Weekly Recommendation, Target Price, Earnings Forecast Changes

This story features ADBRI LIMITED, and other companies. For more info SHARE ANALYSIS: ABC

By Rudi Filapek-Vandyck, Editor FNArena

Guide:

The FNArena database tabulates the views of eight major Australian and international stock brokers: Citi, Credit Suisse, Deutsche Bank, JP Morgan, Macquarie, Morgan Stanley, Morgans 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 August 17 to Friday August 21, 2015
Total Upgrades: 42
Total Downgrades: 12
Net Ratings Breakdown: Buy 43.63%; Hold 41.89%; Sell 14.48%

Polycephalys is the condition of having more than one head, so tells me Wikipedia. Given the multi-tiered nature of what is happening in the local share market right now, it seems but appropriate to open this week’s review with a reference to a bodily condition that sometimes affects deities and fairy tale persona, as well as the odd breathing creature, and the local share market throughout sudden turmoil.

Stockbroking analysts have been showering the market with recommendation upgrades while macro-concerns have continued to push share prices lower. Yes, it’s been a rather colourless and non-inspiring reporting season thus far, but falling share prices are providing all the inspiration those analysts need.

For the week ending Friday, 21st August 2015, FNArena registered no less than 42 upgrades and 12 downgrades. These numbers follow on from already above average numbers in preceding weeks. There’s now a consistent trend in favour of many more upgrades than downgrades.

A different picture altogether emerges when looking at changes made to valuations and price targets. Here the negative side of the ledger simply shows ongoing carnage. The bottom line conclusion to draw from this is that bad news is still very much present and it does hit on micro-level as well. And it’s not only the likes of Atlas Iron and Monadelphous copping heavy downgrades, with disappointers Origin Energy, Seek and FlexiGroup also prominently present.

On the positive side, large positive adjustments are occurring for Treasury Wine Estates, Webjet, Asciano and others.

Earnings estimates equally reveal heavy swings and roundabouts, with Seven West Media and Qantas leading the pack for positive revisions and a2 Milk and Whitehaven Coal on the negative side. Adjustments made are significant by any measure on both positive and negative side.

Upgrade

ARDENT LEISURE GROUP ((AAD)) Upgrade to Buy from Neutral by UBS .B/H/S: 1/4/0

FY15 results were broadly in line with UBS. The broker expects Main Event to make up over half of FY16 earnings and over 70% of group earnings by FY20.

The broker no longer expects a falling oil price to have a materially negative effect on Main Event over FY16-17.

Given increased confidence in the outlook UBS upgrades to Buy from Neutral, raising the target to $3.10 from $2.45.

ADELAIDE BRIGHTON LIMITED ((ABC)) Upgrade to Neutral from Underperform by Credit Suisse .B/H/S: 0/6/2

Looking forward to the release of interim results, Credit Suisse upgrades to Neutral from Underperform and raises the price target to $4.75 from $4.15. The analysts suggest the company is in the best shape it has been for a long while.

The broker has also made changes to earnings forecasts, lifting FY15 earnings by 17.7%, FY16 by 1.8% and FY17 by 2.7%. The analysts believe a special dividend or M&A should be back on management’s agenda.

AGL ENERGY LIMITED ((AGL)) Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 2/5/0

Morgan Stanley has upgraded AGL to Equal-Weight from Underweight and raised the price target to $17.38 from $15.88.

Morgan Stanley notes the company is pushing on with delivery of efficiency and divestment initiatives in FY16.

AMP LIMITED ((AMP)) Upgrade to Buy from Neutral by UBS .B/H/S: 4/4/0

UBS is setting aside its usual concerns regarding AMP and upgrading to Buy from Neutral. The first half result was in line with expectations and the absence of any material changes to the outlook endorse the rating.

Annual earnings growth of 5-6% is expected out to FY18. The company’s improved diversity and stability are expected to underpin this growth. The target is lifted to $7.00 from $6.70.

