Buy, Sell, Hold – what the brokers say

Editorial director of Switzer
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It’s been a very thin week so far when it comes to broker activity. Perhaps analysts were too busy celebrating an expected return to confidence following the election, or perhaps companies were just laying low and providing no new information that brokers could do anything with.

In the good books

JP Morgan upgraded Transurban Group (TCL) to Overweight from Underweight. The broker expects the company to benefit from the new government’s commitment to infrastructure and the range and extent of concessions Transurban may achieve as part of the F3 [now M1] link to the M2 project in Sydney. A recent share price fall also makes the stock more attractive to JP Morgan.

JP Morgan also upgraded Westfield Retail Trust (WRT) to Overweight from Neutral on the back of the 33.4% sale in Karrinyup, at a 19% premium to NTA by WRT and Westfield Group. Following recent underperformance, this transaction, along with the buyback expansion, provides support.

In the not-so-good books

Citi downgraded Beadell Resources (BDR) to Sell from Buy after the company announced expected average line-of-mine production of 150,000 ozs over eight years in its interim results. Citi says it struggles to identify attractive value using the three-year average gold price forecasts of US$1,220/oz.

Credit Suisse downgraded ALS Limited (ALQ) to Underperform from Neutral, based on its belief that around 50% of the group is facing headwinds as exploration activity amongst miners declines. Credit Suisse does not think ASL’s current 18.6 times multiple sufficiently captures this risk.

The above was compiled from reports on the FNArena database, which tabulates the views of eight major Australian and international stock brokers: BA-Merrill Lynch, CIMB, Citi, Credit Suisse, Deutsche Bank, JP Morgan, Macquarie and UBS.

Important: 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.

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