FNArena Reporting Season Monitor

This story features DECMIL GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: DCG

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FNArena's Reporting Season Monitor

Note: Excel file attached

Guide:

Each day of the Australian six-monthly reporting season, FNArena provides a summary of broker responses to the previous day's profit result releases from companies under coverage. Readers are reminded that it matters not what actual profit/loss result is posted by each company but by how much that result exceeded/fell short of stock analysts' consensus forecasts. Stock price movements on the day of release, and in many cases for the months following the release, will often be determined by the extent of "beats" and "misses" of underlying earnings as well as company guidance and analyst/management outlook.

A rolling summary table (Excel) is attached to each day's report and will build as the season progresses. Additions will be made each day, consistent with releases dates, while stocks will be listed in alphabetical order for ease of use until the full picture of the reporting season emerges.

Note that companies assessed include only those covered by the eight major stockbrokers in the FNArena database (approximately top 400) and that ratings changes and targets are those provided only by the database brokers.

There are many reasons as to why investors (should) pay attention to half-yearly and yearly financial updates from listed entities. It forces management teams and boards to provide updates and insights into how a business is faring. Equally important, stockbroker research has revealed there usually is a direct correlation between the quality of the reports, and whether it surprises or disappoints, and the share price performance afterwards, with some research suggesting the associated impact can be measured up to six months after the event.

No wonder, in the lead-in to each 6-monthly reporting season, analysts try to establish who's likely going to surprise and who's more likely to disappoint. For this year's predictions, see the following stories:

– Several Emerging Themes For Australian Earnings Season

– Weekly Broker Wrap: Earnings Season Is Heading Your Way

– Reporting Season Approaching: Get Set For Some Big Announcements
 

26/03/13:

Companies included: CWN, DCG, EPW, IFL, IFN, KSC, LLC, MGR, MGX, QUB, SGM, SLX, TEL, TPI, VRL

Crown ((CWN))

Crown’s result was roughly in line but cost controls were a real highlight amongst rising margins at Melbourne, rising revenues at Burswood and positive earnings growth in Macau. Macau provided the impetus for Credit Suisse to upgrade to Buy, while all brokers significantly raised price targets. Citi has cited a strong share price run to pull back to Hold, leaving five Buys to three Holds. Target rises to $15.95 from $13.99.

Decmil Group ((DCG))

Only two database brokers cover Decmil and only Deutsche has updated so far. Decmil’s result beat Deutsche’s forecast and the dividend also surprised. No change to forecasts or rating, leaving one Hold and one Buy. Consensus target rises to $2.28 from $2.25.

ERM Power ((EPW))

Only two database brokers cover ERM and only Macquarie has updated so far. FY13 cashflow was positive but FY14 guidance disappointed the broker, leading to some stiff forecast downgrades. ERM has several avenues of growth but until success is achieved, the broker retains Hold, leaving one Hold, one Buy. Consensus target falls to $2.75 from $2.89.

IOOF Holdings ((IFL))

IOOF’s result was roughly in line and reduced costs were a highlight, leading to margin and dividend improvement. JP Morgan has upgraded to Hold, but the share price has had a good run which is enough to drive Citi to downgrade to Hold, leaving two Buys and four Holds. Consensus target rises to $8.82 from $8.25.

Infigen Energy ((IFN))

Infigen’s result was roughly in line after currency considerations. Costs reductions were a highlight and should lead to debt reduction albeit debt will remain a constraint. No change to three Buys and one Hold. Consensus target falls to 44c from 46c.

K&S Corp ((KSC))

K&S’ result was in line with guidance and reduced debt is a highlight in a tougher second half. The stock trades below book value, is a beneficiary of a lower Aussie and offers a 9% yield, keeping the two brokers who cover KSC on Buy. Consensus target rises to $2.09 from $2.05.

Lend Lease Corp ((LLC))

There are times in the cycle to own a property developer and this is one, said CIMB, which pretty much sums up broker views following a largely in line result. Lend Lease is a rare example of eight from eight Buy ratings, all of which are unchanged. Times are still difficult in construction but LLC’s pipeline is at a record level. A range of asset sale options ahead further underpin. Consensus target rises to $10.70 from $10.55.

Mirvac Group ((MGR))

Mirvac posted a modest beat and earnings growth guidance for FY14 is strong. A recovery in residential would also provide further upside. The issue with MGR is price, which brokers feel is now pretty full. Macquarie has downgraded to Hold to leave three Buys and four Holds. Consensus target is steady on $1.74.

Mt Gibson Iron ((MGX))

Mt Gibson posted a miss but at least one broker believes patience is required. Cash generation and progress at Koolan Island were highlights and as a high cost producer MGX is well leveraged to the iron ore price. The big jump in share price recently sees two brokers downgrading to Sell but valuations are mixed, leaving three Buys, two Holds and three Sells. Consensus target rises to 81c from 78c.

Qube Logistics ((QUB))

Qube’s result was in line in a difficult market driven by acquisition benefits. Brokers are expecting reasonable but slower growth in FY14 given the acquisition benefits are now incorporated, unless further purchases are made. QUB scores a perfect set of eight from eight Holds on this balance, with no changes. Consensus target steady at $1.85.

Sims Metal Management ((SGM))

Disappointment in Europe and from electronics recycling led Sims to a clear miss. Brokers range from cautious to cautiously optimistic, with improvement in US margins suggesting a potential trough. CIMB has downgraded to Hold to join Credit Suisse while Macquarie remains on Sell, and four other brokers are sticking to their Buy ratings. Consensus target falls to $10.94 from $11.02.

Silex Systems ((SLX))

Silex’s result beat JP Morgan, the one database broker covering the stock. A GLE milestone payment made the difference. Projects are progressing and FY14 guidance was maintained, leading the broker to retain a Buy rating and $3.90 target.

Telecom Corp of New Zealand ((TEL))

Telecom NZ’s result was roughly in line after a challenging year, and brokers do not expect things to get much better as earnings declines continue to outweigh cost saving initiatives. This is enough to push Merrills into a downgrade to Hold, although JP Morgan and UBS have both upgraded to Hold given weak share price performance. This leaves a mixed bag of one Buy, five Holds and two Sells, with TEL’s transition phase helping to cloud the view. No consensus target as TEL is a Kiwi.

Transpacific Industries Group ((TPI))

Transpacific posted a lesser loss than expected and hence a beat. Brokers see TPI moving in the right direction as it simplifies the business and reduces costs and debt. Conditions remain difficult in the short term nevertheless. No change to five Buys and one Hold. Consensus target rises to $1.06 from 99c.

Village Roadshow ((VRL))

Village’s result was in line with guidance and the two covering brokers. Deutsche (Buy) does not believe the full value of new Wet’n’Wilds and Chinese expansion have been factored into valuation while JP Morgan notes a lot of capex has been invested, which provides for potential risk. The share price has also run hard and JPM downgrades to Hold. Consensus target rises to $6.50 from $6.10.
 

Companies reporting previously (summaries included below):

23/08/13 (2): AGO, CAB, EGP, EHL, ENV, MOC, MRM, NWH, PBG, PNA, RCR, SBM, SYD, TWE
23/08/13 (1): ASX, AWC, BXB, FMG, FXJ, IAG, ORG, SWM, TOL, TTS
22/08/13 (2): AAX, ARP, CLO, CSV, FAN, FBU, GWA, NXT, RIC, SDM, SGH, SMX, TGR, TIG, TME, TSM, WEB
22/08/13 (1): AAD, ABC, AIO, APA, BLD, CQR, IIN, ILU, IOF, SEK, SUL, SUN, TRS, WPL
21/08/13: ANN, ARI, BHP, CCL, CDD, CFX, CPA, CRH, GEM, HIL, IVC, MAH, MND,OKN, OSH, QBE, SHL, SLM
20/08/13: AMC, AZJ, BEN, BRG, BSL, CGF, DXS, FDC, FWD, GOZ, IMD, PFL, YAL
19/08/13: AHE, APN, CGH, DUE, ENE, MFG, PTM, STO
16/08/13: AMP, AQZ, GMG, HFA, MCE, MCR, MIN, SRX, WES
15/08/13: CBA, CPU, CRZ, CSL, GFF, LEI, MDL, OZL, PRY, RWH, SAI, SGN, SGT, SKE, SXL, TOX, WOR
14/08/13: AMM, BKN, DMP, MBN, REA, RKN, SGP
13/08/13: COF, GPT, JBH, JHX, NCM, UGL
12/08/13: AQP, TAH
09/08/13: AUT, BWP, HGG, RIO, TLS
08/07/13: FOX, FXL
07/08/13: CDI, COH, DOW, IRE
06/08/13: RMD
02/08/13: TCL
01/08/13: ERA
31/07/13: LEP, NVT
29/07/13: ALZ, GUD

Summaries:

23/08/12 (2):

Atlas Iron ((AGO))

Atlas posted a rather spectacular miss, with only Macquarie coming to close to the right result. Rising costs and capex were the issue. Atlas is in the middle of a major expansion and is burning its cashflow on capex which puts it at the mercy of capex increase risk. Management provided FY14 production guidance but nothing beyond, and the timing of Mt Webber Stage 2 remains uncertain. Three brokers have downgraded to Hold leaving one Buy. Consensus target falls to $1.00 from $1.11.

