Broker tips: RBS, St James's Place, Supergroup, Henderson

Third-quarter profits from RBS were well-received by the stock market in London on Friday, though brokers remained divided over how to recommend the stock to investors. Analysts warned that, despite the progress made in the third quarter, one-off costs will continue to be a drag on RBS' bottom line going forward.

Shore Capital kept a 'hold' rating on the stock, saying that while the bank is "clearly seeing good momentum", the unresolved conduct and litigation risks "cannot be ignored". Hargreaves Lansdown Stockbrokers also said that "a number of issues remain unresolved", such as the conduct and litigation issues which "will continue to be costly, time-consuming and distracting". There are also restructuring costs to be considered, he said.

St James's Place's share price was extending gains on Friday after a strong third-quarter update the previous session, with Barclays Capital providing a boost after naming the wealth manager as its top pick within the European insurance sector.

"Throughout SJP's recent period of underperformance, we continued to see its underlying fundamental drivers as undiminished," said Barclays analysts Alan Devlin and Chris Roberts.

The market had factored in some bad news ahead of Supergroup's profit warning on Friday, "but the quantum of the downgrade is greater than feared", according to Oriel Securities.

The broker retained its 'reduce' rating on the stock with a 760p target price, saying that the fashion retailer's "fanatical adoption" of a strategy to sell stock at full prices is inappropriate.

Citigroup has highlighted an "attractive entry price" for potential investors of investment management firm Henderson Group, as it upgraded its rating on the stock from 'neutral' to 'buy'.

Despite predicting a tougher fourth quarter, Citi analysts believes that flows are still positive and the company is "now demonstrating consistent ability to outperform the market on this measure".