Bank of America Merrill Lynch has taken a less bearish view on global banking group HSBC and moved its recommendation from 'underperform' to 'neutral'.

BofA said: "While we remain concerned about the return on equity capacity of HSBC, it has done an outstanding job in improving capital ratios, something that the market has placed a lot of value on. With the US economy continuing to surprise on the upside the market may place more weight on the interest rate optionality embedded within HSBC."

Canaccord Genuity has kept its 'hold' rating and 500p target price for oil giant BP but has said that Friday's announced $8.0bn share buyback is bigger than the market had expected ($5-6bn) following the sale of its TNK-BP stake to Rosneft.

While BP's additional 18.5% stake in Rosneft - received as part of the deal - offers the company access to "much better growth opportunities" than its interest in TNK-BP, the broker highlighted that the cash contribution is significantly lower meaning that its contribution to dividends has reduced.

Panmure Gordon has retained its 'sell' rating and 145p target price for home emergency repairs group HomeServe, saying that Friday's profit warning raises questions about dividend sustainability.

"Our cautious stance is driven by the uncertainties following its UK telesales issues and the subsequent, and on-going, FSA investigation. The share price has had a spike up mid-2012 due to speculation around private equity interest. With big downgrades coming through there will be uncertainty about the sustainability of the dividend which currently yields 5.6%; this has provided some support. The immediate outlook for the share price remains very challenging."

BC

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BP (BP.) share price
HSBC Holdings (HSBA) share price
Homeserve (HSV) share price