FYI | Jul 11 2011
By Chris Shaw
The first full trading week of the new financial year has seen a further increase in positive ratings on Australian equities, the FNArena database showing 14 upgrades for the week against nine downgrades by the eight brokers under daily coverage. Total Buy ratings now stand 53.1% of all recommendations, up from nearly 52.5% last week.
Bank of Queensland ((BOQ)) was a major beneficiary of upgrades, seeing an additional two Buy ratings over the past week as the valuation argument in favour of the stock continues to gain credence. The valuation argument was also made in favour of Westfield Retail as it was upgraded, the stock seen as offering an attractive defensive exposure in the Australian REIT sector.
Westfield Group ((WDC)) also enjoyed upgrades as more analysts in the market accept there is improved value following recent share price underperformance. Revisions to commodity price assumptions sparked upgrades for uranium play Paladin ((PDN)) over the week, while the likes of QBE Insurance ((QBE)), ResMed ((RMD)) and Westpac also saw upgrades.
On the flip side the major downgrade of the week was experienced by Murchison Metals ((MMX)) after the company updated on the progress of the Okajee and port and rail and Jack Hills uranium mine projects. Brokers see a need for a restructuring as the capital costs of development appear beyond Murchison at present.
Changes to commodity price assumptions were behind a downgrade for Gryphon ((GRY)), while the likes of Macquarie Group ((MQG)), Cardno ((CDD)) and Insurance Australia Group ((IAG)) also met with downgrades during the week.
There was little in the way of increases to target prices, which tends to underpin the argument while the market offers a number of value situations there are few obvious catalysts at present. Murchison's issues saw price targets for the company slashed by better than 70%, other reductions being of similar magnitude to the target increases.
Our usual update on earnings estimates is this week absent due to technological problems. Sorry, we couldn't get them fixed in time before today's update. Should be back next week.
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Total Recommendations |
Recommendation Changes |
|
Broker Recommendation Breakup |
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Recommendation
Positive Change Covered by > 2 Brokers
| Order | Symbol | Previous Rating | New Rating | Change | Recs |
|---|---|---|---|---|---|
| 1 | BOQ | 0.130 | 0.500 | 0.37% | 8 |
| 2 | WRT | 0.710 | 1.000 | 0.29% | 7 |
| 3 | BTT | 0.500 | 0.670 | 0.17% | 3 |
| 4 | WDC | 0.710 | 0.860 | 0.15% | 7 |
| 5 | PDN | 0.430 | 0.570 | 0.14% | 7 |
| 6 | TSE | 0.570 | 0.710 | 0.14% | 7 |
| 7 | QBE | 0.250 | 0.380 | 0.13% | 8 |
| 8 | RMD | 0.500 | 0.630 | 0.13% | 8 |
| 9 | WBC | 0.130 | 0.250 | 0.12% | 8 |
| 10 | TEN | 0.130 | 0.250 | 0.12% | 8 |
Negative Change Covered by > 2 Brokers
| Order | Symbol | Previous Rating | New Rating | Change | Recs |
|---|---|---|---|---|---|
| 1 | MMX | 0.330 | – 0.670 | – 1.00% | 3 |
| 2 | GRY | 1.000 | 0.670 | – 0.33% | 3 |
| 3 | CMW | 1.000 | 0.670 | – 0.33% | 3 |
| 4 | CDD | 0.750 | 0.500 | – 0.25% | 4 |
| 5 | MQG | 0.290 | 0.140 | – 0.15% | 7 |
| 6 | IAG | 0.750 | 0.630 | – 0.12% | 8 |
| 7 | WOR | 0.500 | 0.430 | – 0.07% | 7 |
Target Price
Positive Change Covered by > 2 Brokers
| Order | Symbol | Previous Target | New Target | Change | Recs |
|---|---|---|---|---|---|
| 1 | SKI | 1.319 | 1.379 | 4.55% | 8 |
| 2 | ESG | 0.907 | 0.920 | 1.43% | 4 |
| 3 | RMD | 3.493 | 3.538 | 1.29% | 8 |
| 4 | PRY | 3.656 | 3.699 | 1.18% | 8 |
| 5 | WRT | 2.917 | 2.934 | 0.58% | 7 |
| 6 | WDC | 10.079 | 10.090 | 0.11% | 7 |
Negative Change Covered by > 2 Brokers
| Order | Symbol | Previous Target | New Target | Change | Recs |
|---|---|---|---|---|---|
| 1 | MMX | 2.100 | 0.560 | – 73.33% | 3 |
| 2 | MQG | 39.666 | 37.523 | – 5.40% | 7 |
| 3 | CDD | 6.363 | 6.198 | – 2.59% | 4 |
| 4 | WOR | 31.608 | 30.824 | – 2.48% | 7 |
| 5 | GRY | 2.143 | 2.093 | – 2.33% | 3 |
| 6 | IAG | 4.028 | 3.950 | – 1.94% | 8 |
| 7 | CMW | 0.775 | 0.760 | – 1.94% | 3 |
| 8 | ABC | 3.604 | 3.535 | – 1.91% | 8 |
| 9 | ASX | 36.682 | 35.980 | – 1.91% | 7 |
| 10 | BTT | 2.960 | 2.907 | – 1.79% | 3 |
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
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