Cabcharge Australia ((CAB))

Cabcharge posted a miss, prompting one downgrade to Hold and one to Sell, making four Sells and two Holds. In a weak consumer environment there is little sign of improving taxi earnings, the loss of two bus contracts undermines that earnings source, and most importantly, the impact of the adverse VIC government ruling is yet to be felt. Consensus target falls to $3.92 from $4.18.

Echo Entertainment Group ((EGP))

Echo’s share price has been resoundingly thumped since losing out to Crown at Barangaroo. It is in this context brokers weighed up a mixed result which missed forecasts. Not all brokers have updated yet but Citi has drawn on the value argument in upgrading to Buy, making four, against two Sells so far. Earnings growth is expected in FY14. Consensus target falls to $3.25 from $3.28.

Emeco Holdings ((EHL))

Emeco’s result was in line with previously downgraded guidance. If conditions do not begin to improve in the equipment hire business, Emeco will run into debt covenant troubles. Momentum is still to the downside despite decent cashflow. At a knock-down price the stock is cheap for the risk-takers, hence five Hold ratings and no actual Sells. Death or glory? Consensus target falls to 28c from31c.

Envestra ((ENV))

Envestra posted a solid result that beat most forecasts but FY14 guidance beat everyone. The dividend also beat. All great stuff, but the market has priced in expectations APA will increase its takeover bid, and brokers are not entirely sure. Two Buys and three Holds, unchanged. Consensus target rises to $1.14 from $1.13.

Mortgage Choice ((MOC))

It was a slight beat from Mortgage Choice and two out of three covering brokers have updated so far. CIMB (Buy) was a little disappointed with core earnings growth but likes the yield and defensiveness, while UBS (Hold) believes momentum is building but sees full value. No ratings changes. Consensus target rises to $2.23 from $1.96.

Mermaid Marine Australia ((MRM))

Mermaid Marine has been an outstanding performer in energy sector services to date but it may be about to get tougher from here to keep on outperforming. The FY13 result was solid and in line but MRM is now trading at its 10x peak and will face some headwinds in FY14 CIMB (Hold) notes. UBS agrees value is full and has downgraded to Hold, to make four Holds against two Buys. Consensus target rises to $4.15 from $3.95.

NRW Holdings ((NWH))

Mining services provider NRW has seen its share price halve in value in 2013. In this tough market, brokers were quite pleased with a result in line with recent guidance. A strong balance sheet supports leverage to any commodity price improvement and brokers feel all that can be bad is now priced in. Credit Suisse has upgraded to Hold to make five, with two Buys. Consensus target rises to $1.48 from $1.38.

Pacific Brands ((PBG))

Pacific Brands’ result largely met expectations in a tough year and FY14 guidance is for a tougher year. The problem is PBG is a big loser from the falling Aussie as cost of goods rises. It provides a decent yield, hence UBS retains Buy, while Citi (Buy) is keen on increased marketing. JP Morgan has capitulated though, downgrading to Sell from Buy, leaving a mixed bag of two Sells to three Buys. Consensus target falls to 82c from 83c.

PanAust ((PNA))

PanAust’s result will go down as a beat but only on a big derivatives windfall no one was expecting. Brokers welcome a dividend increase and expect production growth in FY14. Six Buys sum up a positive view against one Hold, but Citi (Sell) thinks PNA is overpriced. Consensus target rises to $2.53 from $2.49.

RCR Tomlinson ((RCR))

RCR posted a solid 37% increase in earnings. Only two database brokers cover the stock for two unchanged Buys with CIMB yet to update. Macquarie believes the base business is only just beginning to realise its margin potential. Consensus target rises to $3.16 from $3.15.

St Barbara ((SBM))

As a high cost producer, St Barbara will live or die on the gold price. The weak gold price is well known but SBM posted a miss and underperformance coupled with high gearing is not a good combination. Two of three covering brokers have updated with Citi downgrading to Sell from Buy to meet another Sell and one Hold. Consensus target falls to 62c from 72c.

Sydney Airport ((SYD))

Sydney Airport’s first half result was solid, with international traffic holding up despite the lower Aussie and with non-aero earnings on the rise. Brokers are split, nevertheless, on two Buys, two Holds and two Sells. CIMB (Buy) sees a solid outlook while JP Morgan (Sell) is concerned about ever rising debt. Consensus target rises to $3.65 from $3.63.

Treasury Wine Estates ((TWE))

Treasury Wine’s result met guidance which included a previously taken and somewhat spurious inventory provision. Slowing growth in Chinese demand is an issue although the 2012 vintage should see decent earnings. In a somewhat binary balance, two brokers on Buy see TWE as good value if pulled apart, with Penfolds the pearl. Five brokers on Sell just see ongoing problems. This explains a target range from $3.09 to $10.00. Consensus falls to $5.11 from $5.16.

23/08/13 (1):

ASX ((ASX))

ASX posted an in-line result but earnings growth was offset by costs growth in FY13. Costs are expected to continue growing in FY14 and there is little sign of a pick-up in market activity in the period. Brokers applaud new revenues initiatives, such as OTC listings, but they won’t contribute until FY15-16. Meanwhile a solid yield is not enough to overcome a full price. No change to four Sells and a sector Buy from JP Morgan. Consensus target steady on $33.76.

Alumina ((AWC))

Alumina’s result goes down as a beat but only on a less than forecast loss. Brokers agree there’s not much to look forward to unless alumina/aluminium prices rally, and changes to US inventory rules suggest the opposite in aluminium. No change yet to four Sells and two Buys, with UBS (Buy) citing further Aussie weakness for its rating. Consensus target unchanged on $1.06.

Brambles ((BXB))

Brambles result met expectations but FY14 guidance was disappointing. Credit Suisse (Hold) suspects a bit of conservatism but admits growth is hard to see, echoing other brokers. The stock took a tumble on release which is enough to see CIMB upgrade to Buy on more attractive value, although Deutsche downgraded on the assumption margins will not expand as hoped, making three Buys to five Holds. Consensus target falls to $9.64 from $9.81.

Fortescue Metals ((FMG))

Fortescue posted a clear beat on greater than expected cost reductions. A dividend of 10c also surprised against 4c forecasts and signalled FMG’s shift into free cashflow generation. More than one broker suspects this will lead to a re-rating for the stock over the next 12 months. Five Buys and a balance of Holds retained. Consensus target rises to $5.04 from $5.00.

Fairfax Media ((FXJ))

Following an in-line result and no guidance, Fairfax is splitting brokers between those seeing a faint glimmer of hope and those quietly losing the faith. Newspaper profits continue to decline and digital is not growing sufficiently to offset. Management is committed to cost cutting but will this improve earnings or undermine quality? Four Sells dominate two Buys with no changes to date. Consensus target steady at 60c.

Insurance Australia Group ((IAG))

IAG’s result was in line with its pre-announcement but hit the top end of the range. CIMB sums up a wider broker view in suggesting the performance was so good it will never happen again. CIMB has downgraded to Sell to make five with a balance of Holds. Brokers remain positive, just not as positive as the market is pricing in. Consensus target rises to $5.59 from $5.51.

Origin Energy ((ORG))

Origin has two businesses, downstream and upstream. Downstream had a tough year and FY14 will be just as tough. By FY15-16, first LNG is expected to flow making upstream the future significant earnings driver. Hence no Sells amongst the brokers, just a balance of unchanged Buys and Holds. Consensus target falls to $14.15 from $14.46.

Seven West Media ((SWM))

Like Fairfax, Seven West is suffering from a decline in print media earnings. Unlike FXJ, the impact becomes less and less each year. TV is nailing it, leading to a good share of ad-spend. Sporting broadcasts will suck up excess election ad-spend as well. SWM’s result beat consensus and most see little to change the theme in FY14. Six Buys to two Holds unchanged. Consensus target rises to $2.54 from $2.43.

Toll Holdings ((TOL))

Brokers consider Toll’s in-line result to be reasonable in a tough market. There is not much sign of improvement on the FY14 horizon. Strong cashflow pleases brokers but a rare decision not to provide guidance is worrisome, particularly given a better than expected dividend payment. Brokers are split two Buys to two Sells and a balance of Holds, no changes. Consensus target falls to $5.51 from $5.56.