APN NEWS & MEDIA LIMITED ((APN)) Upgrade to Buy from Neutral by UBS and Upgrade to Buy from Hold by Deutsche Bank .B/H/S: 5/2/0

First half results were in line and UBS expects broadly flat revenue growth in the second half. Given the recent share price underperformance, the stock now trades at a discount to the valuation.

UBS upgrades to Buy from Neutral. Concerns linger regarding the structural declines for the print assets but radio now comprises the majority of the portfolio. Target is reduced to 75c from 90c.

First half results were broadly in line with Deutsche Bank’s expectations. The broker considers the reaction to the results is not justified and upgrades to Buy from Hold.

Despite a soft start to the second half the broker is encouraged by signs conditions have improved this month. Beyond FY15 Deutsche Bank expects radio to be the driver of earnings growth. Target is reduced to 80c from 84c.

ALUMINA LIMITED ((AWC)) Upgrade to Outperform from Neutral by Macquarie .B/H/S: 6/1/1

Alumina’s headline result missed Macquarie but cash generation and the interim dividend exceeded. A gas contract prepayment means the AWAC dividend falls short of Alumina’s dividend paid, which is thus to be funded through a 50% underwritten DRP.

This has come as a surprise, but as the broker notes another pre-payment to be made, a strong final dividend is also assumed. The stock now trades on a 7% yield, Macquarie notes, leading to a total shareholder return forecast of 35%. Upgrade to Outperform, target unchanged at $1.70.

BANK OF QUEENSLAND LIMITED ((BOQ)) Upgrade to Overweight from Equal-weight by Morgan Stanley .B/H/S: 2/4/2

Morgan Stanley believes the bank leads in dividend and earnings growth in FY16 estimates, given upside risk from home loan re-pricing.

The broker expects expanded mortgage distribution and home loan re-pricing to drive around 9.0% revenue growth in FY16. An absence of one-off costs and underlying expense growth around 3.0% should allow the bank to offset higher amortisation and limit growth in reported expenses to just 1.0% in FY16.

Rating is upgraded to Overweight from Equal-weight. Industry view is In-Line. Target is raised to $14.20 from $13.20.

CROWN RESORTS LIMITED ((CWN)) Upgrade to Buy from Neutral by Citi .B/H/S: 4/3/1

FY15 results were below Citi’s expectations because of higher corporate costs. Still, Crown Melbourne impressed with growth of 17.8% in earnings.

Citi upgrades to Buy from Neutral following an increase in valuation as a result of changes to methodology. Target is raised to $15.20 from $13.50.

FEDERATION CENTRES ((FDC)) Upgrade to Buy from Neutral by Citi .B/H/S: 2/2/3

Citi expects the FY15 result will provide more comfort in the company’s strategic focus, with the cost benefits of the merger already flowing through faster than expected.

Earnings estimates are upgraded by 1.0% for FY16 onwards.

The broker envisages the shares as increasingly good value and would use weakness as a buying opportunity. Hence, rating is upgraded to Buy from Neutral.

Target is raised to $3.05 from $2.97.

FORTESCUE METALS GROUP LTD ((FMG)) Upgrade to Outperform from Neutral by Macquarie .B/H/S: 2/3/3

Macquarie suggests material reductions in operating costs have significantly improved the earnings outlook for Fortescue. Tailwinds from the A$ could see costs fall further, such that the company’s iron ore breakeven price could fall to US$37/t.

Fortescue is generating sufficient cash flow to service near term debt, but if iron ore prices remain lower for longer, latter obligations could be supplemented by minority sales in the company’s mines, the broker suggests.

Upgrade to Outperform. Target rises to $2.50 from $2.20.

FLEXIGROUP LIMITED ((FXL)) Upgrade to Neutral from Sell by UBS and Upgrade to Buy from Neutral by Citi .B/H/S: 3/3/0

Flexigroup’s FY15 results were in line with UBS’s expectations, and at the low end of the company’s own guidance.

FY16 guidance was weak, implying growth of just 3%, less when the contribution from the recently acquired telecom business in NZ is discounted. The broker notes this is the lowest growth forecast since 2009.

