It’s been a slow start to the week for brokers, but most of the movement was on the positive side of the equation as analysts acted after company announcements, such as Macquarie Group’s outlook update.
In the good books
JP Morgan upgraded SP Ausnet (SPN) to Overweight from Neutral. Declines have been exacerbated by a mild winter but SP AusNet’s transmission revenue remains unaffected by demand. Moreover, higher bond rates look set to improve regulatory returns from the Victorian electricity transmission.
Deutsche Bank upgraded Pharmaxis (PXS) to Hold from Sell. The company is facing considerable challenges including slow sales and the risk that competing therapies could reduce the market opportunity. Deutsche Bank has scaled back sales expectations in Europe and removed further US sales estimates and expected trial costs. It now thinks the stock is trading near fair value.
Citi upgraded Resolute Mining (RSG) to Buy from Sell. Citi has upgraded gold price forecasts and earnings across the sector and, as a result, Resolute has been upgraded to Buy from Sell and the price target is raised to $1.00 from 80 cents.
JP Morgan upgraded Macquarie Group (MQG) to Neutral from Underweight as four other brokers left ratings on hold, (two neutrals and two outperforms or overweights) following an outlook update on Monday that suggests first half earnings will be in line with the last half, and second half earnings will be better.
In the not-so-good books
Deustche Bank downgraded Cochlear (COH) to Sell from Hold. Cochlear missed out on the important Chinese government tender and Deutsche Bank thinks this is a symptom of the increased competition.
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.
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Also in the Switzer Super Report:
- Charlie Aitken: Buy BOQ for northern exposure [1]
- Roger Montgomery: Floating the OzForex boat [2]
- Peter Burgess: My SMSF – Peter Burgess [3]
- Gavin Madson: The Fed spells it out – ignore political risk at your peril [4]
- Tony Negline: Watch out for SMSF focus in Abbott review [5]
- Grant Abbott: Changes to new contribution rules mean diligence [6]
- Paul Rickard: Question of the week – Gold stock speculation [7]