Tatts Group ((TTS))

Tatts posted a beat on good lottery and wagering growth, but there are two issues to consider. One is perceived overvaluation. The other is the growth of digital and fixed odd betting competition. Thus of an unchanged three Sells and five Holds, even the more positive brokers can’t get past the share price. Consensus target rises to $3.14 from $3.11.

22/08/13 (2):

Ausenco ((AAX))

Ausenco’s result was in line with guidance but reduced FY14 guidance has led UBS to downgrade to Hold, making five Holds. AAX has a strong balance sheet and is cutting costs but customers are also cutting expenses and hence the outlook remains sluggish for the service provider. Consensus target rises to $1.55 from $1.53.

ARB Corp ((ARP))

It’s a matter of ho-hum, another excellent result from ARB in line with expectations. The company has consistently defied weak consumer sentiment while benefiting from solid vehicle sales, but growth did begin to slow in the second half and brokers feel FY14 may just be a little tougher. No change to three Holds and one Sell. Consensus target rises to $12.33 from $12.08.

Clough ((CLO))

Clough’s exposure to energy rather than mining means the company posted an excellent result, in line with previously upgraded guidance. CLO is cashed up and has plenty of work in hand, which is likely why Murray & Roberts is offering $1.46 to take over the company. UBS has downgraded to Hold on the post-bid rally, while Credit Suisse stays on Hold and CIMB (Buy) is yet to update. Macquarie is advising and is thus restricted. Consensus target rises to $1.43 from $1.40.

CSG ((CSV))

CSG’s result fell a little short of the one broker covering the stock before one-offs but we’ll call it in line. Macquarie believes Print is now stabilising and Financial Solutions is looking solid. Earnings should grow in FY14 but the stock is well priced, hence Hold. Target rises to 90c from 77c.

Fantastic Holdings ((FAN))

Fantastic by name, but that’s about where it ends. FAN’s result was in line but only with previously downgraded guidance. It’s simply tough out there is consumer discretionary land with no light at the end of the tunnel as yet. Competition is also increasing. Credit Suisse has given up and downgraded to Hold, to make three from three. Not expensive, but not offering much near term. Consensus target falls to $2.28 from $2.38.

Fletcher Building ((FBU))

After a long wait, things are starting to improve in NZ, but the building picture remains subdued in Australia with no immediate sign of improvement. An in line result brought a sigh of relief from the market and while earnings downgrades seem to be coming to an end, structural challenges mean upgrades are not expected. Nor are the shares considered cheap. Credit Suisse has downgraded to Sell to make it three, while two Buys are hanging in there. No consensus target price as FBU is a Kiwi.

GWA Group ((GWA))

GWA’s result was in line with the company’s profit pre-announcement. Building approvals were just starting to rise towards the end of the period and profitability has improved, which has brokers thinking earnings growth can be achieved in FY14. Citi has upgraded to Hold and UBS to Buy with Deutsche still waiting to be convinced on Sell. CIMB has downgraded to Hold on a full valuation. Consensus target rises to $2.68 from $2.31.

NextDC ((NXT))

NXT’s result blew JP Morgan’s socks off. The only covering broker probably wishes it had revisited the stock a little earlier given a target increase to $3.59 from $2.50. Thank God it had a Buy rating. NXT has its head in the cloud and “unambiguously strong demand” at its Melbourne data centre is what caught the broker out.

Ridley Corp ((RIC))

Ridley’s M&A potential and the value of its land are the only factors keeping Citi on Buy following a decline in FY13 earnings. That said, RIC improved in the second half so the broker feels it can recover. CIMB (Hold) is the only other covering broker and is yet to update. Consensus target falls to $1.00 from $1.10.

Sedgman ((SDM))

Only three broker cover Sedgman and only one, Deutsche, has updated so far. SDM is exposed to a weak coal market with no improvement in sight and the broker retains Hold, joining to other Hold and a Buy pending update. Consensus target unchanged at 90c.

Slater & Gordon ((SGH))

Quick, there goes an ambulance. Macquarie is the only broker covering Slater & Gordon and retains Buy, noting the UK expansion is going well with more opportunities sought. Result in line and target raised to $3.50 from $3.28.

SMS Management & Technology ((SMX))

Credit Suisse (Hold) has mysteriously raised its target for SMS due to a higher market PE, offsetting two target cuts from three brokers downgrading to Sell. The outlook seems little more than gloomy given earnings fell in the second half from the first, defying normal seasonal trends, and the first half FY14 looks set for more falls. Consensus target rises to $4.71 from $4.68.

Tassal Group ((TGR))

Smaller companies often only see updates from covering brokers once every six months, which is why we can see some big target jumps on occasion. Tassal’s result was “in line” but the consensus target has risen to $3.00 from $2.20. Both covering brokers note positive trends and suggest the tide has turned. CIMB is nevertheless still on Hold to JP Morgan’s Buy.

Tigers Realm Coal ((TIG))

Tigers is expecting first production in 2015-16 so the result is academic, with the one covering broker, Credit Suisse, retaining Buy on an unchanged 25c target.

ThinkSmart ((TSM))

ThinkSmart’s UK operation is performing well and Australia is expected to turn around, leading JP Morgan (Buy) to predict a sharp rise in earnings in FY14. JPM is the only covering broker. Target rises to 45c from 36c.

Trade Me Group ((TME))

Trade Me delivered an in line result but disappointing guidance, leading to an adverse share price reaction. The response from brokers is thus mixed, with Credit Suisse downgrading to Sell but UBS upgrading to Hold and CIMB to Buy. Macquarie (Hold) sees a good entry point on a weaker share price. No consensus target given TME is a Kiwi.

Webjet ((WEB))

Four brokers have four Holds on Webjet following a downgrade from UBS on what was ostensibly a miss. Conditions in WEB’s core air business are getting tougher and after an initial burst of on line growth outperformance, the outlook is for growth to fall back towards trend. Consensus target falls to $4.77 from $4.91.

22/08/13 (1):

Ardent Leisure Group ((AAD))

Four database brokers cover Ardent. All were on Hold until JP Morgan upgraded to Buy post result, citing a beat on forecasts across all divisions. Brokers expect a solid yield to continue into FY14. Consensus target rises to $1.70 from $1.63.

Adelaide Brighton ((ABC))

One might expect cement production to be a straightforward business, but not only does ABC split database brokers Three Buys to five Holds and two Sells (unchanged), the interim result either fell well short of or exceeded broker forecasts. It was in line with guidance, so we’ll call it “in line”. A fully franked 7.5% dividend was well received by all brokers, suggesting good cash generation and a floor in the stock price. Otherwise the outlook remains difficult in construction in the face of rising energy costs. Consensus target falls to $3.48 from $3.49.

Asciano Group ((AIO))

An in line result pleased brokers and was seen as solid in a tough environment of weak coal haulage demand and rising port competition. It’s just as well, given seven of eight database brokers had set Buy ratings leading into the result. Macquarie is sufficiently concerned about tough conditions to retain Hold, but elsewhere brokers are impressed with AIO’s progress in reducing costs and increasing efficiencies in this low end of the cycle, and no changes have been made. Consensus target rises to $5.99 from $5.78.

APA Group ((APA))

APA’s result was in line and while conditions remain a bit mixed, brokers are confident APA can deliver solid earnings growth in FY14 with acquisitions contributing. On that subject, Envestra’s rejection of APA’s takeover bid is keeping brokers from more positive ratings, with all expecting APA will have to lift its price. Credit Suisse has upgraded to Hold to make four with Deutsche on Buy but two brokers stay on Sell. Consensus target falls to $5.95 from $6.00.

Boral ((BLD))

Boral’s result was in line with guidance but only due to property sales which brokers were not expecting. Hence it goes down as a miss. Management is trying to turn things around but FY14 guidance was subdued, given weak construction in Australia and elusive profits in the US. Credit Suisse has downgraded to Hold and Macquarie to Sell to leave a mixed bag of four Sells to two Buys among eight brokers. Consensus target falls to $4.36 from $4.38.

Charter Hall Retail ((CQR))

CQR’s result was in line and has resulted in no changes to ratings or consensus target of $3.90. The result was neither exciting nor shocking, with the REIT plugging away with a quality retail portfolio offering a good yield. The issue for brokers is price, which is a bit full, Hence seven Holds on one sector Sell from JP Morgan.

iiNet ((IIN))

iiNet’s result came in at the top end of guidance so is counted as in line despite most brokers describing the numbers as solid. Revenues have fallen but cost cutting maintained earnings, while the company is looking to address subscriber numbers in FY14. The Adam Telecom acquisition is a primary driver of expected earnings growth in FY14 and beyond. Credit Suisse has upgraded to Hold to make four, against two Buys and a sector Sell from JP Morgan. Consensus target rises to $6.21 from $5.66.