Rating is upgraded to Neutral from Sell and the price target drops to $2.70 from $2.89.

Citi is upgrading to Buy from Neutral following the 16% fall in the share price over the past week. Guidance for FY16 profit of $92-94m suggests limited, if any, organic growth.

While reiterating concerns about the outlook, Citi believes these are now reflected in the share price. Target is reduced to $3.32 from $3.36.

GWA GROUP LIMITED ((GWA)) Upgrade to Outperform from Underperform by Credit Suisse .B/H/S: 2/4/0

Credit Suisse has upgraded GWA to Outperform from Underperform and lowered its price target to $2.40 from $2.60.

The company’s FY15 results were as expected by the broker.

Following the sale of Dux, Brivis and Gliderol, Credit Suisse notes restructuring and the unwinding of provisions will impact cash flow in FY16 and FY17. FX rates could also be a factor.

ILUKA RESOURCES LIMITED ((ILU)) Upgrade to Neutral from Underperform by Credit Suisse .B/H/S: 5/2/1

Credit Suisse has upgraded Iluka to Neutral from Underperform and maintains the price target at $7.50.

The company’s first half results were below the broker’s expectations, mainly due to the broker’s lower depreciation forecast. There was no change to full year guidance.

The broker has forecast a 1% increase in FY16 and FY17 earnings and expects increased dividend payments in CY16. 

MINERAL RESOURCES LIMITED ((MIN)) Upgrade to Buy from Hold by Deutsche Bank .B/H/S: 2/2/0

FY15 results were in line with Deutsche Bank’s estimates. The balance sheet remains strong and the mining assets are generating strong positive cash flow.

Iron ore earnings were above forecasts, due to the impressive reduction in costs. Deutsche Bank upgrades to Buy from Hold and retains a $7.00 target.

MONADELPHOUS GROUP LIMITED ((MND)) Upgrade to Hold from Reduce by Morgans .B/H/S: 0/3/4

Morgans has upgraded the stock to Hold from Reduce and lowered the price target to $7.30 from $10.35.

The company’s FY15 results were below the broker’s expectations.

The weak result was due to market deterioration and management expects these conditions to continue on the back of low commodity prices. Morgans has reduced its FY16 earnings forecast by 5%, but expects the dividend payout to increase by 4%.

ORIGIN ENERGY LIMITED ((ORG)) Upgrade to Neutral from Underperform by Credit Suisse .B/H/S: 5/3/0

Credit Suisse has upgraded the stock to Neutral from Underperform and lowered the price target to $9.00 from $10.00.

Origin Energy’s FY15 results were well ahead of the broker’s forecasts. Guidance was again confusing to the broker as it provides neither capex nor production figures.

Reductions to the broker’s energy market forecasts lead to overall reductions in FY16 and FY17 earnings of 15.5% and 2.3% respectively.

PACIFIC BRANDS LIMITED ((PBG)) Upgrade to Buy from Neutral by Citi .B/H/S: 1/3/2

Citi upgrades Pacific Brands to Buy from Neutral and expects both the store and online expansion will lead to better sales growth and stable earnings.

Earnings estimates for FY16 are revised up by 3.0%. The broker retains a target of 50c.

QUBE LOGISTICS ((QUB)) Upgrade to Hold from Sell by Deutsche Bank .B/H/S: 5/3/0

FY15 results were marginally below Deutsche Bank’s forecasts, mainly on the performance of logistics.

The broker is particularly pleased with the company’s focus on enhancing its strategic growth profile including the recently announced joint venture with Tonen General.

Still, execution risk remains high. Deutsche Bank upgrades to Hold from Sell. Target is steady at $2.25.

SAI GLOBAL LIMITED ((SAI)) Upgrade to Outperform from Neutral by Macquarie .B/H/S: 2/5/0

SAI’s result beat Macquarie and guidance. Margins made the difference given revenue came in short, which comes down to strong operational efficiency, the broker suggests. The organic growth outlook is disappointing but the restructure should provide benefits through FY16.

