Broker tips: Lloyds, British Land, Micro Focus

UBS has adjusted its price target for Lloyds Banking Group to account for its ex-rights status.The Swiss broker said forecasts are largely unchanged since its last look at the end of November, which followed confirmation of the cash call and enhanced capital note (ECN) conversion terms.It keeps its Buy/Medium Risk rating and ex-rights 2010 price target of 69p, but makes adjustments to the balance sheet.'We see both medium-/long-term value based on improving fundamentals and the current valuation, as well as the possibility of a near-term rally,' said UBS. 'The heaviest selling of nil-paid rights seen at the start of the rights issue came from retail networks and has tailed-off, we believe.''The stock could bounce strongly once the rump placement completes on 14 December, or possibly sooner.'It says the underlying margin and credit momentum is strong, so a moderate double-dip recession and/or more expensive debt refinancing would 'delay but not derail the return to a valuation based on the long-term fundamentals.'Even if this process takes five years and not the three the broker predicts 'the stock is still attractive'.US bank JPMorgan Chase (JPM) is looking forward to a return to dull normality for the property sector in 2010 after its strong recovery since March.'The rally is over, but we see 12% total return for 2010,' predicts the JPM property research team. 'Our detailed 2010 roadmap indicates that property stocks are currently in their sweet spot, resulting in positive news flow on pricing, rents and acquisitions into 1Q2010 [first quarter of 2010],' JPM said, though it acknowledges that this momentum will begin to fade.Sector performance is likely to feature some corrections, 'resulting in attractive entry points to the sector'. JPM has highlighted British Land as one of its preferred plays in the sector. Legacy software specialist Micro Focus has been indicating for some time now how well its recent acquisitions have been performing but this morning's better than expected contribution from Borland and Compuware still caught the market a little by surprise.'Micro Focus has performed stunningly in turning Borland and Compuware around, taking two underperforming businesses (Borland loss making, Compuware 7% operating margin) and getting them to a combined 35% EBITDA [earnings before interest, tax, depreciation and amortisation] margin in six months,' enthuses Charles Stanley analyst Ian Mitchelll.Mitchell thinks there is more juice to be squeezed from these additions to the Micro Focus portfolio with 'further cost cutting and potential cross selling' on the agenda.The broker is upgrading its forecasts, and is now predicting full year EBITDA of $166m for fiscal 2010, up from $160m previously. Its price target remains unchanged at 570p.