BEST OF THE BROKERS

AVIVA
Morgan Stanley rates the insurance group as “equal weight” with a target price of 445p, after the company’s third quarter metrics for 2011 showed continued progress, particularly in its non-life operations. However, the broker says Aviva’s IGD coverage was surprisingly weak, especially after the recent hybrid bond call. While it sees Aviva’s capital position as robust, Morgan Stanley says the shares are unlikely to be re-rated in the current environment.

BHP BILLITON
Goldman Sachs rates the mining giant as a “buy” with a target price of 3,100p after a petroleum investor briefing that focused on the company’s strategy for its US onshore portfolio. The broker sees the portfolio as one of BHP’s long-life, high growth and politically low-risk assets, and says it is undervalued by the market. However, key risks could come from weaker commodity prices and a weaker US dollar.

NATIONAL GRID
Citi rates the UK utilities company as “neutral” with a target price of 610p ahead of first-half results on 17 November. The broker predicts operating profit of £1,442m, down four per cent, and earning per share of 18.9p, down seven per cent. Citi says negative timing differences that will impact revenues in the US businesses should be offset by higher inflation driving the revenue in the UK businesses as RPI is applied to tariffs.