Iluka Resources ((ILU))

Iluka’s result beat at the headline but only on inventory movements, so we’ll call it in line. Improving zircon sales are enough to see Credit Suisse upgrade to Buy but prices fell in the second half and management provided no outlook on the demand/price picture. Indeed it is also unclear as to whether increased volumes reflect improved demand or greater stockpiling. Macquarie (Sell) is suspicious while others remain generally positive on five Buys and two Holds. Consensus target rises to $11.75 from $11.67.

Investa Office Fund ((IOF))

The office market has dragged within the REIT sector hence brokers were well impressed with Investa’s strong result, which beat estimates. This is one REIT not overvalued by the yield seekers hence seven from eight Buys following an upgrade from UBS. JP Morgan’s Neutral is sector-relative. The balance sheet can easily cope with further investments and lease expiries are low. Consensus target rises to $3.25 from $3.24.

Seek ((SEK))

Falling job ads domestically are constraining Seek but international growth and a good result from Education brought Seek home with an in line result. Despite potentially more of the same in FY14, local job ads remain a risk and brokers find the shares just too pricey. No change to five Sell ratings with a lone Buy, CIMB, yet to update. Consensus target rises to $9.26 from $9.03.

Super Retail Group ((SUL))

Retail superstar Super Retail can do little wrong, with broker’s largely shrugging off a rare miss for their darling. Costs have risen but the company should benefit from RBA cuts while A$ exposure is hedged. Despite being much loved, SUL splits brokers on the basis of value. The true believers (two) maintain Buy while the less besotted (four) see too stiff a price and maintain Sell, with Merrills having downgraded straight to Sell from Buy. Consensus target rises to $12.21 from $11.80.

Suncorp Group ((SUN))

Suncorp’s result was in line with a pre-announced headline number which was itself below initial consensus. SUN has now transformed and de-risked itself but it’s going to be harder to grow earnings from here organically, brokers suggest. In the meantime, SUN’s excess cash reserves means a likely continuation of capital returns and that’s enough for Citi to upgrade to Buy, joining three others. Credit Suisse is focusing on industry wide difficulties in life insurance is sticking with its lone Sell. Consensus target rises to $12.95 from $12.85.

The Reject Shop ((TRS))

TRS missed on lower than expected sales revenue and falling margins. On the other hand, the company’s rapid store roll-out plans have brokers anticipating strong growth potential ahead. Only three database brokers cover the stock. Credit Suisse (Sell) thinks weak revenues overshadow the roll-outs while UBS (Buy) and Macquarie (Hold) think the other way around, but Macquarie sees the price as full. Consensus target is unchanged on $16.93.

Woodside Petroleum ((WPL))

Woodside’s result shall be called a miss because while it was above or below different broker estimates, the dividend disappointed just about everyone. And having transformed this year into a yield stock instead of a growth stock, the dividend is all important. WPL maintained its planned 80% payout ratio on underlying earnings, but the company’s earnings measure differed from the norm. Hence the miss. No change to one Buy and seven Holds. Consensus target rises to $38.77 from $38.69.

21/08/13:

Ansell ((ANN))

Ansell’s result beat consensus and brokers were largely pleased with a clear turnaround in fortunes in the second half after the company disappointed shareholders in the first. Brokers did not much get a rise out of FY14 guidance nevertheless, with organic growth difficult to come by, thus limiting upside without acquisitions. Credit Suisse cites successful product launches in upgrading to Buy but is lonely at that rating, alongside three Sells and a balance of Holds. Consensus target rises to $17.98 from $17.26.

Arrium ((ARI))

Arrium’s result just snuck into the low end of guidance and illustrated the wisdom of the company’s decision to concentrate more on iron ore than steel. Iron ore volumes and prices were solid in the second half but that said, the steel outlook has improved more so than fellow BHP spin-off Bluescope earlier suggested, with the currency providing a hand. Targets have been lifted but only Macquarie sits on Buy, highlighting debt and cost reductions and growth opportunities. Credit Suisse has upgraded to Hold to make five against one Sell. Consensus target rises to $1.18 from $1.06.

BHP Billiton ((BHP))

BHP’s result fell short of consensus. Higher interest expense and lower oil production offset cost reductions. There was nothing too surprising in the result, although the point of concern for the market is the decision to plough more capex into Jansen potash as potash prices fall. Brokers have mixed opinions, questioning the returns but welcoming BHP’s search for a partner. There were no changes to ratings, with brokers still split half-half on Holds and Buys. Consensus target falls to $38.68 from $38.95.

Coca-Cola Amatil ((CCL))

Coke’s first half result was basically in line with expectations but disappointment followed weaker than expected FY14 guidance. CCL is being hit by reduced consumer spending on the one hand and greater competition in the grocery space on the other. CIMB can’t see beverage volumes growing any faster than population ahead. Macquarie sees a negative trend and believes CCL will de-rate over the next 12 months if the situation can’t be turned around. There were no changes to ratings so brokers remain split in their views, with JP Morgan one of two Buys based on valuation to balance four Sells among the Holds. Consensus target falls to $12.45 from $13.02.

Cardno ((CDD))

Cardno’s result was in line with guidance but showed a deterioration in the second half. Brokers are nevertheless more optimistic about FY14 given CDD’s exposure to a US recovery, although Deutsche sees weak conditions persisting for a while. JP Morgan and CIMB like the company’s diversity of exposure and a decent yield means no Sells, rather three Holds and two Buys. Consensus target rises to $6.57 from $6.16.

CFS Retail Property Trust ((CFX))

CFS’ FY13 result was in line but brokers were underwhelmed by FY14 guidance. Merrills is cautious about retail and has downgraded to Hold. Overhanging the trust is CBA’s proposal to internalise management, of which there was no new news. CFS could internalise, or sell management rights, or even attract corporate activity, but nothing is clear. JP Morgan remains on a sector Sell and the only Buy is Deutsche, who is yet to update. Consensus target falls to $2.10 from $21.20.

Commonwealth Property Office Fund ((CPA))

Comm Property’s result was in line but guidance for flat growth in FY14 implies deterioration. No one much cares about the numbers at present given the upheaval caused by CBA’s proposal to internalise management. Dexus has bought a stake but denies it will bid, while the market is assuming someone will bid when brokers are less sure. The situation is binary, with no bid implying a fall back to net tangible asset valuation. A pessimistic Credit Suisse has downgraded to Sell while JP Morgan (Buy) still sees value, with everyone else on Hold. Consensus target rises to $1.17 from $1.16.

Crowe Howarth Australasia ((CRH))

Crowe Howarth is the old WHK Group by another name. The company delivered an in-line result after a tough year but FY14 guidance is weak. Yield support is waning and UBS does not see improvement ahead, hence a downgrade to Sell. Macquarie is the only other covering broker and remains on Hold. Consensus target 68c.

G8 Education ((GEM))

Strong margin growth surprised the one broker covering G8, Citi, so we’ll put this down as a beat. Operational profits are rising from recently acquired child minding centres. Citi has retained its Buy rating and lifted its target to $3.20 from $3.00.

Hills Holdings ((HIL))

Hills’ result release was more about looking forward rather than back, now that the company has sold off its troubled steel assets to Bluescope. Momentum appears to be improving in remaining businesses. CIMB has retained Buy and Citi has pulled back to Hold on valuation. Consensus target rises to $1.67 from $1.37.

Invocare ((IVC))

It was quite a large and uncharacteristic miss for this defensive stalwart, with the problem being that Aussies and Kiwis simply did not die in FY13 as fast as normal. Most brokers shrug this off to death volatility but there is still a feeling Invocare’s growth rate is slowing with competition rising. The stock is also well valued, hence only one Buy against two Sells and a balance of Holds. Consensus target rises to $10.61 from $10.53.

McMahon Holdings ((MAH))

McMahon’s result fell short of expectations and Merrills sees no sign of conditions improving, hence a downgrade to Hold. The result was also messy given the closure of the construction business but Macquarie (Buy) believes MAH can emerge a simpler and better business, albeit risks remain. Deutsche and CIMB have retained Hold ratings. Consensus target falls to 25c from 29c.

Monadelphous Group ((MND))

Mona's result fell short of expectation, but more realistically it fell short of what investors were hoping might just be another outperformance from this once high-flyer. It was not to be this time. Mona's earnings have peaked and no specific FY14 guidance was given other than "lower earnings". Even LNG prospects are disappointing. CIMB is expecting better things in FY15-16 but does expect the market to respond just yet, hence a downgrade to Hold, making two Holds to five Sells. Brokers continue to consider the stock overpriced. Consensus target falls to $15.44 from $18.23.

