Share tip round-up: Lloyds Bank, EasyJet, Imperial Brands and more

Experts suggest it’s time to sell EasyJet, buy an impressive challenger bank and take another look at a British firm benefitting from the booming number of pensioners.

If you're planning some stock market moves this week, these are the top tips from the investing experts.

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1. EasyJet – Sell

Investment firm Liberum has cut its price target on Easyjet (EZJ) from 930p to 825p after a profit warning last week.

Analyst Gerald Khoo described the budget airline decision to stick to its growth plan despite over-capacity in the airline industry as ‘brave’.

“The refusal to retreat in the face of downward pressure on unit revenues, margins and cash flow is brave. Short-term pain is inevitable.

“Long-term gain may not be, if weaker rivals prove stubbornly persistent and irrational.”

2. Imperial Brands – Buy

In a “turbulent and volatile” market, investors will be looking for companies that provide a fairly reliable return.

One such stock is Imperial Brands (IMB) – formerly Imperial Tobacco - according to The Share Centre.

“Tobacco stocks in general are considered defensive compared to other sectors because sales are more consistent and generate a lot of cash for companies.”

Shares in IMB fell 5% last week but it “reported a solid trading update at the end of September, in which it stated that it was on track to meet full year expectations with earnings forecast to benefit from currency translation by 4-5%.

“This makes it a solid candidate for share of the week this week.”

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3. Secure Trust Bank – Buy

A third-quarter trading statement shows this challenger bank is suffering no adverse affects from the Brexit vote, according to Gary Greenwood from Shore Capital.

Shares in Secure Trust Bank (STB) have risen by 25% after half-year results in July, but there is still upside, says Greenwood, with expected pre-tax full-year profits of £33.4m and adjusted earnings per share of 140.5p.

“Shares trade on 16.8 times forecast earnings for this year, 1.9 times tangible net asset value and offer a 3.2% yield,” says Greenwood.

“Such premium ratings reflect the group’s strong track record, well-regarded management team, attractive growth prospects (at high returns) and the strength of its balance sheet, which currently includes material surplus capital following the disposal of Everyday Loans to Non-Standard Finance earlier this year.”

4. McCarthy & Stone – Buy

Broker Canaccord Genuity has labelled this housebuilder a buy with a 185p price target.

It’s a dominant market leader with a strong brand in the private retirement housing market, the broker notes.

“We have a generally positive view of the UK house-building sector and believe that McCarthy & Stone (MCS) offers an investment opportunity in a very attractive niche within the sector,” it adds.

Canaccord drew attention to the builder’s strategy of delivering strong organic growth supported by a positive demographic backdrop.

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5. Lloyds Bank – Sell

Citigroup has reiterated its ‘sell’ recommendation for Lloyds Bank (LLOY).

A Financial Conduct Authority consultation paper released in August shows the bank could book further charges inked to payment protection insurance mis-selling, says the analyst.

Alongside that, the bank is likely to fall into a pension deficit in the third quarter, which would prevent it paying a special dividend, say analysts Andrew Coombs, Ian Sealey and Sujal Kumar in a research report.

The views expressed in this article do not necessarily represent those of loveMONEY. The information included does not constitute regulated financial advice. You should seek out independent, professional financial advice before making an investment decision.