Broker tips: HSBC, Prudential, Experian, Sports Direct

Citigroup upgraded HSBC to ‘buy’ from ‘neutral’ and lifted the price target to 635p from 625p, noting that the stock is trading close to the low end of its valuation range over the past five and 10 years.

“Reflecting the improvement to capital ratios from upcoming divestments and also recent stock price weakness, we raise HSBC to buy,” it said.

It also said that US interest rates are likely to start rising from September 2015 and HSBC will at last begin to benefit from its attractive deposit base.

Jefferies downgraded Prudential to ‘hold’ from ‘buy’ and cut the price target to 1,753p from 1,802p to accommodate for the company's less certain growth outlook.

Jefferies said the company’s growth profile will likely be under scrutiny over the coming quarters with recent management dislocation coinciding with downside risks to growth in the core territories. It pointed to the Chinese equity market correction, the Indonesian economy, US fiduciary requirements and solvency II in the UK.

Shore Capital has downgraded Experian from ‘buy’ to ‘hold’ reflecting concerns over its marketing vision.

The broker retained a price target of 1215p. Analyst Robin Speakman said the data services firm’s first quarter performance was as expected and said margins would remain stable.

“Looking at the mix of growth moving forward, with particular challenges in the US Consumer business - taking longer to get back to growth than previously expected - we see continued pressure on short-term forecasts,” he said in a note to clients.

Sports Direct International got a boost as Exane BNP Paribas lifted its target price on the stock to 860p from 800p.

Exane said it continues to value Sports Direct at a premium of around 5% to the sector given the quality of the UK business, strong earnings growth profile and optionality of European expansion.