Oakton ((OKN))

Oakton’s result was roughly in line after a tough year featuring reduced government IT spending. A new government might provide a boost but in the meantime brokers see little improvement on the horizon. The 8% yield is safe and helps provide a share price floor along with the buyback. No change to one Buy and three Hold ratings. Consensus target falls to $1.23 from $1.24.

Oil Search ((OSH))

A lower tax rate made Oil Search’s result appear a beat but otherwise it was in line. Anticipation is building with PNG LNG now 90% complete and capex guidance not increased. Whereto from here is more in the hands of the PNG partners but brokers are not concerned, rather hoping for a nice dividend increase after first gas. No change to ratings with JP Morgan retaining its sector Sell and brokers otherwise splitting Buys and Holds on a valuation basis. Consensus target rises to $9.19 from $9.07.

QBE Insurance ((QBE))

QBE posted quite a miss which surprised brokers given macro conditions have been running in the insurer’s favour for once, including a weaker Aussie, rising US interest rates and a more benign claims environment. But there were issues in a number of areas and brokers have cut forecast earnings. Brokers still expect the macro picture to provide improvement but then it comes down to a full valuation. Two Buys meet five Holds with with JP Morgan downgrading to Sell. Consensus target falls to $16.33 from $16.37.

Sonic Healthcare ((SHL))

While Sonic’s result hit guidance it beat sceptical consensus. Cost cutting measures are offsetting hefty price cuts while medical centre margins are stable and pathology revenues have increased. Germany and the US look brighter in FY14. Not everyone is yet convinced, but some believe guidance is conservative and CIMB has upgraded to Buy to make three, matched by five yet to be convinced Holds. Consensus target rises to $15.79 from $14.57.

Salmat ((SLM))

Salmat’s result was in line with underlying guidance but fell well below at least one broker’s forecast so we’ll call it a miss. Four database brokers cover SLM and only two have updated, with all on Hold. A catalogues business is always going to struggle in a subdued retail environment and nothing looks much like improving in the short term. Consensus target rises to $2.42 from $2.38.

20/08/13:

Amcor ((AMC))

Amcor delivered a strong result featuring margin growth which slightly beat several brokers. Margin improvement should continue on cost savings and AMC is a straightforward beneficiary of Aussie weakness. Three Buy ratings from eight, and no rating changes, highlights some brokers’ feeling of the stock being well-priced, and the planned demerger is a distraction. Possible underperformance could result in the nearer term. Consensus target rises to $11.11 from $10.88.

Aurizon Holdings ((AZJ))

Aurizon’s result was roughly in line but the dividend was a surprise, with the company lifting from a 50% payout to a committed 60-70%. All up brokers feel AZJ performed well in the face of a difficult coal haulage market but that earnings growth will slow into FY14 despite the company suggesting 25%. An under-utilised balance sheet offers opportunities. Macquarie has downgraded to Hold on perceived full value, leaving three Holds to four Buys. Consensus target rises to $4.86 from $4.79.

Bendigo & Adelaide Bank ((BEN))

It was a decent performance from Bendelaide for a result largely in line with expectation. An increased dividend should suggest management confidence but management is alone, with all brokers expecting things to get tougher in FY14. Costs will rise and margins will fall, and the quality of BEN’s assets is an issue, with provisioning a bit thin. BEN is some way yet from lifting return on equity above cost of capital. UBS has downgraded to Hold leaving no Buys and two Sells. BEN has ridden the yield wave. Consensus target rises to $10.04 from $9.72.

Breville Group ((BRG))

Breville shares took a dive earlier this year when the company lost its Keurig distribution contract in Canada, but have now recovered, and some. This has not deterred four covering brokers retaining four Buy ratings on a stock with a hefty multiple. BRG’s result beat guidance and most broker estimates and brokers are thoroughly impressed. Brokers can see little standing in the way of ongoing growth, particularly in new offshore regions, and while the currency can provide a headwind BRG has offsets and is otherwise hedged. Consensus target rises to $8.12 from $7.11.

Bluescope Steel ((BSL))

Bluescope posted a result roughly in line with expectations but it was soft FY14 guidance that sent the share price into a tailspin. While brokers agree guidance was disappointing, there may be an element of conservatism and the reaction was overdone, judging by no change to five from six Buy ratings. CIMB (Hold) remains the non-believer, suggesting BSL is in structural decline. Consensus target falls to $5.50 from $5.80.

Challenger ((CGF))

Challenger offered up one of the most clear-cut beats to date and had brokers scrambling to upgrade earnings forecasts and price targets. Most pleasing was the apparent end to falling Life margins alongside improving funds management returns, with only JP Morgan (Hold) finding guidance to flat FY14 margins “modest”. Merrills (Sell) is yet to update otherwise it’s Buys all the way following an upgrade from Citi. Consensus target rises to $4.92 from $4.41.

Dexus Property Group ((DXS))

Dexus posted a solid, in line result in a tough year for office REITs. Having divested offshore and reinvested locally, Dexus is set for decent growth ahead, brokers suggest. A further 5% buyback and a disciplined approach by management sees Deutsche upgrade to Buy to make five from six. Citi (Neutral) is not alone in wondering about a possible takeover of Commonwealth Property ((CPA)) but management deflected the issue. Macquarie suggests it might lead to an equity raising. Consensus target falls to $1.14 from $1.15.

Federation Centres ((FDC))

Fed Centres’ result matched consensus and FY14 guidance was solid although a little bit below broker expectations. More than one broker wants to see FDC extract better value from its development pipeline but it might be hard as occupancy rates fall. Still, recent share price weakness means the fund is not expensive and Merrills has upgraded to Buy on a restored balance sheet, leaving three Buys and three Holds. JP Morgan remains on Sell on a sector-relative basis. Consensus target falls to $2.49 from $2.51.

Fleetwood Corp ((FWD))

Fleetwood’s result goes down as a beat but if readers have ever seen what Top Gear does to caravans, that’s what the shifting economy did to FWD in FY13. A lack of final dividend was not well received by the market. Some brokers expect a slightly better FY14 and dividend payment to resume, but there was a lack of visibility and conviction from management. This has Credit Suisse sticking to Sell but UBS and JP Morgan have both upgraded to Hold on the lower share price. CIMB (Buy) is yet to update. Several brokers have not reviewed FWD since the interim result, explaining the consensus target drop to $5.00 from $6.39.

Growthpoint Properties ((GOZ))

Only two database brokers cover Growthpoint and the result was in line. Both see opportunities ahead on sourcing industrial properties as gearing falls and an 8% yield remains attractive. Index inclusion is also on the cards. One Buy, one Hold. Consensus target rises to $2.64 from $2.62.

Imdex ((IMD))

No one was expecting good things from the mining services company in FY13 but while the result was in line, it was weak FY14 guidance which left already pessimistic brokers surprised, leading to a target price crunch for Imdex. Merrills remains on Sell on the weak outlook while the other two covering brokers are sticking to Hold on a reduced share price. Consensus target falls to 67c from 90c.

Patties Foods ((PFL))

Citi is the only database broker covering Patties and was unsurprised by a drop in profit on increasing competition. Still, PFL has managed to push through some price increases already in FY14, leading the broker to upgrade forecasts. Gearing is rich but manageable. Target rises to $1.50 from $1.40.

Yancoal Australia ((YAL))

Yancoal’s big loss was a bit of a shocker, catching brokers out. It’s probably academic as major shareholder Yanzhou moves towards privatisation, but otherwise the outlook is not all that encouraging. No change to four Holds. Consensus target falls to 82c from 97c.

19/08/13:

Automotive Holdings ((AHE))

It was a record year for Auto Holdings with the result roughly in line with brokers. Car sales have remained strong and FY14 has started well despite tough comparisons from last year. Credit Suisse is not sure such volumes can hold up thus retaining Neutral among five unchanged Buy ratings. Consensus target rises to $4.35 from $4.17.

APN News & Media ((APN))

It was a mixed result for APN in the sense it fell short of some broker expectations and beat others, but was either way a profit reduction. Radio earnings were solid and election advertising will provide a boost but while cost savings in publishing are welcomed, the legacy business is still dragging the company down. This is an issue given high gearing. UBS has upgraded to Hold given the result beat the broker, taking ratings to five Holds and three Sells. Consensus target rises to 34c from 30c.

