Broker tips: Shell, TSB, Pets at Home
Recent falls in the share price of Royal Dutch Shell mean that the oil major is now worth a 'buy', according to UBS which removed its 'neutral' rating on the stock on Friday.
"We contend that the sell-off of in energy shares has been fairly indiscriminate and provides an attractive entry point for an improving long-term investment case such as Shell with relatively robust earnings/cash flows and good downside protection provided by the dividend," UBS said.
Investec has repeated its 'buy' recommendation for TSB after a decent third quarter from the challenger bank, with the broker reiterating its excitement about prospects for "mortgage-led growth" in 2015.
Analyst Ian Gordon pointed out that TSB's shares have fallen 12% over the past 10 weeks, compared with declines of just 4-5% for the other listed domestic banks, and is now regarded as "oversold". While not his top pick in the sector, Investec analyst Ian Gordon said TSB is a "defensive, low-risk alternative investment".
A second-quarter update from pet shop chain Pets at Home was received well by the market on Friday, though analysts at Oriel Securities kept a 'reduce' rating on the stock, recommending investors to "sell into any strength".
"The shares have been weak and may bounce on the back of this stronger-than-expected trading. However we continue to believe that the valuation does not reflect the strategic issues here and with the yield no bigger than the sector average, the shares make limited appeal," Oriel said.