Weekly Recommendation, Target Price, Earnings Forecast Changes

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            [1] => ((AGO))
            [2] => ((BDR))
            [3] => ((MGX))
            [4] => ((DJS))
            [5] => ((RRL))
            [6] => ((SRX))
            [7] => ((QAN))
            [8] => ((NHF))
            [9] => ((CDD))
            [10] => ((HGG))
            [11] => ((NCM))
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            [3] => MGX
            [4] => DJS
            [5] => RRL
            [6] => SRX
            [7] => QAN
            [8] => NHF
            [9] => CDD
            [10] => HGG
            [11] => NCM
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This story features MGX RESOURCES LIMITED, and other companies.
For more info SHARE ANALYSIS: MGX
The company is included in ALL-ORDS

By Rudi Filapek-Vandyck, Editor FNArena

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 January 6 to Friday January 10, 2013
Total Upgrades: 8
Total Downgrades: 4
Net Ratings Breakdown: Buy 37.39%; Hold 44.84%; Sell 17.77%

Local stockbrokers have been surprisingly busy upgrading and downgrading individual ASX-listed stocks in what is best regarded as the first, slow week of share market research activity leading into the new calendar year. Investors better not draw too many conclusions from what has remained an overall easygoing, placid week.

A few observations are worth keeping an eye on: views remain highly divided on what the future direction will be for gold prices this year, but several stockbrokers are switching towards a more favourable approach for "oversold" gold miners, regardless of their views on the direction of gold bullion.

Amidst an overall flatlining profile for commodities in general, with the optimists anticipating better times later in the year, the overall view remains that iron ore is destined for lower prices as the year unfolds, yet nobody is projecting mayhem in 2014. A growing number of analysts is succumbing to the view the outlook for crude oil prices is for weakness, not strength this year.

In the slipstream of precious metals, the view is that 2014 can potentially become the year that uranium makes its long anticipated come-back, while prospects seem to have improved for nickel, lead and zinc.

Due to the limited number of research reports released, overall changes to consensus targets and estimates has remained rather benign. Investors should note that while Amcor is on top of the table for negative changes to earnings estimates, this is a direct result of the Orora spin-off. Underlying, the trend is positive for Amcor, not in the least because of a weaker AUD.

Weekly Upgrades

Oil Search ((OSH)) upgraded to Neutral from Sell by Citi. B/H/S: 5/1/1

Citi has rolled forward its oil & gas sector valuations and adjusted for lower 2014-15 Brent crude forecasts (ca 10%) and an offsetting lower AUD. The result is a target price increase for Oil Search to $8.42 from $8.22 and thus an upgrade to Neutral.

Atlas Iron ((AGO)) upgraded to Outperform from Neutral by Credit Suisse. B/H/S: 2/3/3

Credit Suisse has slightly increased its iron ore price forecasts over the next two years. While mild, the flow-through impact on Atlas earnings forecasts is still significant. Target unchanged but rating upgraded.

Beadell Resources ((BDR)) upgraded to Buy from Neutral by Citi. B/H/S: 4/1/0

The broker has updated its forecasts post Beadell’s December quarter production report, with a roll forward of valuation offsetting lower earnings. Cash generation was strong and the BDR share price has weakened, leading the broker to upgrade its rating on an unchanged $1.00 target.

Mt Gibson Iron ((MGX)) upgraded to Neutral from Underperform. B/H/S: 2/3/2

Credit Suisse has slightly increased its iron ore price forecasts over the next two years. While mild, the flow-through  impact on Mt Gibson earnings forecasts is still sufficient to prompt an increase in target to $1.00 from 95c and hence an upgrade to Neutral.

David Jones ((DJS)) upgraded to Neutral from Underperform by BA-Merrill Lynch. B/H/S: 0/6/2

The broker has tempered its negative view on David Jones’ sales in the period ahead. The result is a lift in earnings forecasts and target increase to $2.90 from $2.50. This leaves DJS appropriately valued in the broker’s view hence and upgrade to Neutral.

Regis Resources ((RRL)) upgraded to Neutral from Underperform by Citi. B/H/S: 1/4/1

While the broker expects a weaker AUD from here, it is also forecasting a gold price below US$1000 by late 2014. The impact is a drop in Regis’ target price to $3.00 from $3.70 which, in a case of the tail wagging the dog, brings RRL in line for an upgrade with respect to its current share price.

Sirtex Medical ((SRX)) upgraded to Buy from Neutral by UBS. B/H/S: 2/0/1

The broker was positively surprised by dose sales well ahead of forecast for Sirtex in the second quarter. While the broker is not assuming such growth ad infinitum, it’s enough to see a target price increase to $15.00 from $12.60 and hence an upgrade to Buy.

Qantas ((QAN)) upgraded to Neutral from Underperform by Credit Suisse. B/H/S: 0/7/1

The broker believes airline market dynamics appear to have stabilised somewhat and expects Qantas’ upcoming strategy day to provide some positives. On the basis of share price weakness, the broker has upgraded.

Weekly Downgrades

Nib Holdings ((NHF)) downgraded to Sell from Neutral by Citi. B/H/S: 1/0/2

The broker believes the market is pricing in overly ambitious growth expectations for Nib. The company intends to increase its premiums by 10% by FY15 and expects modest policyholder growth, but the broker expects customers will be more difficult to attract at the price. An increase in forecast earnings leads to a target increase to $2.30 from $2.10 but Citi sees overvaluation.

Cardno ((CDD)) downgraded to Neutral from Overweight by JP Morgan. B/H/S: 1/4/0

Cardno has reached the broker’s target price and the incumbent CEO has announced his retirement. The broker sees market caution until the new, unknown CEO establishes himself. Target falls to $6.65 from $6.75 and rating pulled back to Neutral for now.

Henderson Group ((HGG)) downgraded to Neutral from Outperform by Credit Suisse. B/H/S: 1/3/0

The broker has marked Henderson’s market positions to market, resulting in a target price increase to $4.45 from $3.95. However on a valuation basis, the rating has been downgraded.

Newcrest Mining ((NCM)) downgraded to Underperform from Outperform by Credit Suisse. B/H/S: 1/3/4

While the broker expects a weaker AUD from here, it is also forecasting a gold price below US$1000 by late 2014. The impact is a drop in Newcrest target price to $8.20 from $8.75 and a double-downgrade straight to Underperform.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup

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