Calibre Group ((CGH))

The mining services company had already lowered guidance but beat it, albeit Calibre’s result was in line with UBS, the only database broker covering the stock. UBS was surprised by a small increase in dividend, with the broker retaining Buy on perceived reasonable value despite a strong share price run recently. Target rises to 58c from 55c.

DUET Group ((DUE))

DUET’s result was in line with most expectations. The group has suffered from lower gas demand in WA but the dividend was confirmed and at an 8% FY14 yield, brokers find the story one of stability and a now cleaner structure (attractive to offshore investment) rather than anything spectacular. The stock is reasonably priced hence seven Holds, with Merrills (Buy) liking the yield and lack of issues facing DUE unlike other infra names. Consensus target falls to $2.17 from $2.18.

Energy Developments ((ENE))

Acquisitions helped Energy Developments to a solid gain in profit on only 10% growth in interest cost. UBS is the only database broker covering the stock and FY14 guidance fell a little short. The resumption of dividends was a positive surprise but the broker retains Hold and target is unchanged at $5.10.

Magellan Financial Group ((MFG))

As a wealth manager, Magellan has less exposure to asset classes facing structural headwinds than others, JP Morgan notes, and funds flow for the year has been very solid. The result was in line and JPM was pleased to see operational leverage of increased flows being achieved. Macquarie is the only other database broker covering the stock and expects more global funds in-flows. Both brokers retain Buy. Consensus target rises to $13.04 from $10.50.

Platinum Asset Management ((PTM))

Outflows have been slowing for Platinum and Credit Suisse wants to see more of the same before getting excited. PTM has significantly outperformed the index in the recent equity run but the result fell a little short of broker expectations. The share price has nevertheless run strongly hence brokers find the stock fully valued. One Hold and two Sells retained. Consensus target rises to $5.71 from $5.17.

Santos ((STO))

Compared to consensus Santos offered up a slight miss, but brokers don’t much care about the result. The key to STO’s value is the expected surge in cashflows on first LNG exports, and with GLNG and PNG LNG both on time or better than on time, confidence has grown significantly. Costs are also now in decline. Credit Suisse (Sell) and UBS (Hold) still see risks and are more cautious than all other database brokers on Buy. Consensus target falls to $15.51 from $15.62.

16/08/13:

AMP ((AMP))

AMP had issued a previous profit warning and the result came in at the top end of guidance. One-offs related to compliance costs and the endless AXA integration annoyed brokers but cost saving initiatives were well received, even though those initiatives will initially cost. The issue for AMP is nevertheless the structural problems surrounding the Life business. Wealth management earnings growth is also slowing. CIMB is trying to see the positives while Macquarie effectively has a “steer clear” rating for Life businesses in general. Otherwise, stock market performance is a driver. Two Sells and no Buys. Consensus target rises to $4.77 from $4.69.

Alliance Aviation Services ((AQZ))

Credit Suisse is the only database broker covering Alliance. Lower mining passenger numbers led to a miss but the broker likes AQZ’s resilient business model and opportunity for new transport contracts. Miners working on production, rather than now-winding-down construction, still need to be flown about. CS rates a Buy. Target falls to $2.15 from $2.30.

Goodman Group ((GMG))

The difficulty for Goodman is in finding quality assets in which to invest. The result was in line, and while brokers find FY14 growth guidance of 6% reliable it is less than the market would like and representative of under-deployed capital. It’s a steady as she goes investment that is priced for more. One Sell, no Buys. Consensus target has risen to $4.90 from $4.89.

HFA Holdings ((HFA))

UBS is the only database broker covering fund manager HFA. A shift to lower margin mandates in the US leads the broker to trim outer year forecasts and underlines a lack of scale on global fund of funds. UBS rates as Hold. Target falls to 85c from 90c.

Matrix Composites & Engineering ((MCE))

JP Morgan is the only database broker covering Matrix. The result beat guidance but the order book is falling and cashflow diminishing. Management is optimistic but offered no FY14 guidance. The broker is on Hold. Target rises to 95c from 85c.

Mincor Resources ((MCR))

Only two database brokers cover Mincor and only UBS has updated so far. The result was roughly in line with UBS on face value but missed on the underlying. MCR needs exploration success to offset a short mine life, the broker suggests. On valuation, UBS sticks with Hold. Consensus target rises to 75c from 70c.

Mineral Resources ((MIN))

Mineral Resources’ result just pipped forecasts and after a 33% share price run in a month and a half UBS has downgraded to Hold, leaving two Holds and one Buy. JP Morgan is wary of iron ore price volatility but Macquarie sees a positive link to iron ore expansion from the majors and a multitude of growth options. Consensus target rises to $10.97 from $9.97.

Sirtex Medical ((SRX))

Sirtex had already disclosed dose volumes so the result was no surprise. Two of three covering brokers has updated so far and no change to a Buy and two Holds. Dosage growth guidance is modest but the currency and flat costs should provide for solid margin improvement, says UBS. Consensus target rises to $12.53 from $12.49.

Wesfarmers ((WES))

It wasn’t that long ago that brokers were bemoaning a lack of growth drivers for Woolworths and nothing but upside for Coles. Now Coles is the new Woolies. Throw in weakness for coal and ever-struggling discount stores, and the cost of rolling out 20 new Bunnings warehouses, and only one broker sees enough growth potential to rate a Buy. Ironically, Merrills was the most critical of Wesfamers’ takeover of Coles back in the day. Everyone else believes the market is overpricing WES, hence five Sells. Consensus target rises to $39.72 from $38.94.

15/08/13:

Commonwealth Bank ((CBA))

Brokers basically considered it a stunning result that ticked all boxes while leading to some mild upgrades. The issue is as to whether such success can be carried into an FY14 offering low growth. No special dividend and a conservative mid-range payout ratio suggest CBA may have lost some its gloss for shareholders. Brokers continue to see CBA as the most overpriced bank with five Sells matching one Buy (Citi). Consensus target rises to $66.81 from $64.61.

Computershare ((CPU))

It’s a waiting game for Computershare as the company battles falling margins and corporate activity remains stubbornly weak despite improving markets. The result was in line but guidance disappointed. At the least the lower currency is providing support. The second half was better than the first and brokers see better things in the longer term picture. Price is a bit strong though, albeit one Sell is matched by three Buys. Consensus target falls to $10.50 from $10.65.

Carsales.com ((CRZ))

It was another cracking result from Carsales, brokers were forced to admit, but can the company keep on growing so fast each year? While CRZ continues to pursue new growth options, core businesses will begin to mature and further market share gains will be harder to achieve. Brokers are split on whether CRZ can keep up the pace in FY14 or start to ease off, with two Sells matching three Buys on a full price. Consensus target rises to $10.40 from $9.45.

CSL ((CSL))

CSL’s result missed consensus largely due to the impact of the lower currency. Growth is guided to ease in FY14 as the company spends more on R&D. While earnings forecasts have thus been lowered, R&D success is what CSL is all about so not all brokers are disappointed. An upgrade from UBS takes Buy ratings to five, although there are also two Sells. Consensus target rises to $67.82 from $65.75.

Goodman Fielder ((GFF))

The result was roughly in line and the second half showed a much better performance than the first as Project Renaissance starts to impact. But brokers despair the benefits being offset by increased marketing spend and competitive price discounting. Brokers have mixed views on whether GFF’s turnaround can continue to gain momentum in a tough and competitive market.

Mineral Deposits ((MBL))

MDL is covered by only two database brokers and only Credit Suisse has updated to date, with the result a little better than expected but potential coming from the commissioning of Grand Cote next in 2014. Consensus target rises to $4.75 from $4.40.

OZ Minerals ((OZL))

What surprised brokers most was not OZ Minerals’ loss, which was greater than expected, but the announcement of a 10c dividend. This contradicts supposed company policy and comes at a time when cashflow is negative due to waste management and M&A is on the radar. Strange. FY14 will see further cash burn and outside of a possible copper price rise, there’s not a lot to excite. Two brokers have Buy ratings but Macquarie has downgraded to Sell. Consensus target falls to $4.85 from $5.31.

Primary Health Care ((PRY))

Primary’s result was in line and a dividend increase provided a positive surprise. Pathology showed strong revenue and margin improvement but Medical Centres provide for concern given revenue per GP is falling. A new government might be beneficial but brokers tend to the cautious side, with only two Buys meeting one Sell. Consensus target rises to $5.17 from $5.09.

Royal Wolf Holdings ((RWH))

The flexibility of Royal Wolf’s business model showed its value in another solid result in tough conditions. Brokers expect more of the same ahead and only one of four covering, Macquarie, finds the price a little full. Three Buys dominate. Consensus target rises to $3.47 from $3.24.

