Weekly Recommendation, Target Price, Earnings Forecast Changes

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            [5] => ((OSH))
            [6] => ((WPL))
            [7] => ((REG))
            [8] => ((SBM))
            [9] => ((SDA))
            [10] => ((VCX))
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This story features DEXUS, and other companies.
For more info SHARE ANALYSIS: DXS
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

By Greg Peel, Acting 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 December 7 to Friday December 11, 2015
Total Upgrades: 9
Total Downgrades: 5
Net Ratings Breakdown: Buy 44.20%; Hold 43.37%; Sell 12.43%

There remains a handful of corporate AGMs to be held before Christmas, with the banks in particular in the frame this week, but the bulk of the AGM season is now well and truly behind us. The quantity of broker research is thus now diminishing, as it always does in December. FNArena registered nine ratings upgrades and five downgrades among database brokers in the week ending December 11, with no particular macro theme dominating.

Investa Office scored two upgrades to Hold following a takeover offer from Dexus Property. There has been a lot of angst in the electronics retailer space given fears of major Dick Smith discounting, but analyst concerns have been easing somewhat over the impact on JB Hi-Fi. Recent share price weakness in aged care names due to regulatory concerns has led to one upgrade in the space on a longer term value basis, while the withdrawal of Woodside Petroleum's bid for Oil Search sees Citi upgrade both stocks back to Hold.

On the downgrade side of the ledger, a bid for Broadspecturm, the old Transfield, sparked some buying in that stock but given brokers do not expect the bid to succeed, downgrades have followed. Broadspectrum nevertheless copped a decent downgrade to consensus target price, pipped only by Spotless Group in terms of quantum. Upgrades to target prices were negligible last week.

Spotless also featured among those stocks seeing relatively sizeable earnings forecast downgrades, while the winner in that category was beleaguered service provider Cardno. On the earnings upgrade side, APN Outdoor did rather well but the stand-out was a 44% upgrade for Baby Bunting.

Upgrade

INVESTA OFFICE FUND ((IOF)) Upgrade to Neutral from Underperform by Credit Suisse and Upgrade to Neutral from Underweight by JP Morgan .B/H/S: 0/4/0

Credit Suisse expects the price of Investa Office to be underpinned by the bid from Dexus Property ((DXS)). Dexus has offered to acquire the units for an effective price of $4.10 each, in an 80% scrip 20% cash deal.

The broker considers the bid a good outcome for Investa investors. A competing bid may still emerge, the broker believes, although the company has indicated potential acquirers were approached before a deal was struck with Dexus.

Credit Suisse upgrades to Neutral from Underperform. Target price is raised to $4.17 from $3.75.

Dexus Property ((DXS)) has made an offer for Investa Office, comprising 0.424 securities and 82.29c cash. Dexus has a limited ability to pay more, JP Morgan contends. At the current indicative bid price the earnings impact is considered to be 1-2% accretive over a five year period.

JP Morgan suspects the deal is around 5.0% light but, in the absence of a counter bid, believes it will probably be recommended by the independent expert. With few impediments to the transaction likely, the broker upgrades to Neutral from Underweight and raises the target to $4.10 from $3.58.

JB HI-FI LIMITED ((JBH)) Upgrade to Buy from Neutral by UBS .B/H/S: 1/6/1

UBS believes JB Hi-Fi is more exposed to the Dick Smith ((DSH)) step up in promotional activity but the impact should be muted, given a large portion of discounted and impaired stock from the latter is lower quality than a unique private label product.

An irrational competitor creates a sales risk to earnings, the broker acknowledges but the issues at Dick Smith highlight the strength of JB Hi-Fi's brands.

The broker upgrades to Buy from Neutral. Target is steady at $21.50.

OIL SEARCH LIMITED ((OSH)) Upgrade to Neutral from Sell by Citi .B/H/S: 3/5/0

Woodside Petroleum ((WPL)) has aborted its attempt to add Oil Search's PNG assets to its portfolio and Citi analysts have responded by upgrading their rating to Neutral from Sell with an unchanged price target of $7.13.

REGIS HEALTHCARE LIMITED ((REG)) Upgrade to Add from Hold by Morgans .B/H/S: 1/3/0

Morgans upgrades to Add from Hold as share price weakness has created a buying opportunity and the broker retains a positive outlook on the aged care sector.

Morgans believes any changes to aged care funding will around the edges and be via mechanisms such as means testing, to help reduce the increased expenditure. Target is steady at $6.00.

