Broker tips: Cranswick, miners, Tullett Prebon

(ShareCast News) - Cranswick's shares were under the cosh on Monday as Numis downgraded the food producer's stock to 'hold' from 'add' and cut the target price to 2,311p from 2,536p.While the company last week revealed a strong set of first half results, Numis noted the market's increased wariness of consumer-related stocks.Revenue for the Yorkshire-based meat specialist of £580.8m was up 15.9% on the same period last year, while underlying revenue rose 8% and export were boosted by "particularly strong" sales to the Far East that surged 83%.The group's 'buy and build' strategy, which has been pursued for decades, will be continued and by 2018 Cranswick is aiming to process 60,000 pigs per week."Our target has though been reduced to reflect the mounting worries for consumer-linked stocks in 2017," Numis said."Rest assured though that Cranswick will remain very much a medium term winner." Citigroup adjusted its ratings on a number of mining stocks on Monday as it upgraded its view on the Western European metals and mining sector to 'bullish' from 'bearish'.The bank said it now sees a more robust outlook for next year for the commodity complex, especially the bulks, leading to cash flow and earnings upgrades along with higher forecast dividend yields."Moreover, short term, commodity prices have been firmer for longer this year which has resulted in substantial balance sheet repair for the miners. The miners also appear to be holding down capex for longer and the inflation pressures that we expected to build are being cushioned by weaker producer currencies against a stronger US dollar which is proving to be a fillip for the companies."It upgraded Anglo American to 'neutral' from 'sell' and lifted the price target to 1,350p from 830p, saying the upgrade was part of the much more positive overall sector view it has adopted."Caution around the near-term outlook for diamonds due to demonetisation in India and medium term outlook for platinum due to challenging auto catalyst outlook however remain."The target price increase is driven by significant earnings upgrades from higher commodity prices and a lower Australian dollar, which have also increased the net present value to 1,430 a share from 1,250p.The bank upgraded Glencore to 'buy' from 'neutral' and upped the price target to 330p from 220p as it pointed to the dividend reinstatement, strong cash generation and a solid commodity mix.Citi upped Rio Tinto to 'neutral' from 'sell' and pushed the target price to 3,300p from 2,550p."We expect strong 2H cash flow generation to drive gearing below the targeted 20-30% range by end-16 (17%), which opens the debate about capital management in 2017. Assuming a 50% payout ratio leaves $6bn of excess capital (more than 8% of market cap) that could be returned in 2017, with a further $2.6bn in 2018 (around 3.5% of market cap)."The bank changed its stance on South32 to 'buy' from 'sell' and lifted the price target to 200p from 140p. Tullett Prebon's shares fell on Monday as HSBC downgraded the inter-dealer money broker's stock to 'hold' from buy' but raised the target price to 480p from 460pThe share price has rallied more than 50% from lows in July following the Brexit vote as the company benefits from foreign exchange headwinds. Investors also see cost synergies and reduced broker compensation targets.Meanwhile, the company is still awaiting final regulatory approval for its merger with ICAP's Global Broking business. Tullett has said the approval should be granted year-end.HSBC said it had expected that all approvals would have been granted much earlier in the fourth quarter of 2016."We therefore think that it is time for management to deliver now in terms of final approvals as well as execution of merger and its promised cost synergies," the bank said.HSBC expects earnings per share of 36.94p in 2016, compared to a previous estimate of 20.27p, as it has removed IGBB revenues from its guidance..For 2017 HSBC has lifted its EPS forecast to 38.30p from 37.32p as it sees reduced broker compensation during this fiscal year. The new EPS guidance for 2016 is 9% above consensus forecasts while 2017 EPS estimate is 3% ahead."While still having above-consensus forecasts, we now see relatively limited upside of 8% for the shares despite several earnings upgrades in the past several months and therefore downgrade shares to Hold," said HSBC."We believe that dividend yield is a good reason to hold the shares but most of the promised merger benefits now seem to be in the price."