By Chris Shaw

As more companies use annual general meetings to confess on earnings guidance for FY13, changes to broker ratings have become weighted to the downside, with the past week seeing nine stocks upgraded compared to 27 downgrades. Total Buy recommendations in the FNArena database now stand at 42.77%.

Both Dexus Property ((DXS)) and IOOF Holdings ((IFL)) received two upgrades during the week. For Dexus, news the company intends to sell its remaining US assets to reinvest in the Australian market prompted Macquarie to move to a Neutral rating from Sell and JP Morgan to go one better and lift its rating to Buy from Neutral. In both cases the asset sale is seen as a likely positive catalyst for the stock.

Both Citi and Credit Suisse upgraded IOOF to Buy from Hold following the incorporation of the recent Plan B acquisition into earnings models, which resulted in increases to earnings estimates and price target. Credit Suisse also sees value given the stock is trading below historic average multiples.

Credit Suisse has also moved to a Buy rating from Hold on Goodman Fielder ((GFF)), this on the back of increases to earnings estimates given signs of improvement in the company's bread operations. The changes to forecasts resulted in an increase in price target.

With Archer Daniels Midland confirming an indicative proposal to acquire Graincorp ((GNC)), UBS has upgraded to a Buy rating from Hold previously to reflect the fact the stock is now in play. Given a potential list of suitors for Graincorp the broker has lifted its price target above the proposed offer price.

While Ten Network ((TEN)) delivered a disappointing full year result Deutsche Bank has upgraded to a Hold rating from Sell. While the long-term value in Ten's broadcasting licences is unlikely to be realised for some time, Deutsche takes the view the sale of the Eye Corp assets means a capital raising is now unlikely to be needed.

RBS Australia has upgraded WorleyParsons ((WOR)) to Buy from Hold post an investor day, largely on valuation grounds as both sector and peer multiples have improved in recent weeks. Changes to forecasts post the investor day saw some adjustments to price targets across the market.

JP Morgan was in a minority in upgrading OZ Minerals ((OZL)) to Hold from Sell post the company's quarterly production report. The lift in rating reflects the broker's view value is now less likely to be destroyed via merger and acquisition activity, while there is also seen to be a lack of negative catalysts for the share price at present.

Others didn't agree, as Citi, BA Merrill Lynch and Deutsche Bank all downgraded OZ Minerals during the week, the former to Hold from Buy and the others to Sell from Hold. Citi's downgrade reflects a lack of upside near-term given the stock is near valuation, while BA-ML takes the view rising costs will at some point have a more significant impact on earnings. Deutsche's downgrade is largely a valuation call.

A number of other stocks also received multiple downgrades, one being Mirvac Group ((MGR)). Both JP Morgan and Credit Suisse moved to Hold ratings from Buy following the group's quarterly update, both highlighting valuation as the reason for the rating change given recent gains in the share price.

National Australia Bank ((NAB)) saw both Macquarie and BA-ML downgrade, the former to Hold from Buy and the latter to Sell from Hold. Macquarie sees scope for the bank to have to deal with additional impairment charges in coming months given ongoing soft economic conditions, while BA-ML remains cautious on the outlook for the bank's UK assets as well.

Macquarie extended the weaker outlook to Westpac ((WBC)) as well, trimming earnings estimates and downgrading its rating to Underperform from Neutral.

Lower margin and revenue assumptions have seen estimates for Programmed Maintenance Services ((PRG)) lowered by Macquarie, while Credit Suisse has also adjusted down its forecasts and price target for the stock. In both cases the brokers have downgraded ratings to Neutral from Buy given an increasing risk profile.

SMS Management and Technology ((SMX)) delivered weaker AGM commentary than the market had expected and the resulting cuts to earnings estimates were enough for both Macquarie and UBS to downgrade to Hold ratings from Buy previously. Forecasts and price targets were lowered across the market.

It was a similar story for Treasury Wine Estates ((TWE)), where lowered guidance for the full year was enough for both Deutsche and UBS to downgrade to Sell ratings from Neutral recommendations previously.

On the resource side of the market BA-ML downgraded Alacer Gold ((AQG)) to Sell from Hold to reflect risk of further production disappointments following a weaker than expected quarterly production report.

Credit Suisse also downgraded Gindalbie ((GBG)) to Neutral from Sell following the incorporation of an equity raising for the Karara project into its model for the company. In the broker's view any such raising is unlikely to be well received by the market.

Citi has cut its rating on Oil Search ((OSH)) to Neutral from Buy following the company's quarterly, largely on a valuation basis as results for the period were broadly in line with expectations. Higher than expected costs saw UBS lower earnings estimates for Panoramic Resources ((PAN)) and when the potential need for additional funding is factored in the broker has moved to a Hold rating from Buy previously.

A weak September quarter production report from St Barbara ((SBM)) has left the market wanting more in the view of Deutsche, to the extent the broker has moved to a Neutral rating from Buy previously.

Among the industrials, BA-ML downgraded Ansell ((ANN)) to Sell from Hold on valuation grounds and RBS Australia has downgraded Australian Pharmaceutical Industries ((API)) to Hold from Buy on the same basis following the group's full year profit result. The result prompted changes to earnings estimates and price targets across the market.

RBS also downgraded both Biota ((BTA)) and Bradken ((BKN)) to Hold from Buy, the former as part of ceasing coverage on the stock given its imminent de-listing in Australia and the latter to reflect a full valuation given the expectation of a further softening in the group's markets.

Fletcher Building ((FBU)) saw a rating cut to Hold from Buy by Credit Suisse following solid share price gains, the broker noting the recent run in the stock has come before evidence the cycle has actually turned for building materials companies.

Credit Suisse also downgraded Goodman Group ((GMG)) to Sell from Hold on valuation grounds following a review of the REIT sector, while Deutsche downgraded Charter Hall Retail ((CQR)) on the same basis given the view the market is looking through Poland execution risk, where assets need to be sold to fund the group's development pipeline.

Lower earnings forecasts for SAI Global ((SAI)) given ongoing macro headwinds have been factored into JP Morgan's model, the result being the broker has downgraded to Neutral from Outperform to reflect additional pressure on the company to meet full year earnings expectations.

In terms of target price changes over the week only Australian Pharmaceutical enjoyed an increase of more than 10%, while Panoramic, SMS Management, Ten Network, Senex Energy ((SXY)) and Bradken saw targets reduced by 10% or more.

The cut in target for Senex came despite earnings forecasts being increased by more than 10%, the only stock in this category for the week. Cuts to earnings forecasts were most significant for Panoramic, Ten, Atlas Iron ((AGO)), BC Iron ((BCI)), Mount Gibson ((MGX)), Yancoal ((YAL)), Western Areas ((WSA)), GWA Group ((GWA)) and SMS Management. 

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup Suisse,Deutsche<*br*>Bank,JP<*br*>Morgan,Macquarie,RBS<*br*>Australia,UBS&b0=110,89,93,90,75,121,142,113&h0=73,117,96,132,100,108,151,126&s0=57,29,43,12,43,39,13,19" style="border-bottom: #000000 1px solid; border-left: #000000 1px solid; border-top: #000000 1px solid; border-right: #000000 1px solid" />