SAI Global ((SAI))

While the result was in line with expectations the general conclusion from brokers is that after a long and difficult period of underperformance, SAI has turned the corner. Problems in Compliance remain but they are priced in and margins are in the rise. SAI has received no less than four upgrades to Buy to make five. Consensus target rises to $4.34 from $3.98.

STW Communications ((SGN))

An election related contract with the Labor party will boost STW’s second half to which contracts tend to be weighted. Having missed with its first half result, brokers suggest STW will need some more wins if it is going to meet fairly ambitious second half guidance. No change to ratings. Consensus target rises to $1.64 from $1.57.

Singapore Telecom ((SGT))

It was a strong first quarter result from SingTel which beat expectations on strong revenues in Singapore and cost cutting for Optus. Management nevertheless reduced FY14 guidance, with currency an issue. No change to two Buy ratings from five brokers. Consensus target rises to $3.95 from $3.75.

Skilled Engineering ((SKE))

Skilled posted a solid result largely in line with expectations and exposure to the oil & gas industry is providing growth. The problem is exposure to mining sector employment, which could deteriorate rapidly, some brokers warn. Three Buys remain from four covering brokers but Credit Suisse has downgraded to Sell after raising its target and CIMB to Hold. Consensus target rises to $3.39 from $3.03.

Southern Cross Media ((SXL))

Regional radio provides media defensiveness for Southern Cross while metro radio revenues fell and ad spend remained weak in FY13, leading to a result at the low end of guidance but nevertheless in line. Brokers are generally pleased and the election will boost ad spend, but affiliated Ten ((TEN)) TV ratings are wallowing and need to improve. Consensus target rises to $1.59 from $1.46.

Tox Free Solutions ((TOX))

Tox’s result was largely in line thanks to some new resource sector contracts offsetting a lost Woodside ((WPL)) contract. The integration of newly acquired Wanless provides upside for FY14 earnings but competition is hotting up in the space, the broker notes. All four covering brokers remain on Hold. Consensus target falls to $3.19 from $3.38.

WorleyParsons ((WOR))

Worley’s result was not bad but just scraped in at the bottom end of guidance and fell short of some brokers. FY14 guidance is stronger but reliant on M&A and the weaker Aussie. The worst of the mining impact has probably past but brokers believe WOR must realise its growth potential. A stiff price means only two Buys and one Sell. Consensus target rises to $23.31 from $22.69.

14/08/13:

Amcom Telecommunications ((AMM))

Amcom’s result was in line with expectations and solid, as far as brokers are concerned, providing evidence the localised NBN alternative can leverage further dollars off fibre laid. A new focus on cloud services will underpin FY14 double-digit earnings growth, Macquarie suggests. All four covering brokers are enamoured but two think the valuation is now relatively full. No change to two Buys and two Holds but consensus target rises to $2.12 from $1.96.

Bradken ((BKN))

Bradken’s result managed to beat expectations in a tough year for mining services providers. FY14 will likely see more of the same although brokers are split between those saying “trough” and those saying “more to come”. BKN’s mining consumables provides more cashflow certainty than most peers which supports a decent yield, but equipment manufacture is in the doldrums. A bottom-picking bounce sees two brokers downgrade back to Hold to leave only two Buys and one Sell from the pessimist (Merrills). Consensus target rises to $5.95 from $5.85.

Domino’s Pizza Enterprises ((DMP))

Brokers are now used to Domino’s topping forecasts so have come to expect supreme double-digit growth. Hence the FY13 result was in line and more is expected in FY14. The Aust-NZ business outperformed, offsetting weakness in Europe. But the big news is the acquisition of a 75% stake in Domino’s Japan at a good price, which has analysts falling about themselves in admiration. Japan will offset Europe, even though Europe is expected to improve. JP Morgan and Deutsche Bank ha upgraded to Buy meeting CIMB, but the other two coverage brokers are Holding the anchovies on a fullish price. Consensus target has risen to $12.29 from $10.90.

Mirabela Nickel ((MBN))

Mirabela missed big time, on lower realised nickel prices and higher costs than expected, leading brokers to suggest the company may not be long for this world. A bounce in nickel price would prove a welcome saviour, but failing that Credit Suisse believes MBN will have trouble paying its debts and Citi is suggesting “no equity value”. The only other broker to cover the stock, Macquarie is yet to update. No change to one Buy (Citi, funnily enough) and two Hold ratings. Consensus target unchanged.

REA Group ((REA))

Brokers were yet again left shaking their heads in disbelief as the old realestate.com yet again beat consensus, despite an 8% fall in Aust listings. Nothing is expected to derail what is possibly the best stock on the market in the shorter term, but at over 30x earnings this much-loved offering can only boast seven from seven Hold ratings.

Reckon ((RKN))

Reckon’s result fell short of expectations and brokers don’t reckon there’s anything particularly positive to say. FY14 growth guidance reflects only the absence of royalty payments to lost partner Inuit, while Macquarie warns new acquisitions lead the company into more competitive waters. Other brokers are not quite so downbeat nevertheless but new product launch success will be critical. No Buys, one Sell. Consensus target rises to $2.41 from $2.34.

Stockland Corporation ((SGP))

Stockland posted a big fall in profit that was roughly in line with expectations if you take out a big tax credit. The problem is weakness in 20% of the portfolio (residential) is overwhelming relative positives in the other 80%. Management is thus cautious on FY14 but brokers agree resi is looking a little better, although patchy across the country. Macquarie also warns SGP’s shift into more retail and industrial means a shift to lower returns. No ratings changes, with brokers split four Buys to two Sells. Consensus target has fallen to $3.91 from $3.92.

13/08/13:

Coffey International ((COF))

Only two database brokers cover Coffey. The result was in line with UBS’ expectations, with tighter working capital and lower net debt the highlights. At 10-15%, COF’s exposure to resources is less than most assume, UBS notes, yet the outlook remains challenging and no guidance was provided. Consensus target has risen to 15c from 14c.

GPT Group ((GPT))

GPT is a low-growth defensive REIT boasting a quality portfolio across retail office and industrial assets. The result was roughly in line but organic growth is slowing. Management has guided to 5% FY14 growth and brokers assume this can be achieved although a lower than expected dividend has brokers suspecting acquisitions are on the agenda, which may drive growth or prove unappealing as conditions deteriorate, depending on which analyst one reads. No change to ratings which see two Buys and no Sells. Consensus target has fallen to $4.01 from $4.03.

JB Hi-Fi ((JBH))

JB Hi-Fi’s result hit the top end of guidance and beat expectations. The company has performed well in a subdued retail environment but while sales volumes impressed, analysts are concerned growth is centred in new lower margin products while growth in traditional, higher margin lines is waning. More stores will be rolled out and management expects 6-8% FY14 sales growth, but a lot is dependent on the economic climate to which JBH is leveraged. The stock has also run hard recently, explaining three Sells to two Buys, and one downgrade to Neutral. Consensus target has risen to $16.75 from $15.19.

James Hardie Industries ((JHX))

James Hardie’s result beat most expectations and while not outstanding, most analysts agree momentum appears to be building which may suggest a trough has been seen. Primary demand growth is now strong, management suggests, and brokers acknowledge exposure to a rising US housing market. The problem is the share price, which brokers find full. Hence no Buys, one Sell and one upgrade to make seven Holds. Consensus target has risen to $16.75 from $15.19.

Newcrest Mining ((NCM))

The beleaguered miner’s result slightly beat most expectations following prior write-down guidance. Gearing has become an issue but while production growth should create sufficient cashflow, analysts are wary that risks surround fairly ambitious guidance. Guidance is vague. Gold price volatility will remain a risk, or reward, with brokers cautious. The recent share price bounce sees four brokers downgrade, leaving no Buys and four Sells. Consensus target has fallen to $11.79 from $12.20.

UGL ((UGL))

UGL’s result came in at the low end of the guidance range and roughly in line with most brokers. The announced demerger dominates discussion, with analysts mostly unenthusiastic. The 2015 plan provides time for UGL to get things in order but mining services is expected to continue deteriorating, with pending big contracts critical. CIMB has downgraded to Sell to make three, with only one Buy (not yet updated). Consensus target has fallen to $7.84 from $8.43.

12/08/13:

Aquarius Platinum ((AQP))

Two database brokers follow Aquarius. The result slightly beat Deutsche Bank after a very tough year with Kroondal now running at full capacity and Mimosa above nameplate.  The broker believes grades and recoveries have now reached their peak, and management sees flat PGM prices in FY14. Hence little earnings upside. The broker retains Buy but has reduced its target. Consensus target falls to 94c from 96c.

