Broker tips: Jupiter Fund Management, Ladbrokes, GSK

(ShareCast News) - RBC Capital Markets has upgraded Jupiter Fund Management as it believes current forecasts underestimate the group's inflows and capital returns.After Monday's trading update, RBC's new 'outperform' rating, up from the previous 'sector perform', is accompanied by a 3% increase in the target price to 475p.With a diversification strategy in place, the Canadian bank thinks net flow forecasts "could be conservative" and it expects Jupiter to return a huge chunk of its current market value to shareholders by the end of the 2017 financial year.Forecasts for earnings per share are increased 1% for the current year, based on updated assets under management calculations after the flows and investment performance announced in Monday's results, while both 2016 and 2017 EPS are lifted 4%, while the changes to SICAV fees could be further profit-enhancing over time."Shareholders should continue to benefit from attractive returns," RBC analysts said, estimating a total dividend yield of 6% based on our 2015 forecast, which is among the highest in the sector."Further we estimate that Jupiter could return ~20% of its current market value to shareholders through 2017.""Our expectation for fairly flat net inflows going forward is achievable and could even be conservative given Jupiter's strong brand name and diversification efforts by product, geography and client type. " Citigroup upgraded Ladbrokes to 'neutral' from 'sell' and raised its price target to 110p from 100p, saying the shares have now fallen far enough.It said the new target price represents the mid-point between the upside potential it sees under a deal scenario and the downside risk under a no-deal scenario.Citi estimated the share price upside potential from a merger with Gala Coral at around 30% and the downside risk if no deal emerged also at around 30%."The competition authority investigation will rumble on for several more months, dampening any need to take a strong view in the shorter term," the analysts said.Citi added that the two key catalysts that could drive a more positive view were trading updates citing an online pick-up, with a rise in active customers and net gaming revenues, and CMA deal clearance arriving earlier than the bank's mid-2016 expectation. JPMorgan Cazenove upgraded GlaxoSmithKline to 'neutral' from 'underweight' and lifted the price target to 1,370p from 1,320p.The bank noted that medium-term consensus earnings per share estimates have fallen 15-18% year-to-date and expectations now look achievable, with downgrades no longer a concern.In addition, it said a pipeline review suggests the company's upcoming research and development day has a positive risk/reward.JPM said expectations are low heading into the R&D day, due to historical pipeline setbacks, and limited disclosure."We don't anticipate big upgrades , but we expect the event to be supportive, potentially increasing appreciation of the early-stage pipeline and partnered assets," it said. It expects a focus on oncology epigenetics, which involves turning off cancer genes, and very early stage immuno-oncology projects.Finally, JPM said the 6% dividend yield provides near-term support.