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Broker spotlight: Scotland, RBS, Standard Life, Merlin, Orosur Mining...

Standard Life to benefit from Scottish vote, but not much in it for RBS or TSB, Merlin gets price upgrade after strong summer.

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After the Scottish decision to stay with the UK, some brokers were quick off the mark to update their views of companies north of the border.

Investec said it expected RBS (LON:RBS) and TSB (LON:TSB) shares to have a rally today but after that there was little further upside. Lloyds (LON:LLOY) remains its preferred ‘Scottish’ bank on fundamentals, it added, and is a 'buy'.

Deutsche Bank, meanwhile,  suggested that for the life insurers the outcome will mean almost as much change as a yes vote and it sees the UK shifting towards a federal model.

It rates Standard Life (LON:SL.) as a buy, target 455p as the main insurance beneficiary of the no vote, though it noted share prices of UK life assurers were not that affected by pre-vote speculation.

Standard Life rose ahead of the vote despite its obvious Scottish associations, but with the uncertainty now lifting the broker expects its shares to push higher.

St James’s Place (LON:STJ) is also a buy for the German broker (target 925p) as it is the most geared to any improvement in UK market sentiment now that uncertainty over the Scotland is removed.

Elsewhere in insurance, Deutsche has upgraded Hiscox (LON:HSX) to hold, noting that the share price has fallen below its target price for the first time in a while.

Credit Suisse has raised its price target for Merlin Entertainments (LON:MERL), the owner of Legoland and Madame Tussauds.

Merlin is a long dated growth story, the broker added, with capacity to generate strong returns on new investment and potential upside from its resort accommodation strategy; good like-for-like growth this year and a better than forecast recovery at Gardaland in 2015.

The new target price is 400p (from 380p), but Credit Suisse retains a 'neutral' view.

Canaccord has raised its stance on defence equipment group Chemring (LON:CHG) after its third quarter trading statement indicated the end of a major balance sheet restructuring.

The revolving credit facility is now £70mln, down from £230mln, and a more appropriate level appropriate for a business generating £400mln in sales said the broker.

Despite low visibility on future orders, increasing global geo-political tensions also look set to provide positive momentum, according to the broker, as it raised its target price to 225p (from 160p) and its rating to ‘hold’ from ‘sell’.

UBS thinks airline easyJet (LON:EZJ) has an increased likelihood of capital returns going forward after the ordinary pay-out ratio was increased from a third to 40% yesterday.

Investors can expect special dividends, perhaps even with the annual results in November, said UBS, which said the gearing target of 15-30% is a likely guide for as and when easyJet is likely to return capital. Hold with a 1,930p price target, it concluded.

Gold miner Orosur Mining (LON:OMI) has made a solid start to its new financial year with first quarter production and costs in-line with full year guidance, said Cantor Fitzgerald.

Shares, though, trade at a notable discount to its peer group across a host of metrics. Given the excellent performance last year, and the solid start made to the current year, Cantor believes this is unjustified and it has a 'buy' recommendation and target price of 32p.

Med tech group ANGLE’s (LON:AGL) latest collaboration, with the University of Southern California in breast cancer, is part of its strategy to  get the support of key opinion leaders in the field of cancer research, particularly those in the United States, said Cenkos.

“We believe that the Parsortix technology will be able to drive forward cancer diagnostics and enable the status of a patient’s disease to be determined in a non-invasive and efficient way.”  Buy, said Cenkos.

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