Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

This story features SANDFIRE RESOURCES LIMITED, and other companies. For more info SHARE ANALYSIS: SFR

By Chris Shaw

It has been a relatively quiet week for ratings changes for Australian equities, the eight brokers in the FNArena database making only seven upgrades and nine downgrades over the past seven days. This leaves total Buy ratings unchanged at 58.7%.

Among those stocks seeing upgrades during the period were Sigma Pharmaceutical ((SIP)) following a better than expected interim profit result and TPG Telecom ((TPM)) given better than anticipated full year earnings. 

Other upgrades were centred on resource stocks such as Oz Minerals ((OZL)), Kingsgate Consolidated ((KCN)), Mincor Resources ((MCR)), Western Areas ((WSA)) and Paladin ((PDN)) following revisions to commodity price assumptions. Sandfire Resources ((SFR)) also saw an improvement in overall ratings following an initiation of coverage with a Buy rating.

On the downgrade side of the ledger both Premier Investments ((PMV)) and Myer Holdings ((MYR)) scored downgrades to reflect cuts to earnings estimates post full year profit results and expectations of ongoing difficult trading conditions. 

Initiations with Hold ratings for both Intrepid Mines (IAU)) and Discovery Metals ((DML)) have brought down average ratings for the stock, while earnings outlook concerns resulted in cuts in ratings for Iress ((IRE)) and Oakton ((OKN)). Mirvac ((MGR)) has also been downgraded on valuation grounds.

The reviews that generated rating changes for Sigma, OceanaGold, Kingsgate, Sandfire, Mincor, Western Areas and Paladin also generated changes to price targets, while targets for Newcrest rose on the back of increases to gold price forecasts and for Panoramic Resources ((PAN)) on the back of revised production and cost estimates. Higher coal price forecasts have seen increases to both estimates and price targets for New Hope ((NHC)).

For the same reasons as ratings were cut, targets have come down for Intrepid, Myer, Oakton, Premier Investments and Iress among the industrial plays and Mincor, Independence, Paladin and Oz Minerals among resources stocks.

The cut in target for Paladin comes despite an increase in earnings forecasts, while a new contract win has seen estimates pushed higher for Fleetwood ((FWD)). Other increases to earnings estimates generally reflect revisions to commodity forecasts and so impact the likes of Newcrest, Independence, Kingsgate and OceanaGold.

Earnings forecasts were lowered for Gindalbie ((GBG)) post the company's full year profit result, while slightly lower August passenger numbers for Macquarie Airport ((MAP)) saw a trimming of earnings forecasts as well. 

Other cuts were largely the result of either weaker profit results for the likes of Myer and Premier Investments or changes to commodity price expectations for Oz Minerals. Estimates for Kathmandu ((KMD)) were trimmed given increased capex assumptions and challenging retail conditions and for Ten Network ((TEN)) as a result of disappointing ratings.

 

Total Recommendations	Recommendation Changes
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