SAI trades at a PE in line with the small industrials average but given earnings growth potential, Macquarie sees this as attractive. Rating upgraded to Outperform and target increased to $4.80 from $4.05.

SHOPPING CENTRES AUSTRALASIA PROPERTY GROUP ((SCP)) Upgrade to Neutral from Sell by Citi .B/H/S: 0/2/3

Citi has upgraded the stock to Neutral from Sell and raised the price target to $1.92 from $1.91.

There were no surprises for the broker in SCA’s FY15 results as they had been pre-announced with the June equity raising.

FY16 guidance is well below the broker’s estimate, although this does not reflect the impact of the new SCA Unlisted retail Fund.

SEEK LIMITED ((SEK)) Upgrade to Neutral from Sell by UBS .B/H/S: 4/4/0

FY15 results were in line with expectations but UBS finds the FY16 outlook a little disappointing. The company expects FY16 earnings to grow 5-8%.

UBS considers the stock valuation undemanding against the potential growth profile, aware that management is investing for the long term.

Rating is upgraded to Neutral from Sell. Target is reduced to $13.10 from $13.40.

SIMS METAL MANAGEMENT LIMITED ((SGM)) Upgrade to Neutral from Underperform by Credit Suisse .B/H/S: 5/1/2

Credit Suisse expects the company’s FY15 earnings to meet forecasts but lowers its FY16 forecast to reflect lower steel prices and a weakening export market.

The broker has upgraded the stock to Neutral from Underperform and lowered the target price to $9.50 from $10.85.

STOCKLAND ((SGP)) Upgrade to Outperform from Neutral by Credit Suisse .B/H/S: 3/2/2

Credit Suisse has upgraded Stockland to Outperform from Neutral, target price remains at $4.64.

The company’s FY15 results were in line with the broker’s expectations.

FY16 guidance was again conservative in the broker’s opinion. CS forecasts 7.6% growth, driven by margin expansion and retail development completions.

SONIC HEALTHCARE LIMITED ((SHL)) Upgrade to Buy from Neutral by Citi and Upgrade to Neutral from Underperform by Credit Suisse .B/H/S: 5/3/0

Citi analysts note FY15 results were in line with expectations and recent guidance for FY16 was reaffirmed.

Citi considers the stock attractive relative to its growth profile and upgrades to Buy from Neutral, given the recent pull back in the shares and renewed enthusiasm for acquisitions.

The broker rolls forward valuation and upgrades the target to $22.01 from $21.34.

Credit Suisse upgrades to Neutral from Underperform and lowers the price target to $20.50 from $21.25

FY15 results were broadly in line with the broker’s forecast. Favourable FX and a full year contribution from Medisupport should result in improved earnings in FY16. Robust German revenue is also expected to contribute to the broker’s forecast of 21% revenue growth.

Credit Suisse expects only modest Australian earnings growth due to the continued deployment of approved collection centres.

SMS MANAGEMENT & TECHNOLOGY LIMITED ((SMX)) Upgrade to Add from Hold by Morgans and Upgrade to Buy from Neutral by UBS .B/H/S: 3/1/0

FY15 earnings growth of 36% impressed Morgans and was ahead of forecasts. The result was helped by cycling a weak FY14 and acquisitions.

The results provide confidence the worst is behind the company and growth has returned after a couple of tough years.

Morgans upgrades to Add from Hold and raises the target to $4.75 from $4.19. FY16 forecasts are upgraded by 18%.

FY15 results were a solid beat and UBS found very little that was negative, although perhaps one thing missing was an expected uplift in second half consulting utilisation.

The company heads into FY16 with 25-30% of revenue secured compared with its historical position of around 10-15%.

With a new analyst in place, the broker upgrades to Buy from Neutral. Target is raised to $4.70 from $3.80.

