The brokers are slowly coming back to work after their Christmas, New Year break, so we only have a few of actions from FN Arena today, but here they are, and expect more on Thursday and next week.
In the not-so-good books
Integral Diagnostics (IDX) limited was downgraded to Hold from Buy by Ord Minnett rates IDX Buy/Hold/Sell: 2/1/1. The company has upgraded FY18 guidance to net profit growth of around 20% versus prior expectations for “high single digit growth”. This has been driven by acceleration in referrals, particularly in Western Australia, and implementation of cost reductions. Ord Minnett is encouraged by the upgrade but, with the share price currently trading above valuation and broadly in line with the prevailing offer, downgrades to Hold from Buy and raises the target to $2.30 from $1.89.
NEXTDC (NXT) was downgraded to Hold from Buy by Deutsche Bank Buy/Hold/Sell: 6/1/0. Deutsche Bank downgrades to Hold from Buy as the stock has significantly outperformed. The broker does not believe the current valuation provides sufficient compensation for a number of potential risks. There is limited certainty on maintenance capex requirements for the data centres, compounded by these being heavily exposed to technological change. The broker highlights that current conditions of rapid asset growth and high price to book values have historically signalled underperformance. Target is raised to $5.50 from $4.90.
Origin Energy (ORG) has been downgraded to Neutral from Buy by UBS Buy/Hold/Sell: 3/4/0. UBS analysts are worried that global oil prices have recovered too rapidly. In addition, the analysts are anticipating lower wholesale electricity prices in 2018 due to increased focus on grid stability, supply availability & demand response. The price target for Origin Energy has risen to $10.40 from $10.10.
Santos (STP) has been downgraded to Sell from Neutral by UBS Buy/Hold/Sell: 3/3/2. In addition to concerns about the global oil price recovery being too rapid, UBS analysts note the Santos share price is above their fair value calculation and considerable downside could follow if the Harbour bid fails to materialise. Hence, UBS has downgraded to Sell from Neutral. Price target has gained 10c to $5.20.
The above was compiled from FN Arena. The FNArena database tabulates the views of eight major Australian and international stock brokers: Citi, Credit Suisse, Deutsche Bank, Macquarie, Morgan Stanley, Morgans, Ord Minnett and UBS.
Important:Â This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
