In the good books
Investa Office (IOF) Upgrade to Neutral from Underperform by Credit Suisse B/H/S 0/4/0
Credit Suisse expects the price of Investa Office to be underpinned by the bid from Dexus Property (DXS). The broker considers the bid a good outcome for Investa investors. A competing bid may still emerge, the broker believes, although the company has indicated potential acquirers were approached before a deal was struck with Dexus.
Speedcast International (SDA) Upgrade to Buy from Neutral by USB B/H/S 1/2/0
UBS believes the share price has underperformed as the company is now more highly geared after several acquisitions and intends to still make 2-3 acquisitions per annum going forward, so investors are worried about a capital raising.
A weak oil price and subdued commentary from peer RigNet also implies a weaker performance for the energy division, the broker observes.
In the not-so-good books
Estia Health (EHE) Downgrade to Equal-weight from Overweighty by Morgan Stanley B/H/S 1/3/0
The acquisition of Kennedy Health Care is both earnings accretive – at 10% in fiscal 2017 – and provides a foothold in NSW, Morgan Stanley maintains.
Nevertheless, concerns about a reliance on acquisitions and debt leads the broker to consider the stock is now fully valued.
Platinum Asset Management (PTM) Downgrade to Underperform from Neutral B/H/S 1/1/1
The share price is up 20% in the quarter to date and Credit Suisse expects inflows to slow from this point with the trust funds unlikely to benefit from reinvestment of distributions as was the case in the September quarter.
Premier Investments (PMV) Downgrade to Underperform from Neutral by Credit Suisse B/H/S 3/2/1
The broker has downgraded the stock as the share price has appreciated. The current price includes all foreseeable upside in earnings from expansion initiatives, in the broker’s view.
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