7.8bn (£4.8bn), slightly above the $7.2bn payment announced on Monday, and that the deal will raise BP’s gearing to around 16 per cent. UBS thinks the deal shows an aggressive reloading of exploration at the firm that will also add 93,000 barrels of oil a day to BP’s production figures.

Morgan Stanley rates the firm “equal-weight” and has raised its target price by 220p to £25.45. The broker predicts a cash return for investors as BAT’s net debt falls to around 1.5 times underlying earnings, with the possibility of further small acquisitions. Morgan Stanley views the stock as a consensus play on emerging market growth, with one of the strongest business models in global tobacco.

Nomura rates the transport group “neutral” with a lifted target price of £14.08. The broker has raised its 2011 earnings per share forecast by 12 per cent to reflect strong gains in the UK rail business, and expects the firm’s underlying revenue growth of three to four per cent outside London to at least continue as the cost of motoring rises. However, Nomura does not expect a dividend rise until cover hits around two times earnings.