Broker tips: Vodafone, Serco, SABMiller

Deutsche Bank has upgraded its rating for Vodafone from 'hold' to 'buy', saying that a takeover of Kabel Deutschland (KDG) could push the British telecoms group towards potential value crystallisation."We think a KDG deal, consistent with our convergent thesis, is likely the tipping point for a Verizon Wireless (VZW) deal. Leverage is now high, and VOD needs to preserve liquidity for its European turnaround. Furthermore there is value maximisation to consider with US competition getting tougher. With a deal looking more probable and consensus having rebased after a tough H2, we upgrade to 'buy'."Investec has maintained its 'sell' rating and 550p target price for outsourcing group Serco in spite of a well-received trading update on Friday, saying that it is concerned about trading going into the second half."With no inorganic support from acquisitions, and a reduced level of contract wins in 2013 so far, we are cautious into the second half. At c14x FY13E price-to-earnings, Serco trades at a discount to the outsourcing sub-sector, but just north of 4.0% headline forecast organic growth is underwhelming sector relative, and with margins and cash under pressure, and further exposure to rebid risk on the horizon, we remain cautious."Nomura has reduced its target price for beverages giant SABMiller from 3,450p to 3,300p and retained its 'neutral' recommendation for the stock ahead of its first-quarter trading statement on July 25th.The broker reckons that SABMiller shares are currently up with events with the stock trading at 17.5 times prospective earnings, well ahead of the beer-sector average multiple of 15.2. "Although we still see a strong long-term growth story, valuation is looking quite full, and we expect some consolidation of the shares at the current level."