Tabcorp Holdings ((TAH))

Tabcorp is a stock that has the analyst community split, and nothing has changed post result. The result beat some brokers, missed others, but was slightly ahead of consensus. The debate is as to whether growing fixed odd competition (eg Waterhouse et al) will reduce tote betting market share or float all boats on increased margins and yields. Given disagreement, brokers are split three Buy, three Hold and three Sell. No change to consensus price target.

09/08/13:

Aurora Oil & Gas ((AUT))

Aurora’s earnings fell short of most expectations but low-cost production growth potential is what’s relevant and costs are coming down. Drilling continues and once capex is spent, debt can be repaid and AUT will become a cash cow. Takeover potential has waned with maturity. Brokers are split on valuation. Consensus target has fallen to $3.76 from $3.79.

BWP Trust ((BWP))

Result in line. As the owner of Bunnings ((WES)) warehouses BWP’s portfolio is unlike that of other REITs. Recent acquisitions will not provide a lot of accretion and while the yield is solid the price is a bit too steep for most brokers. UBS is the exception, suggesting yield provides price support. No change to two Hold and two Sell ratings or to consensus target.

Henderson Group ((HGG))

Henderson’s result was in line and the fund is benefiting from an improving macro backdrop and stronger equity markets. Merrills (Neutral) sees limited ongoing upside from equity markets but Citi sees momentum building fund inflows. UBS has upgraded to Buy on what it sees as better operational momentum, while Citi has downgraded to Neutral for now, given fund flows have already been priced in. Consensus target has risen to $3.07 from $2.90.

Rio Tinto ((RIO))

It was an underwhelming but in-line result for Rio. Iron ore sales have been solid but capex in some areas has exceeded forecasts and the failure to sell Pacific Aluminium is a disappointment. Cost reductions are nevertheless welcome and there should be more to come ahead in what brokers suggest will be a much better second half. Ongoing asset consolidation also provides upside. Rio scores a perfect eight from eight Buys. Consensus target has risen to $75.34 from $74.95.

Telstra ((TLS))

Telstra’s result beat expectations on a particularly strong performance from Mobile (Citi suspects TLS now has 50% of the market) and positive earnings across the board, including fixed line. Some risk surrounds government policy but brokers aren’t overly concerned. Of more interest is whether or not TLS will increase its dividend in FY14 or FY15, with some brokers forecasting just that, but JP Morgan one who believes cashflows could be directed to bolt-on acquisitions as the NBN rolls out. The other issue is a hefty price, with only one of eight brokers on Buy (Merrills). Consensus target has risen to $4.82 from $4.69.

08/08/13:

Twenty-First Century Fox ((FOX))

This result was always going to be messy given it is the first post the break-up of News Corp. At the end of the day it was a "miss" on earnings but revenues exceeded expectations, with strong cable numbers overcoming weakness in television and the timing of films. Advertising is showing positive signs despite the 2013 numbers having to cycle 2012 US election comps. Brokers are positive on Fox, showing a perfect three from three Buys, suggesting this first result sets the base ahead of what is expected to be a strong FY14. Consensus target has risen to $38.50 from $37.25.

FlexiGroup ((FXL))

Brokers remain very positive on FlexiGroup after it posted a fourth year in a row of double-digit growth and exceeded forecasts. The stock has had a pretty good run and is not cheap, but with solid earnings visibility, a commitment to innovation and a return on equity in excess of 20% brokers are still happy with their four from four Buy ratings. UBS sees acquisitions as providing the potential catalysts ahead, rather than further multiple expansion. Consensus target has risen to $5.02 from $4.65.

07/08/13:

Challenger Diversified Property ((CDI))

Only three brokers cover in the database cover CDI and UBS has upgraded to Buy post result given a 7.3% yield and 7% discount to NTA. JP Morgan also likes CDI's yield and discount but notes asset sales are planned which will dilute earnings and 13% of income will roll off when leases expire in 2015. Hence the broker remains on Hold. BA-Merrill Lynch notes the buyback is now over and CDI's development pipeline has been reduced but retains Buy all the same. Consensus target has risen to $2.72 from $2.70.

Cochlear ((COH))

Cochlear had already issued a profit warning in June so the result fell inside the new guidance range, but still looked worse than indicated. COH has recovered from the N5 recall last year but the N6 release may be held up on US regulatory constraints which will delay upgrade sales. The sooner N6 can hit the market the greater the jump COH has on competitors but competition is the company's biggest problem, with a competitor now emerged in China as well. CIMB suggests the company is ex-growth for the time being, and most brokers see the stock as expensive, hence five Sell ratings and no Buys. Consensus target has risen to $54.89 from $54.57.

Downer EDI ((DOW))

It's been a solid turnaround for Downer from wilted Waratah to market darling boasting a perfect eight from eight Buys, unchanged post result. A solid result in tough conditions indicates DOW's capacity to win contracts in other areas as mining capex peaks. The company's recurring revenues are being undervalued by the market, Deutsche Bank believes, while Macquarie hails DOW's best-in-market cashflows. FY14 guidance is flat on FY13 but brokers consider the stock to still be offering compelling value. Consensus target trimmed to $5.20 from $5.37.

Iress Market Technology ((IRE))

An in-line result was overshadowed by the acquisition of Avelo in the UK, which brokers argue will add scale and diversification to Iress' earnings. The transition to the XPLAN platform is a positive but will take time and conditions remain tough. Core Aust/NZ and Canadian businesses remain challenged in particular, meaning such acquisitive growth is needed to overcome weak organic growth. The brokers consider IRE to be well-priced hence all five covering are on Hold following two upgrades from Sell. Consensus target jumps to $8.45 from $7.44.

06/08/13:

ResMed (RMD)

Brokers have hailed yet another record breaking quarter of revenues for the company, and further margin increases. The result beat consensus at the operational level and a lot if hedging profits and a tax one-off are considered. The next quarter should see pricing pressure on devices with competitive bidding expected to impact on price renegotiations yet to occur, but brokers agree RMD's margin buffer allows room for further outperformance and margins may yet increase further. The currency is also favouring RMD. Two brokers have upgraded, to Buy ratings, and the consensus target has risen to $5.92 from $5.53.

02/08/13:

Transurban (TCL)
Traffic numbers were known already but costs were lower than expected, leading to a beat on most brokers' numbers. The outlook is positive for growth acceleration in FY14 and a guidance was well-received, particularly the 34c dividend. Opportunities include the M5 expansion and CityLink de-bottleneck. Credit Suisse is a little worried about the impact of the Chatswood-Epping rail line ahead while JP Morgan sees a full valuation. No change to ratings. Consensus target rises to $6.66 from $6.54.

01/08/13:

Energy Resources Australia (ERA)

Management noted the short term outlook is constrained by lower realised uranium prices but the longer term outlook looks encouraging. The result fell short of BA-Merrill Lynch due to lower prices and the broker has lowered forecasts going forward. The broker is disappointed the CEO is resigning but remains confident in the management team. JP Morgan saw a solid result and a lower loss than expected, but cites full valuation. Credit Suisse saw solid Ranger Deeps progress offset by cash burn. All up a mixed response from brokers. No change to ratings. Consensus target rises to $1.63 from $1.60.

31/07/13:

ALE Property (LEP)

There were no surprises in a solid result. ALE is a defensive proposition with quality tenants and offers an attractive dividend yield. The problem is the stock is more than fully priced, and the two brokers covering the stock both have Sell or equivalent ratings. No change to those ratings. Target falls to $2.08 from $2.10.

Navitas (NVT)

Navitas' full year result was roughly in line with brokers, a little above and a little below some forecasts. The numbers were seen as "solid", with strong cashflow and lower debt the highlights. Domestic revenues appear to be improving but a significant valuation premium to the market has some brokers reticent to recommend Buy, despite attractive longer term growth opportunities. No change to ratings. Consensus target rises to $5.77 from $5.19.

29/07/13:

Australand Property (ALZ)

Australand's first half result fell slightly short of consensus, sparking a sell-off. Brokers are not concerned nevertheless and consider the selling an overreaction. Full-year guidance was confirmed at 3-4% earnings growth in line with consensus, and pre-sales and a traditional second half skew provide analysts with confidence. Growth should be solid if unspectacular in a still difficult residential property market. No change to ratings. Consensus target rises to $3.66 from $3.65.

GUD Holdings (GUD)

GUD's result was in line with a recent trading update (profit warning) but disappointing to brokers nevertheless. The company is facing significant competition across all business sectors and the lower currency provides a further headwind. Analysts have downgraded forecasts to weak to flat growth and foresee potential downside risk. The special dividend was a nice surprise and the ongoing yield remains healthy but the risks are too great for most brokers. Three ratings downgrades followed, all to Sell, for a total of four Sell ratings from six and no Buys. Consensus target falls to $6.14 from $6.45.
 

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