Broker Tips: Brewin Dolphin, Wentworth, United Utilities

It said Brewin’s underperformance is overdone and presents an attractive entry point, noting that the share price has declined 17% in the past six weeks. It attributed the decline to Brewin’s guidance on 27 May for lower net inflows and a lower revenue margin than originally anticipated.

RBC also pointed out that Brewin trades at double-digit discounts to its closest peer Rathbone and the broader European diversified financials sector.

Panmure Gordon has kept a ‘buy’ rating on Wentworth Resources and reduced its target price to 50p from 65p, citing a reduced production profile.

“We remain buyers of the stock, but take a more cautious view in light of the continuing delays getting to first production and the use of equity, rather than debt financing,” Smith said in a note.

The researcher said while Wentworth appeared well placed, if Tanzanian authorities do not contract further gas supplies in the near term, it is not clear how over-supply would be managed, which it believed could impact gas sales.

HSBC upgraded United Utilities to ‘buy’ from ‘hold’ and bumped up its price target to 1,050p from 1,000p.

The bank pointed out that United Utilities has outperformed its cost of debt, creating over £300m of value in the last regulatory period.

“We believe there are further opportunities for this to occur again. The company’s average rate of index-linked debt is 1.6%; therefore United Utilities should theoretically be able continue to beat Ofwat's assumptions of 2.59% real cost of debt,” it said.