TRADE ME GROUP LIMITED ((TME)) Upgrade to Buy from Hold by Deutsche Bank and Upgrade to Neutral from Sell by Citi and Upgrade to Outperform from Neutral by Macquarie and Upgrade to Neutral from Sell by UBS .B/H/S: 4/2/1

FY15 results were in line with Deutsche Bank’s forecasts. The FY16 guidance is for a flat operating performance and a stronger second half.

The broker remains comfortable that guidance suggests slower growth in expenses, which should pave the way for a return to modest earnings growth.

Rating is upgraded to Buy from Hold, given the fall in the share price. Target is steady at NZ$3.55.

FY15 results were ahead of Citi’s forecasts. Motor and employment classifieds remain the revenue drivers. Citi lifts FY16 forecasts by 1.0%.

Rating is upgraded to Neutral from Sell, with the shares seen trading at fair value. Target is reduced to $2.95 from $2.96.

Stronger revenue growth and slower expense growth meant Trade Me’s result beat Macquarie. Classifieds now make up 50% of revenues and other businesses were surprisingly strong, the broker notes. It appears to the broker the risk of further earnings downgrades has now been reduced.

On that basis, Trade Me looks cheap, the broker admits, trading at a discount to discounted cash flow, the market PE and its own historical PE. With momentum appearing to build Macquarie upgrades to Outperform. Target rises to NZ$4.00 from NZ$3.75.

FY15 earnings were broadly in line with UBS estimates. The broker observes signs of stabilisation in the listings business. Guidance is for similar growth in FY16.

UBS lifts its rating to Neutral from Sell, noting the stock has underperformed the NZX over the past year and the signs of improvement are encouraging. Target is raised to NZ$3.40 from NZ$3.35.

THE REJECT SHOP LIMITED ((TRS)) Upgrade to Neutral from Sell by UBS and Upgrade to Outperform from Neutral by Macquarie .B/H/S: 1/2/1

FY15 results were better than UBS expected, despite being weak. Operating cash flow was also stronger than expected.

While significant risks remain on the horizon the broker does find some positive signs. The company will manage currency impacts through price increases and changes in mix.

Rating is upgraded to Neutral from Sell. Price target is raised to $7.80 from $5.80.

Reject’s result beat Macquarie and the dividend was better than expected. It was a much better second half, the broker notes, featuring improving sales momentum, which indicates new initiatives are working.

This is encouraging, given Macquarie believes Reject is yet to leverage its significant investment in stores and logistics and is still under-earning, suggesting further substantial improvements could be realised. Forecast FY16 earnings rise 12% and target rises to $8.40 from $7.00.

On the turnaround opportunity, albeit high risk, Macquarie upgrades to Outperform.

TATTS GROUP LIMITED ((TTS)) Upgrade to Neutral from Underperform by Credit Suisse .B/H/S: 3/4/1

Credit Suisse has upgraded the stock to Neutral from Underperform and cut the price target to $3.40 from $3.55.

The company’s FY15 results were slightly below the broker’s forecasts. FY16 earnings forecast has been cut by 1% and FY17 by 2%. Tatts new game, Set for Life, shows promising signs and should help lottery revenue growth in FY16.

See also TTS downgrade.

TREASURY WINE ESTATES LIMITED ((TWE)) Upgrade to Hold from Sell by Deutsche Bank and Upgrade to Neutral from Sell by Citi and Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 0/5/3

The FY15 result was solid and earnings ahead of Deutsche Bank’s expectations. The company is less reliant on Penfolds, with a reinvigorated marketing campaign across the portfolio.

Deutsche Bank lifts earnings estimates by 5.0% for FY16 and 10% for FY17. While the stock is not cheap and cash conversion remains weak the trading momentum and potential capital management should limit the downside.

Rating is upgraded to Hold from Sell. Target is raised to $5.75 from $4.00.

FY15 earnings were stronger than expected. Citi lifts forecasts by 16% for FY16 and by 20% for FY17.

The broker upgrades to Neutral from Sell, with a more positive stance reflecting confidence the company’s strategy is working, while prospects for growth in Asia are good. Target rises to $6.20 from $4.90.

