Broker tips: Lloyds Banking, Aviva, Michael Page

Nomura Securities remains negative on Lloyds Banking despite regarding the recent results from the lender as 'incrementally positive'.

The broker thinks the short-term negative reaction to the results could yet flip-flop, but longer term it remains 'negative towards Lloyds owing to asset quality, funding and capital issues.'

Nomura would regard any strengthening of the share price as a selling opportunity, as it does not regard the valuation of 0.95 times book value as 'particularly attractive in a sector context.'

Nomura has raised its earnings estimates after Lloyds management raised the HBOS synergy targets to £2bn but has done so with a certain amount of reluctance, saying 'we would now regard our assumptions as optimistic'.

Nomura has a 'reduce' recommendation for the stock and aa price target of 53p.

Aviva, the world's fifth largest insurer, isn't expected to reveal any surprises when 2009 results are published Thursday, says Panmure Gordon.

It's looking for a 7% drop in market consistent embedded value (MCEV) operating profit to £3.11bn, in the middle of the £2.94bn-£3.29bn range of forecasts.

IFRS operating profit is seen down 17% to £1.91bn, while an anticipated final dividend of 14.1p per share would take the total payout to 23.1p, 30% less than 2008.

But, given the recovery in the strength of the balance sheet last year, Panmure believes there's a good chance the dividend could be higher than everyone thinks.

"Aviva is our top pick in the sector with the shares trading at around Embedded Value," says the broker. "We view this as wrong, bearing in mind the ongoing potential of the business going forward."

"On an IFRS P/E basis the shares are trading on 8.0x 2010E and 7.1x 2011E. In the meantime shareholders are receiving a massive 6.2% dividend yield based on our current 2009 forecast. Buy."

There'll be plenty of nerves ahead of final results from Michael Page on Friday as investors wait to see if the white collar recruiter did better than Hays in the last six months of 2009.

Hays slumped last week when it said half-year profit plunged to £3.4m from £100.8m in 2008 and fell 70% to £30.4m, excluding the £27m OFT fine that is currently under appeal.

It also reported business in the UK remains "challenging" and that its performance there is expected to be "broadly similar" in the second half.

Michael Page is more focused on the better performing overseas markets and less on the public sector, so Charles Stanley expects news of an improving outlook.

"We believe Michael Page is among the best placed of the staffers to achieve considerable earnings growth over the next cycle," it said. "With the potential of the group in our view still not fully priced in, we anticipate further positive share price performance as the cycle matures."

But risks surrounding a delay to the recovery remain a concern. "Given the precarious state of the UK economy, and its still significant contribution to Page's gross profit (39%), the risk is that bearish tones on the UK outlook outweighs positive overseas developments," says the broker.

Still, Charles Stanley maintains its 'buy' stance and 510p target price.