Broker tips: Credit Suisse, Inmarsat, Renishaw

Stay the course through light turbulence for base metals and bulk commodities, RBC Capital Markets urged as its analysts upgraded ratings on Glencore and BHP Billiton.

The global economy is on a strong footing and will continue to drive demand for metals, the analysts said. Short-term volatility could provide buying opportunities for those prepared to stick the course, they added.

Some warning signs have emerged for copper and iron ore with copper inventories rising but potential labour disruption could be a catalyst for a multiyear copper rally. Investors should add to copper positions at attractive valuations and gold to hedge against volatility, RBC said.

RBC upgraded Glencore to 'top pick' from 'outperform' because the miner and commodities trader is a compelling exposure through a weaker overall environment. The analysts also upgraded BHP Billiton to 'sector perform' from 'underweight' and kept their 'outperform' rating on Anglo American. Rio Tinto also remained as a 'sector perform' share.

The analysts shaved 10p off their Glencore price target to £4.60 but made bigger cuts to their target for Anglo American, £19.50 from £22, and Rio Tinto, £39 from £42. They trimmed the price target for BHP Billiton to £14 from £14.50.

Analysts at Credit Suisse slashed their target price for shares of satellite communications provider Inmarsat to reflect a more "cautious" outlook for government spending.

Although they described the company's fourth-quarter figures as "solid", highlighting the resumption of top-line growth at Maritime and "re-assuring" medium-term guidance for growth, they pointed out how consensus estimates for the firm's operating profits had been marked-down sharply.

That, they believed, was the result of concerns about the medium-term outlook for growth in Inmarsat's public sector revenues and a sustained lack of visibility around its in-flight connectivity or IFC.

Nonetheless, "modest revenue headwinds in Government from 2018 could be at least partly offset by future contract wins & short-term operational revenue. Over 2018 we also expect Inmarsat's IFC airtime revenue to finally begin generating material revenue as aircraft installations accelerate," they said.

Furthermore, the company's competitive advantage in its core Maritime and Aviation markets remained unscathed.

"Material consensus earnings downgrades over the past 2 years, in our view, have been driven more by rising success-based costs and a delay to IFC revenue than any structural deterioration in Inmarsat's competitive position-reinforced by long-term contract wins in Maritime and Aviation IFC," they explained.

All-in-all, they lowered their target on the shares from 810p to 610p, but stayed at 'outperform'.

Factory equipment manufacturer Renishaw is going to be the fastest growing company in European capital goods sector over the next three years and catapult itself into the FTSE 100, said Goldman Sachs as it initiated coverage on Wednesday.

Renishaw, whose devices and sensors are used in factory automation for highly accurate measurements of products and the calibration of machine tools, was given a 'buy' rating by based on Goldman's target price of 5,500p.

Analysts pointed out that the 50% sell-rated consensus and concerns associated with the firm's margin potential and valuation were "unwarranted".

Analyst Jack O'Brien argued that Renishaw's sector premium was, in fact, justified in light of Renishaw's speed of growth and potential as a M&A target.

O'Brien highlighted Renishaw's products' ability to increase factory production yields, improve time-to-market and enable the continuous manufacturing feedback loop as providing a major market opportunity in Asia, where China is actively trying to promote high value-add manufacturing. He said this was a key driver into what was seen as a £1.5bn market opportunity by 2020.

The analyst expects growth of 30% per year from the sector, with Renishaw likely to add scope for new products to unlock the mass-production market.