Morgan Stanley has upgraded the stock to Equal-Weight from Underweight and raised the price target to $6.00 from 4.80. Industry view is In-Line.

The company’s FY15 results were ahead of the broker’s forecasts, mainly due to positive exchange movements and new distribution agreements in China. The Asian market is expected to continue growing and the broker has lifted FY16 and FY17 earnings estimates by 22% to reflect this.

WESFARMERS LIMITED ((WES)) Upgrade to Outperform from Neutral by Macquarie .B/H/S: 2/5/1

Wesfarmers’ result was a slight beat on Macquarie. The company’s retail businesses are clearly outperforming their peers despite a challenging retail environment, the broker notes, as is confirmed by their various REIT landlords.

Strong cash generation provides balance sheet strength to cycle capital back into high return opportunities.

Wesfarmers has been Macquarie’s preference over rival Woolworths ((WOW)) but a revived Woolies under a new CEO represents a threat. However, given Woolies is unlikely to see a turnaround within twelve months, the broker upgrades to Outperform.

Target rises to $44.84 from $43.34.

WHITEHAVEN COAL LIMITED ((WHC)) Upgrade to Add from Hold by Morgans .B/H/S: 6/2/0

Whitehaven’s FY15 results were ahead of Morgan’s forecast. 

Morgans believes the company will return to profit in FY16, with surplus cash flow being diverted to debt reduction.

The broker has upgraded the stock to Add from Hold and raised the price target to $1.36 from $1.30.

WOODSIDE PETROLEUM LIMITED ((WPL)) Upgrade to Hold from Reduce by Morgans .B/H/S: 2/3/3

Morgans upgrades to Hold from Reduce. The first half earnings and dividend declined, as expected, because of lower oil prices and production.

Despite the diminished returns the share price fall has reduced the downside potential to forecast returns. Morgans considers the business well run, but short on yield and growth appeal and a lack of near-term catalysts.

The broker raises the target to $29.89 from $29.64.

Downgrade

AUTOMOTIVE HOLDINGS GROUP LIMITED ((AHG)) Downgrade to Neutral from Buy by UBS .B/H/S: 3/4/0

UBS suspects it could be difficult for the company to grow earnings organically in FY16. FY15 earnings were stronger than the broker expected.

While recognising the stock seems cheap on a peer multiple basis, UBS considers it fully valued. Rating is downgraded to Neutral from Buy. Target is lowered to $4.32 from $4.65.

ASCIANO GROUP ((AIO)) Downgrade to Neutral from Overweight by JP Morgan and Downgrade to Hold from Buy by Deutsche Bank .B/H/S: 2/5/0

JP Morgan has pulled back the rating -to Neutral from Overweight- following the board’s decision to endorse the Brookfield bid for full ownership of the company.

As far as the financial results are concerned, top line growth disappointed but cost savings saved the day, in the analysts’ view.

Target lifts to $9.15 (in line with the implied bid price). With the bidding process unfolding, limited downside seen to the share price. Estimates have been lowered.

FY15 results were above Deutsche Bank’s expectations. The story, however, is centred on the board endorsement of the revised bid from Brookfield to acquire the stock for $9.15 a share.

Post acquisition, Brookfield Infrastructure intends to list on ASX. Deutsche Bank downgrades to Hold from Buy and revises the target to $9.15 from $9.05.

ASX LIMITED ((ASX)) Downgrade to Underperform from Neutral by Credit Suisse .B/H/S: 0/4/4

Credit Suisse has downgraded ASX to Underperform from Neutral and reduced the target price to $42 from $43.

FY15 results were in line with the broker’s forecasts. ASX has guided to increased costs as it introduces new initiatives, leading the broker to reduce FY16 and FY17 forecasts by 2%. Despite the result, Credit Suisse views the stock as overvalued.

