Weekly Recommendation, Target Price, Earnings Forecast Changes

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    [0] => Array
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            [0] => ((AQG))
            [1] => ((ANZ))
            [2] => ((BPT))
            [3] => ((STO))
            [4] => ((CSR))
            [5] => ((DXS))
            [6] => ((GPT))
            [7] => ((JHX))
            [8] => ((MQA))
            [9] => ((PMV))
            [10] => ((SXY))
            [11] => ((SUL))
            [12] => ((TOL))
            [13] => ((ABC))
            [14] => ((CKF))
            [15] => ((EHL))
            [16] => ((NUF))
            [17] => ((ORL))
            [18] => ((TAH))
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            [2] => BPT
            [3] => STO
            [4] => CSR
            [5] => DXS
            [6] => GPT
            [7] => JHX
            [8] => MQA
            [9] => PMV
            [10] => SXY
            [11] => SUL
            [12] => TOL
            [13] => ABC
            [14] => CKF
            [15] => EHL
            [16] => NUF
            [17] => ORL
            [18] => TAH
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This story features ANZ GROUP HOLDINGS LIMITED, and other companies.
For more info SHARE ANALYSIS: ANZ
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Guide:

The FNArena database 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.

For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.

Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.

Summary

Period: Monday June 17 to Friday June 21

Total Upgrades: 14
Total Downgrades: 6

Net Ratings Breakdown: Buy 40.79%; Hold 42.97%; Sell 16.24%

The pace of broker recommendation changes remains steady, if not outright busy. Last week saw twenty revisions to recommendations and for the third straight week, upgrades have significantly outweighed downgrades.

Consumer stocks remain in the downside headlights, while upgrades included a number of materials and infrastructure stocks, as well from other sectors with a positive exposure the falling AUD.

Upgrades

Alacer Gold ((AQG)) upgraded to Outperform from Neutral by Macquarie. B/H/S: 5/1/0

Macquarie has lowered its forecasts for the Aussie dollar and followed up with sector-wide updates, incorporating new estimates and valuations. In the mining space this has only led to one change in recommendation and the lucky beneficiary was Alacer Gold.

ANZ Bank ((ANZ)) upgraded to Outperform from Neutral by CIMB. B/H/S: 7/1/0

CIMB has identified ANZ Bank as a major beneficiary of Fed "tapering" with the bank to experience benefits through its Asian and Institutional businesses. Longer term, argues CIMB, higher US short-term rates in particular should benefit ANZ's Asian operations. Cash EPS forecasts have been increased by 1.1% and 2.5% respectively for FY14-15.

Beach Energy ((BPT)) upgraded to Neutral from Underweight by JP Morgan. B/H/S: 2/2/2

The broker has always liked Beach's conventional gas assets in the Cooper and its capacity to play off neighbouring Santos ((STO)), but has kept an Underweight rating on full valuation. The market has now sorted that issue out, so the broker upgraded to Neutral.

CSR ((CSR)) upgraded to Buy from Neutral by UBS and Neutral from Underperform by Credit Suisse.B/H/S: 1/5/2

UBS’ upgrade was based on the fact the company gains significant upside on the weakening in the AUD.

Credit Suisse has turned upbeat about a number of issues including the prospect of a pick-up in NSW building, an eventual Viridian turnaround, an increasing contribution from Hebel, building earnings momentum and the falling Aussie. Together they paint a nice picture… down the road. In the near term, earnings will be controlled by a gloomy aluminium price.

Dexus Property Group ((DXS)) upgraded to Neutral from Underperform by Credit Suisse and Buy from Neutral by UBS. B/H/S: 4/2/1

Credit Suisse noted that its upgrade neutralises the downgrade from exactly one month ago. Dexus has the highest risk profile among Office REITs in Australia, noted the analysts, with some 36% of all leases expiring by June 2015. This is a higher percentage than for its peers. However, CS analysts also believe this higher risk profile has been accounted for in their rather conservative estimates. Management seems to be working hard on improving value for shareholders and CS is also of the view that Dexus has the highest quality portfolio in Australia. Better-than-expected leasing outcomes should help drive a re-rate from here, stated the analysts. Dividend forecasts were also lifted.

Dexus is one of UBS’ top picks in the sector and its favourite office REIT play. EPS growth is about the best in the space, the portfolio is well set up to reap the benefits of cap rate compression and the company has two barrels worth of acquisition capacity. The broker expects 4.5% average EPS growth out to FY16 and a yield of 7.2%. It all added up to an upgrade to Buy.

GPT ((GPT)) upgraded to Neutral from Underperform by Credit Suisse. B/H/S: 2/4/1

The broker said it expects a continuation of difficult operating conditions in Australia that will lead to a flattening yield curve, which along with continued cuts to the cash rate, should generate continued cap rate compression. The problem is the sale of assets at book value or lower in such an environment will end up undermining valuations. Good thing recent sales have been accretive. With yields pushing higher and growth expectations looking more reasonable, CS had the confidence to upgrade its call.

James Hardie ((JHX)) upgraded to Neutral from Sell by UBS. B/H/S: 0/5/3

UBS upgraded its call to Neutral on upside from current AUD levels. UBS admitted the stock is still looking expensive on a P/E basis, but said exposure to a US housing sector recovery combined with a weaker AUD would support the valuation.