ST BARBARA LIMITED ((SBM)) Upgrade to Buy from Hold by Deutsche Bank .B/H/S: 2/0/0

The company's story is now more simple, in Deutsche Bank's view. Cash flow from Gwalia at spot and FX is more than sufficient to repay debt by the end of FY18.

This provides investors with free options including ongoing cash flow at Simberi, the remaining mine life at Gwalia and upside potential from Gwalia Deeps.

The broker assumes a steady state at Simberi over the next four years and suspects Gwalia could deliver material upside. Rating is upgraded to Buy from Hold. Target is raised to $1.50 from $1.20.

SPEEDCAST INTERNATIONAL LIMITED ((SDA)) Upgrade to Buy from Neutral by UBS .B/H/S: 1/2/0

UBS believes the share price has underperformed as the company is now more highly geared after several acquisitions and intends to still make 2-3 acquisitions per annum going forward, so investors are worried about a capital raising.

A weak oil price and subdued commentary from peer RigNet also implies a weaker performance for the energy division, the broker observes.

UBS believes the stock is at an attractive entry point and upgrades to Buy from Neutral. Target is steady at $4.60.

VICINITY CENTRES ((VCX)) Upgrade to Overweight from Neutral by JP Morgan .B/H/S: 3/2/1

JP Morgan believes the net tangible asset backing is understated by 10-15%, leaving the stock too cheap versus its closest comparable peers.

The broker considers the stock attractive, with high quality assets and upgrades to Overweight from Neutral. Target is raised to $2.90 from $2.83.

WOODSIDE PETROLEUM LIMITED ((WPL)) Upgrade to Buy from Neutral by Citi .B/H/S: 1/6/1

Woodside Petroleum has aborted its attempt to add Oil Search's ((OSH)) PNG assets to its portfolio and Citi analysts have responded by upgrading their rating to Buy from Neutral with an unchanged price target of $32.13.

Downgrade

BROADSPECTRUM LIMITED ((BRS)) Downgrade to Neutral from Outperform by Credit Suisse and Downgrade to Neutral from Buy by Citi .B/H/S: 0/4/1

Ferrovial has made a $1.35 bid for the company, a 59% premium to the prior close, conditional on 50.1% minimum acceptance and FIRB approval.

Credit Suisse believes the offer opportunistic and, with the company having rejected a $2.00 a share bid a year ago, board support is considered unlikely. The broker also believes the chance of a competing bid is likely to be constrained by listed peers facing a number of their own issues, and the complexity of the company's immigration contract.

The broker downgrades to Neutral from Outperform and reduces the target to $1.35 from $1.40.

Ferrovial has made a third offer for Broadspectrum, at $1.35ps. The only conditions are 50.1% acceptance and FIRB approval, Citi notes. Given a $2.00 bid was rejected only 12 months ago, the broker can't see how the board could accept the offer.

The fact 40% of Broadspecturm is held by only four shareholders makes the 50% threshold problematic. Citi retains a $1.25 target but cuts its rating to Neutral given yesterday's share price jump.

ESTIA HEALTH LIMITED ((EHE)) Downgrade to Equal-weight from Overweight by Morgan Stanley .B/H/S: 1/3/0

The acquisition of Kennedy Health Care is both earnings accretive – at 10% in FY17 – and provides a foothold in NSW, Morgan Stanley maintains.

Nevertheless, concerns about a reliance on acquisitions and debt leads the broker to consider the stock is now fully valued.

Rating is downgraded to Equal-weight from Overweight. In-Line sector view retained. Target is raised to $7.15 from $7.00.

PREMIER INVESTMENTS LIMITED ((PMV)) Downgrade to Underperform from Neutral by Credit Suisse .B/H/S: 2/3/1

The share price has appreciated and Credit Suisse downgrades  to Underperform from a Neutral rating. The current price incorporates all foreseeable upside in earnings from expansion initiatives, in the broker's view.

The market has been promotional in the lead up to Christmas and the company's foreign currency hedging is considered less favourable, resulting in a need to pass through costs. Target is raised to $13.07 from $12.76.

PLATINUM ASSET MANAGEMENT LIMITED ((PTM)) Downgrade to Underperform from Neutral by Credit Suisse .B/H/S: 1/1/1

The share price is up 20% in the quarter to date and Credit Suisse expects inflows to slow from this point with the trust funds unlikely to benefit from reinvestment of distributions as was the case in the September quarter.

Hence, the broker downgrades to Underperform from Neutral. Target is raised to $7.50 from $7.00.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup

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