Daily FNArena News - Australia

Brokers spent a good chunk of time last week wrapping the reporting season, gauging the global macro recovery and plotting the impacts of the AUD.

Myer’s interim profit result fell short and brokers remain wary given tough operating conditions and expectations of further cost pressures.

Strong balance sheets and locked in revenues should ensure further solid results for Australian REITs, with brokers updating their preferred exposures for the sector.

The recently completed Australian earnings season proved a disappointment, and with currency and cost inflation pressures there remains downgrade risk out to FY13.

Last month’s interim saw increases to earnings forecasts and price targets for Breville and now Goldman Sachs has also turned more positive, upgrading to a Buy rating.

FNArena highlighted the positive Karoon Gas story last week and now Deutsche Bank has added to coverage, initiating on the stock with a Buy rating.

New data from the Commonwealth Bank show small exporters are not keen on borrowing in the current AUD environment.

National Australia Bank’s Monthly Business Survey for February showed an improvement in conditions but a fall in confidence, leading to minor changes to growth expectations.

Alesco has sold its most challenged division and while brokers are positive on the transaction they remain cautious on the outlook for the company.

While strong results over the past six months has seen a re-rating of mining services companies, equity brokers remain attracted to the strong earnings growth on offer in the sector.