Broker tips: HSBC, Bovis Homes, Rightmove

HSBC´s management made good progress in 'right-sizing' the lender´s operations given the current capital regime and the bank continued to be well-capitalised under the new basel framework for regulatory capital, Canaccord Genuity explained to clients in a note on Monday.Nonetheless, the broker cut its fiscal year 2014 earnings per share estimate by 18% due to lower forecasts for revenues. Revenue might also continue to be under pressure due to volatility in emerging markets. In particular, the analysts highlighted the still elevated cost/income ratio to be seen in Europe, which stood at 84% at the end of 2013. It came as net interest income slipped 9% over the year, dragged down by low interest rates and the current macroeconomic landscape. The bank's quarterly dividend, at 18 cents, made for an increase of 28% versus the fourth quarter of 2012, but was nevertheless below Canaccord's higher than consensus expectations. As a result of all the above they retained their 'buy' recommendation on the shares, but reduced their target price to 750p from 825p previously. The target price was derived via the return-on-equity (ROE) versus price-to-book-value (PBV) approach. The cut was led by slower growth in net asset values (NAV) given their rebased estimates. Broker Panmure Gordon upgraded its profit and price forecasts for Bovis Homes, saying the house-builder's annual results were excellent.Bovis on Monday said strong demand had fuelled a 48% increase in pre-tax profit in the year to December 31st to £78.8m from £53.2m a year ago on a 31% lift in revenue to £556m.It attributed the increase to strong demand as the UK's housing market recovers and switches to building bigger homes in southern England.Panmure said it now expected Bovis to report 2014 profits of £119.6m, up from its previous forecast of £115.1m.It also raised its price target on the stock to 923p from 900p and kept its 'buy' recommendation."These are excellent results, with increases in volumes, prices and margins," Panmure said.Property website Rightmove has a very clear business model and is benefitting from two favourable tailwinds; namely the secular shift towards online property advertising and the positive impact which the housing market recovery is having on advertisers, analysts at at Canaccord Genuity pointed out on Monday. However, its shares were up by 57% over the year, by 7% on the month and were just 8% below the broker's 'business-as-usual' 3,000p October target price.For the above reasons the broker opted on Monday to downgrade the stock to 'hold' from 'buy', even while maintaining its price target of 3,000p.As well, in 2015 Rightmove and Zoopla would be challenged by Agents' Mutual, these analysts pointed out, which according to recent press reports had signed up 1,830 estate agents offices on an exclusive basis, with a similar number having registered interest. The company was due to report its fiscal year 2013 results on February 28th, with expectations that it was set to comment on its pricing policy and prospects for the year ahead. Rightmove´s target for fiscal year 2013 average revenues per advertiser (ARPA) was £600 per month.AB