COCA-COLA AMATIL LIMITED ((CCL)) Downgrade to Underweight from Overweight by JP Morgan .B/H/S: 3/3/2

JP Morgan has downgraded to Underweight from Overweight following a detailed review of the Australian beverages operations, the core of the business. Target price has been reduced to $8.00 from $11.17.

As shown by the significant reduction in target, the analysts see many challenges impacting and little, if any, valuation support for the stock. Too much fizzy drinks and too many health concerns probably sums it up best.

Normalised EPS forecasts have been lowered by 3.7%, 9.6% and 16.5% in FY15, FY16 and FY17. These revised forecasts now imply the company is ex-growth, also losing the ability to lift DPS.

CARDNO LIMITED ((CDD)) Downgrade to Hold from Add by Morgans .B/H/S: 1/4/1

FY15 earnings were weaker than Morgans envisaged. The broker believes, given the backlog of orders, that a reasonably flat top line might be delivered in FY16 but earnings will only be flat if cost cutting continues.

Further commentary on utilisation rates and margins may be a catalyst at the AGM.

With a change in analyst, rating is downgraded to Hold from Add as forecasts fall by 20% and 21% for FY16 and FY17 respectively. Target is reduced to $2.27 from $3.16.

ENERGY DEVELOPMENTS LIMITED ((ENE)) Downgrade to Neutral from Buy by UBS .B/H/S: 2/4/0

FY15 results were ahead of the broker’s forecasts, with the company generating a 9% increase in cash flow from the previous corresponding period.

UBS has downgraded the stock to Neutral from Buy and raised the price target to $8.00 from $7.54.

JAMES HARDIE INDUSTRIES N.V. ((JHX)) Downgrade to Sell from Neutral by UBS .B/H/S: 3/3/1

UBS believes the market is overpaying for the company’s attributes and consensus sales growth forecasts are too high. UBS emphasises that good cost performance can only go so far.

The broker revises assumptions and believes volume growth is the most important indicator. Rating is downgraded to Sell from Neutral. The target is raised to $17.30 from $16.13.

OIL SEARCH LIMITED ((OSH)) Downgrade to Sell from Neutral by Citi .B/H/S: 6/1/1

Citi now expects oil price weakness to continue into 2016. Citi downgrades Brent forecasts for 2016 by 16% and 2017 by 17%. The long-term price is downgraded to US$70/barrel, which is partly offset by a lower assumption for the Australian dollar at US73c.

Hence, with the risk of a weak oil price the broker downgrades Oil Search to Sell form Neutral. Target is lowered to $6.01 from $6.83.

QBE INSURANCE GROUP LIMITED ((QBE)) Downgrade to Neutral from Buy by UBS .B/H/S: 5/3/0

UBS found the first half result had a lot to like although margins were lower than expected as was cash profit. On the positive side, reserves are stable and there is surplus core equity and an increasing pay-out ratio.

UBS reduces forecasts for 2015 and 2016 by 4% and 7% respectively. The build up to 2016 is suggesting to the broker that a lot needs to go well for a high 10% margin to be achieved. Rating is downgraded to Neutral from Buy. Target is reduced to $14.50 from $15.00.

SG FLEET GROUP LIMITED ((SGF)) Downgrade to Equal-weight from Overweight by Morgan Stanley .B/H/S: 1/1/0

The FY15 result was 3.3% ahead of prospectus estimates. Morgan Stanley believes it demonstrates the quality of the business. Management aims to maintain the underlying profit growth in FY16 of around 9.0%.

Morgan Stanley downgrades to Equal-weight from Overweight on valuation and considers the strong outlook reflected in the share price. Target is raised to $2.75 from $2.25. Industry view is In-Line.

TATTS GROUP LIMITED ((TTS)) Downgrade to Neutral from Buy by UBS .B/H/S: 3/4/1

FY15 results were below UBS forecasts, with wagering significantly weaker and disappointing.

UBS downgrades to Neutral from Buy, believing the risks are now heightened in wagering. Target is reduced to $3.70 from $4.10.

See also TTS upgrade.

Total Recommendations	Recommendation Changes
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