Macquarie Atlas Roads ((MQA)) upgraded to Outperform from Neutral by Macquarie. B/H/S: 2/2/2

With 100% of MQA sales sourced in euro, the toll roads group is a logical beneficiary (or victim) of FX movements. As Macquarie substantially lowered its AUD estimates for the two years ahead, noting there should be a straightforward positive impact. Also, lowered currency projections should, on Macquarie's assessment, translate into double-digit boosts to dividend payouts. The valuation impact was immediate, stated the analysts, hence they raised the price target to $2.40 from $2.16 prior. In addition, the refinancing of the Eiffarie debt and potential for a concession extension are both additional sources of value, noted the analysts.

Premiere Investments ((PMV)) upgraded to Neutral from Underperform by BA-Merrill Lynch. B/H/S: 2/3/1

Consumer discretionary stocks have pulled back by around 15% over the past month and the broker remains bearish on the sector. What’s worse, it is expected to become even tougher for retailers in FY14, which means further downside risk to share prices. Forecasts were lowered across the board and are now sitting around 8% short of consensus. Like for like sales growth is expected to dry up and operating costs to push higher, thus the outlook for margins and earnings is not positive. For PMV this added up to an upgrade given the broker's view that most of the downside is already in the price.

Senex Energy ((SXY)) upgraded to Overweight from Neutral by JP Morgan. B/H/S: 2/2/0

Senex boasts valuable conventional assets in the Cooper, but the broker has been concerned over the risk of SXY's 100% owned unconventional assets, which pose a challenge for such a small company. But industry discussions suggest a farm-out may be achieved in the next 12 months, which provides more confidence. In the meantime the market has sold down SXY to levels the broker believes are overdone, hence the upgrade.

Super Retail Group ((SUL)) upgraded to Buy from Underperform by BA-Merrill Lynch.B/H/S: 2/2/3

Consumer discretionary stocks have pulled back by around 15% over the past month and the broker is bearish on the sector. What’s worse, it is expected to become even tougher for retailers in FY14, which means further downside risk to share prices. Forecasts were lowered across the board and are now sitting around 8% short of consensus. Like for like sales growth is expected to dry up and operating costs to push higher, thus the outlook for margins and earnings is not positive. For SUL this added up to an upgrade to Buy, but only because the share price is down 20% since May.

Toll Holdings ((TOL)) upgraded to Overweight from Underweight by JP Morgan. B/H/S: 2/4/1

JP Morgan upgraded an Overweight rating and a price target of $5.72 (was $5.63). The bottom line conclusion was that Toll Holdings, even on lower growth assumptions, still looks great value for investors with a longer time frame. In the short term, however, difficult times are here to stay and EPS estimates received yet another haircut. Note: on revised forecasts there will be no growth for the company in FY14 and an unchanged dividend payout of 26c (same as expected for FY13).

Downgrades

Adelaide Brighton ((ABC)) downgraded to Neutral from Buy by BA-Merrill Lynch. B/H/S: 3/3/2

The stock was downgraded despite solid potential for an increased dividend in the next twelve months on otherwise decent cash flow. The broker was afraid AUD moves will lead to increased clinker import costs, which will negatively impact on margins, while falling mining capex spend will likely hit FY15 and beyond EPS significantly.

Collins Foods ((CKF)) downgraded to Neutral from Buy by UBS. B/H/S: 1/1/0

The broker noted the company has outperformed ASX300 Industrials by around 18% so far this year and by 28% over the past twelve months. Time to pull it back a notch, thought UBS, who downgraded to Neutral. Otherwise, the broker said the company remains in a good position to deliver in line or better FY results, while the current yield of 5.6% should certainly help prop up the share price. 

Emeco Holdings ((EHL)) downgraded to Neutral from Buy by UBS. B/H/S: 2/3/0

UBS has lowered its target to 32c from 60c. A downgrade was also forthcoming as were significant cuts to EPS and DPS forecasts. This all happened on the back of the company downgrading earnings guidance for the second time in two months, dropping FY13 net profit by 15% from April's update. The broker blamed weaker utilisation levels. UBS's FY13 earnings were cut by 20%, while FY14-15 were halved, UBS citing it view the macro environment will remain difficult for the Australian mining services sector for some time to come.

Nufarm ((NUF)) downgraded to Neutral from Overweight by JP Morgan. B/H/S: 3/3/2

The northern summer has been unseasonably cold and wet, impacting on US and European planting. The broker was also concerned that Sinochem's entry into the local market will impact on NUF's margins. The lower A$ will benefit but the broker has cut FY13 forecast earnings by 9%. The net result was the target rose to $4.88 from $4.77, but the rating was downgraded.

Oroton Group ((ORL)) downgraded to Underperform from Buy by BA-Merrill Lynch. B/H/S: 0/3/2

Consumer discretionary stocks have pulled back by around 15% over the past month and the broker remains bearish on the sector. What’s worse, it is expected to become even tougher for retailers in FY14, which means further downside risk to share prices. Forecasts were lowered across the board and are now sitting around 8% short of consensus. Like for like sales growth is expected to dry up and operating costs to push higher, thus the outlook for margins and earnings is not positive. For Oroton this meant a downgrade and lower forecasts and price target.

Tabcorp Holdings ((TAH)) downgraded to Underperform from Neutral by CIMB. B/H/S: 2/4/2

Sometime in between early February this year and today, CIMB had ceased/interrupted coverage of Tabcorp. Last week marked the resumption and CIMB might as well have dropped a bomb on Bridge Street. Claiming foreign competition, predominantly from the UK, and changes in consumer behaviour, favouring fixed odds, are re-shaping the industry. The impact on Tabcorp is anticipated to be a significant negative. The analysts noted their revised forecasts for FY14-15 were no less than 13% and 23% below Bloomberg consensus, respectively.

Significant consensus target price and earnings forecast changes tabled below.

Total Recommendations	Recommendation Changes
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