In the good books
CVN Carnarvon Petroleum (CVN) Upgrade to Outperform from Neutral by Macquarie B/H/S 1/0/0
Macquarie upgrades its recommendation to Outperform from Neutral, retaining a 12c target. This is to reflect the recent under-performance and the near-term drilling of Roc-2.
Megaport (MP1) Upgrade to Add from Hold by Morgans B/H/S 1/0/0
Morgans expects the cash burn in the June quarter will be lower, as the software services company was running hard in the March quarter to establish itself in North America. The share price has fallen significantly in recent months and the broker believes the stock now represents good value on a risk/reward basis. Hence, the rating is upgraded.
In the not-so-good books
Alumina (AWC) Downgrade to Underperform from Neutral B/H/S 4/1/2
Credit Suisse analysts believe the tide has unexpectedly turned in favour of more upside surprises from the global steel cycle. This reversal has pretty much lifted all boats inside the commodities sector. However, the analysts are not in the bull’s camp when it comes to metals. They warn share prices might have run up too hard for multiple representatives for non-steel specific exposure.
Amcor Limited (AMC) Downgrade to Neutral from Buy by Citi B/H/S 3/4/1
The analysts consider Amcor well positioned to participate in what they regard as the inevitable consolidation of the US flexible packaging sector. The analysts note Amcor is the leader in the medical sector in the US but it has very limited presence in food.
OceanaGold (OGC) Downgrade to Sell from Hold by Deutsche Bank B/H/S 1/1/3
Deutsche Bank observes a solid March quarter with gold output 10% above forecasts and Didipio and Waihi the main contributors. The broker believes the company’s operations are performing strongly and Haile is a quality asset, which will drive the company to a situation where it is the world’s lowest cost gold producer. That said, the share price has outperformed and the broker has trouble with the valuation. Deutsche Bank downgrades to Sell from Hold.
Perseus Mining (PRU) Downgrade to Neutral from Buy by UBS B/H/S 2/3/0
March quarter production was well below UBS forecasts. Management cited poor grades and recent blending issues. June half production guidance has been reduced by 21%. Despite a reiteration of the life-of-mine plan, recent downgrades to guidance have reduced the broker’s confidence for now.
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