Broker tips: Lloyds, RBS, Rightmove

Shares in banking group Lloyds edged higher on Friday after shareholders celebrated their first dividend payment in six years, though weaker-than-expected results prompted Shore Capital to retain a ‘hold’ rating on the stock.

The broker said: “Based on last night’s closing price of 78.5p, the shares are trading on a 43% premium to their end of December 2014 TNAV of 54.9p, with a prospective 2015 price-to-earnings ratio of 9.5x and dividend yield of 4.5% based on our current estimates. We see fair value around 80p (2% upside) and hence stick with our neutral stance.”

RBS’ share price was spending another day in the red on Friday after analysts reacted to the bank’s worse-than-expected 2014 results, with JPMorgan Cazenove cutting its price target on the stock from 400p to 385p.

The broker, which retained a ‘neutral’ rating on the shares, said upside is “limited” with the stock trading in line with its tangible net asset value, though “management have chosen a strategy that provides a clear path to returning cash to shareholders over time”.

Canaccord Genuity has upgraded its rating on real estate portal Rightmove from ‘hold’ to ‘buy’ after a better-than-expected set of annual results on Friday.

The broker has hiked its target price for the shares from 2,600p to 3,034p and said it still sees 13% potential upside to this new forecast. It said that OnTheMarket’s arrival has actually “benefitted” the company, “as it has weakened the potency of the second largest portal and Rightmove's biggest competitor, Zoopla”.