Broker tips: HSBC, Anglo Pacific, Pearson

(Sharecast News) - Analysts at Berenberg raised their target price on lender HSBC from 560.0p to 625.0p on Tuesday, stating the group's recent second-quarter earnings saw the company deliver "a clean enough sweep". Berenberg said HSBC's Q2 earnings were "consistently strong", with revenues and costs 2% and 4% better than consensus expectations, respectively, while loan losses also remained "benign".

The German bank also noted that HSBC had achieved "robust revenue growth" in each of its main business lines, and by 12% year-on-year overall.

"While our estimates largely captured HSBC's improved revenue guidance, we have become incrementally more confident in HSBC's ability to achieve this growth alongside stable costs," said the analysts.

"Moreover, weaknesses in HSBC's capital are cyclical, not structural, such that the bank's long-term capital return potential has, if anything, increased."

Berenberg reiterated its 'hold' rating on the stock.

Analysts at RBC Capital Markets moved their target price on mining giant Anglo Pacific slightly lower on Tuesday, citing near-term dilution, cutting its target for the stock from 340.0p per share to 320.0p.

RBC Capital Markets said Anglo Pacific's $200.0m royalty package acquisition from South32 had transformed the longer-term revenue profile for the group by roughly 50%, had improves its ESG positioning by adding more copper and nickel, and had also mitigated the rollover in income post Kestrel.

"The transaction is dilutive in the near-term, but we think med-term this 'cost' is outweighed by the benefits listed above," said the Canadian bank, which also reiterated its 'outperform' rating on the stock.

"We see this deal increasing the attractiveness of the equity, and considering APF remains discounted vs peers we continue to see scope for further rerating. We move our P/NAV target multiple to 1.4x NAV (prev 1.3x) to reflect the improved portfolio. Although softer metals prices are a headwind, upcoming potential catalysts like Piaui/Incoa financing and Voisey's Bay underground ramp up, together with additional deals, are likely to allow APF to continue to re-rate."

Analysts at Deutsche Bank reiterated their 'buy' recommendation for shares of Pearson, labelling the publishing and education outfit's latest interim numbers "reassuring".

In particular, Deutsche Bank noted the company's "solid" operational performance, targets for efficiency improvements and confirmation of its full-year guidance.

DB also said that growth in Pearson+ users, new feature additions and early progress in building out its Workforce Skills offering were "also encouraging".

However, despite Pearson's growth and "tangible" strategic progress, on an estimated 18.0x 2022 consensus estimates for its price-to-earnings multiples, the shares were trading in line with their two-year average, albeit at a discount to the average peer multiple of 24.

The analysts stood by their 900.0p target price and 'buy' recommendation.