Weekly Recommendation, Target Price, Earnings Forecast Changes

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            [2] => ((IIN))
            [3] => ((JBH))
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            [5] => ((ORA))
            [6] => ((SUL))
            [7] => ((WOR))
            [8] => ((AWC))
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            [10] => ((CFX))
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            [8] => AWC
            [9] => ARI
            [10] => CFX
            [11] => EGP
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            [13] => AQA
            [14] => NHF
            [15] => WRT
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This story features ANSELL LIMITED, and other companies.
For more info SHARE ANALYSIS: ANN
The company is included in ASX100, ASX200, ASX300 and 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 June 16 to Friday June 20, 2014
Total Upgrades: 8
Total Downgrades: 8
Net Ratings Breakdown: Buy 39.48%; Hold 43.81%; Sell 16.71%

Changes in stockbroker ratings for individual stocks remained in balance during the week ending Friday, June 20. But underlying the trend remains supportive, despite daily profit warnings hitting investor sentiment.

FNArena registered only three changes in consensus price targets, of which two -Super Retail and Skilled Group- consisted of corporate profit warnings. On the other hand, seven stocks including nib Holdings, Ansell and WorleyParsons saw price targets rise throughout the week.

A similar picture emerges from earnings estimates, with Tox Free Solutions and Super Retail -both having issued a profit warning- topping the table for cuts in earnings forecasts, but with the likes of Newcrest Mining, Woodside Petroleum and Alacer Gold enjoying benign upgrades to forecasts.

All in all, overall activity continues to be dominated by corporate profit warnings, but thus far these warnings have come from smaller cap stocks in consumer related sectors, traditional media and in IT services.

Upgrades

Ansell ((ANN)) upgraded to Buy from Hold by Deutsche Bank. B/H/S: 2/2/4

The broker believes the company is on track to deliver within guidance, despite the slow economic recovery. Management is expected to focus on lifting organic growth via new products and bedding down acquisitions. The company has also enjoyed a material benefit from ongoing weakness in raw material costs.The broker's rating is upgraded to Buy from Hold, given the upside to the revised target price – raised to $22.00 from $19.30.

Federation Centres ((FDC)) upgraded to Buy from Hold by Deutsche Bank. B/H/S: 4/2/1

The company has underperformed the sector in the year to date, in part driven by market uncertainty over the extent to which development commencements and cost cutting can drive earnings growth. Still, consensus earnings forecasts are too low, in Deutsche Bank's view, and the rating is upgraded to Buy from Hold. The target is raised to $2.60 from $2.45.

iiNet ((IIN)) upgraded to Buy from Neutral by Citi. B/H/S: 3/1/3

Citi thinks iiNet is benefitting from positive momentum as the fixed broadband market continues to grow. The broker upgrades earnings forecasts by 7% for FY15 and 15% for FY16. Citi previously hesitated on the stock because of a lack of subscriber growth but the company appears to have addressed this. The broker considers the stock attractive with positive free cash flow and potential upside from M&A. The rating is upgraded to Buy from Neutral and the target is raised to $8.25 from $8.00.

JB Hi-Fi ((JBH)) upgraded to Outperform from Neutral by Macquarie. B/H/S: 5/2/1

Macquarie has looked at the issues affecting the company over the next few years. While near-term sales are likely to remain under pressure, the broker thinks the group is well placed to grow earnings with the store roll-out and incremental earnings from HOME. The stock is trading on a relatively undemanding multiple and Macquarie upgrades its rating to Outperform from Neutral. The target is raised to $19.54 from $19.19.

McMillan Shakespeare ((MMS)) upgraded to Outperform from Neutral by Credit Suisse. B/H/S: 3/0/1

The stock has fallen around 17% over the last month reflecting a combination of concern over the CEO's resignation, uncertainty over earnings and regulatory risk. The broker does not think this concern is justified and, amidst other demanding valuations and/or downside risk to earnings, the stock could be a good place to park. The rating is upgraded to Outperform from Neutral and the target is lowered to $10.75 from $12.75.

Orora ((ORA)) upgraded to Outperform from Neutral by Credit Suisse. B/H/S: 8/0/0

Corrugated box volumes seem steady, enabling Orora to translate cost savings into profit, as expected. Credit Suisse upgrades the rating to Outperform from Neutral. The target is raised to $1.60 from $1.40. The broker assumes value is sourced form earnings growth and not a stock re-rating.

Super Retail ((SUL)) upgraded to Neutral from Underperform by Credit Suisse. B/H/S: 6/2/0

The company is downgrading expectations for FY14 because of a sharp downturn in sales in the fourth quarter. Credit Suisse thinks slowing momentum is suggesting downgrades to FY15 forecasts of 5-10%. The broker lowers the target to $8.60 from $9.50 and upgrades the rating to Neutral from Underperform.

