Daily FNArena News - Australia

Market volatility and increased competitor activity have once again driven Sims Metal to downgrade expectations. Most brokers, while disappointed, still favour the longer-term outlook.

Broker views centre on how Rio Tinto will carve up the cash pie stemming from asset divestments, as revenue continues to benefit from strong commodity prices.

Gold has found a solid footing, as several features in the global environment combine, and this underpins a strong revenue outlook for gold stocks.

Negative markets and outflows caused Perpetual to report a decline in funds under management in the December quarter and brokers expect the share price will remain under pressure in the near term.

Wealth manager Magellan Financial’s fund flows stood out in the December quarter and a better outlook has prompted several brokers to review their ratings.

A sharp drop off in demand for some of its produce over December and into January caused Costa Group to flag a flat net profit outcome for 2018. Brokers believe the market reaction was overdone.

Discretionary retailing encountered difficult Christmas trading in 2018 and brokers suspect a depressed consumer environment bodes poorly for the upcoming reporting season.

Treasury Wine Estates has flagged strong earnings growth for 2019, although several brokers remain concerned about the softer US wine business signalled by competitor, Constellation Brands.

NZ-based manufacturer Methven is expected to extend GWA Group’s range of bathroom & kitchen products and diversify its geographic exposure.

A merger of Australian Pharmaceutical Industries and Sigma Healthcare is logical but ACCC issues are uppermost in broker views.