WorleyParsons ((WOR)) upgraded to Overweight from Neutral by JP Morgan. B/H/S: 3/5/0

JP Morgan believes the company now presents a clear path to earnings growth in the medium term and investors are being more than compensated for the near-term risks, despite near-term pressures on spending. The rating is upgraded to Overweight from Neutral and the target is raised to $18.56 from $16.58. The broker considers the engineering base and history of working on complex projects leaves the company well placed to win new work over time.

Downgrades

Alumina ((AWC)) downgraded to Underperform from Neutral by BA-Merrill Lynch. B/H/S: 3/2/3

The broker is downgrading to Underperform from Neutral and lowering its target to $1.20 from $1.35. Merrills believes the market is pricing in an alumina price surge which is neither evident nor imminent. The broker does not believe a "nickel style" price surge is about to happen. While recognising the Indonesian export ban has put pressure on Chinese refineries the broker observes the alumina refining market remains in surplus.

Arrium ((ARI)) downgraded to Sell from Hold by Deutsche Bank. B/H/S: 2/3/3

Deutsche Bank is downgrading to Sell from Hold because of the significant iron ore price risk, and risk to the balance sheet associated with reduced earnings. The steel manufacturing business is also continuing to underperform. The target is lowered to 65c from $1.00. Deutsche Bank's FY15 iron ore price expectations have declined 10% to US$89.3/t, 4.5% below the current spot price. The broker does not think Arrium is at risk of breaching covenants but an iron ore price of US$75/t would require an equity raising.

CFS Retail ((CFX)) downgraded to Underperform from Neutral by Credit Suisse. B/H/S: 0/5/2

The stock has outperformed the A-REIT sector by 1% since December, supported by the broader yield rally, improved retail sales and internalisation of management. Credit Suisse has made a deeper analysis of the operations and valuation metrics and moves the rating to Underperform from Neutral. The broker expects average net operating income growth of 3.0% to 2016. The target is reduced to $2.05 from $2.07.

Echo Entertainment ((EGP)) downgraded to Neutral from Buy by Citi. B/H/S: 3/2/3

The company's trading update was positive, with revenue accelerating since the March quarter. Citi upgrades earnings forecasts by 11% in FY14 and 7% in FY15. The broker notes The Star is outperforming the Queensland properties and gaming spending per visitor has benefited from external driver and a revamped loyalty program. Citi downgrades the rating to Neutral from Buy as, while the company is delivering on cost savings and revenue trends are stronger, a more bullish stance requires evidence of longer-term market share gains. Target is raised to $2.95 from $2.70.

Mineral Resources ((MIN)) downgraded to Neutral from Outperform by Macquarie. B/H/S: 0/2/1

Mineral Resources has been unable to agree on terms of a scrip offer for Aquila Resources ((AQA)). AQA's chairman will accept Baosteel's bid for his 29% holding and MIN will decide whether to also sell its 13% AQA holding to Baosteel, losing $20m in the process. MIN can handle the $20m but it is the loss of reputation which will hurt most, the broker suggests. Baosteel had threatened to take its ball and go home, providing no support for the West Pilbara project unless its bid succeeds, and the WA government is very sensitive about the accompanying port project. The broker has slashed its FY15 earnings forecast, including an adjustment for the week iron ore price. Target falls to $9.94 from $13.97 and rating downgraded to Neutral.

nib Holdings ((NHF)) downgraded to Underperform from Neutral by Credit Suisse and to Neutral from Overweight by JP Morgan. B/H/S: 2/3/1

The company has outlined a strategy to address increased churn and claims inflation and is confident it can deal with the current margin decline. Credit Suisse has lowered FY14 and FY15 earnings forecasts by 5.1% and 3.5% respectively. A 9c special dividend is estimated, fully franked. The target is raised to $3.00 from $2.95 and the rating is downgraded to Underperform from Neutral. Nib highlighted margin pressures due to claims inflation but also outlined counter-measures and announced capital management initiatives. JP Morgan believes margins can be restored in FY15 on premium increases but notes that despite the negative reaction, the stock has outperformed recently and enjoys a premium valuation. Time to pull back to Neutral, with target rising to $3.03 from $2.85.

Westfield Retail ((WRT)) downgraded to Underperform from Neutral by Macquarie. B/H/S: 2/1/2

The broker still believes Westfield Retail shareholders will be paying too much for the benefits afforded by the Scentre proposal, but has assessed WRT's value on the assumption the proposal goes ahead. Scentre would have a subdued earnings growth profile, susceptible to further downside risk on dilutive asset sales, and dividend growth will be restrained by relatively high gearing, the broker warns. If the deal does not proceed, WRT is already trading at the broker's target. Hence price risk is to the downside and the broker downgrades to Underperform. Target unchanged at $3.18.
 

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup

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