Tag Archives: Utilities

Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

By Chris Shaw

The past week has been balanced in terms of changes to ratings by brokers in the FNArena database. Total Buy ratings now stand at 50.12% following 13 ratings upgrades and 14 downgrades.

Citi upgraded both ANZ Banking Group ((ANZ)) and Commonwealth Bank ((CBA)) to Buy ratings from Neutral previously, in both cases attracted to the yields. Price targets have been increased for both stocks.

Beach Energy ((BPT)) enjoyed an upgrade to Buy from Sell by BA Merrill Lynch, as the broker took the view recent share price weakness has been excessive and the market is in fact overly pessimistic about the group's Cooper shale assets. BA-ML also upgraded Brambles ((BXB)) to Buy from Hold as part of a resumption of coverage given the combination of a defensive exposure, balance sheet flexibility and valuation support.

UBS continues to have a bias to leverage over safety with respect to Australian building material stocks and given this the broker has upgraded to a Buy rating on CSR ((CSR)) from Neutral previously. The change follows cuts to forecasts and price target to reflect soft housing numbers and a weak aluminium price.

Credit Suisse doesn't agree leverage is the key attribute for the sector and has downgraded CSR to Sell from Hold post the market update by the company. For Credit Suisse a positive rating simply does not seem justified given there remains downside earnings risk in the current environment.

Changes to commodity price forecasts have prompted Credit Suisse to upgrade Evolution Mining ((EVN)) to Buy from Hold. The upgrade is accompanied by adjustments to earnings estimates but the price target has remained unchanged.

It is a similar story for Western Areas ((WSA)), with Credit Suisse upgrading to a Buy recommendation from Hold previously following changes to commodity price and forex assumptions. Earnings estimates have also been revised, the result being a cut in price target.

As well, Credit Suisse has upgraded Incitec Pivot ((IPL)) to Buy from Hold given potential upside from the broker's view increased ammonium nitrate capacity should be absorbed by the market in coming years.

In contrast, Citi takes the view the earnings downgrade cycle for Incitec Pivot will continue as higher gas prices are increasing costs at the same time as ammonium nitrate volumes are falling. This is enough for Citi to cut its rating to Hold from Buy.

With Lend Lease ((LLC)) securing $2 billion in equity for the Barangaroo project, BA-ML sees far less risk with the project now than had been the case. Some changes to its model have resulted in an increase in price target and BA-ML has upgraded to Neutral from Sell on the stock.

Some contract wins by Matrix Composites and Engineering ((MCE)) have seen JP Morgan lift earnings forecasts and price target for the stock. With the shares now trading around the broker's estimate of fair value, the rating has been upgraded to Hold from Sell.

Factoring in acquisitions has seen UBS adjust its model for Stockland ((SGP)), as the deals should boost growth even without an improvement in market conditions. To reflect this, the rating has been upgraded to Buy from Neutral.

Tough operating conditions have caused RBS Australia to factor in lower growth assumptions for Ansell ((ANN)), which pushes down earnings assumptions and price target. The changes drive a change in rating to Hold from Buy.

RBS has similarly downgraded its rating on Ramsay Health Care ((RHC)) to Sell from Hold, this due to current earnings multiples being seen as unattractive and the stock trading above five-year averages. Changes to forecasts for Iluka ((ILU)) given lower sales forecasts and a deteriorating operating outlook have also prompted RBS to downgrade the stock to Neutral from Buy. Price target has been lowered on cuts to earnings estimates.

Credit Suisse has been active in downgrading ratings as well, cutting BHP Billiton ((BHP)) to Hold from Buy as changes to commodity price expectations have impacted on earnings assumptions. The price target for the stock went south as well. For a similar reason the broker has downgraded its rating on Caltex ((CTX)) to Hold from Buy, while moving to Sell from Hold on Sandfire ((SFR)) and to Hold from Buy on Santos ((STO)).

Domino's Pizza ((DMP)) continues to perform solidly and to reflect this Macquarie has lifted its earnings estimates and price target. At current levels valuation multiples are less attractive, leading the broker to cut its rating to Neutral from Outperform.

Ongoing weakness in European markets in particular and potential cuts to pathology fees may weigh on earnings for Sonic Healthcare ((SHL)) going forward in the view of RBS, which is enough for the broker to downgrade to a Hold rating from Buy.

An increasingly competitive environment is enough for Deutsche Bank to cut its rating on Telecom New Zealand ((TEL)) to Hold from Buy. The change comes after the TelstraClear acquisition by Vodafone, which is seen as evidence of more aggressive action in the market.

Macquarie has cut earnings forecasts and price target for UGL ((UGL)), this reflecting a slowing domestic economy and an associated lag in resource related project work. The changes are enough for the broker to cut its rating to Neutral from Buy.

Changes to price targets have been relatively modest over the week, with the largest increase for Domino's Pizza at just over 4% and the largest cuts around 5% for both Western Areas and BHP.

Transurban ((TCL)) has enjoyed the largest increase in earnings estimates at a little more than 20% on the back of June quarter traffic numbers. Resource companies dominated the cuts to earnings forecasts, with the likes of Iluka, Panoramic ((PAN)), Paladin ((PDN)) and Mount Gibson ((MGX)) seeing forecasts fall by 10-40%.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup Suisse,Deutsche<br>Bank,JP<br>Morgan,Macquarie,RBS<br>Australia,UBS&b0=119,106,121,100,82,140,149,132&h0=77,104,81,123,94,89,143,107&s0=40,21,29,4,35,34,10,16" style="border-bottom: #000000 1px solid; border-left: #000000 1px solid; border-top: #000000 1px solid; border-right: #000000 1px solid" />

Broker Rating

Order	Company	Old Rating	New Rating	Broker
Upgrade
1	AUSTRALIA & NEW ZEALAND BANKING GROUP	Neutral	Buy	Citi
2	BEACH ENERGY LIMITED	Sell	Buy	BA-Merrill Lynch
3	BRAMBLES LIMITED	Neutral	Buy	BA-Merrill Lynch
4	COMMONWEALTH BANK OF AUSTRALIA	Neutral	Buy	Citi
5	CSR LIMITED	Neutral	Buy	UBS
6	EVOLUTION MINING LIMITED	Neutral	Buy	Credit Suisse
7	ILUKA RESOURCES LIMITED	Neutral	Buy	UBS
8	INCITEC PIVOT LIMITED	Neutral	Buy	Credit Suisse
9	LEND LEASE CORPORATION LIMITED	Sell	Neutral	BA-Merrill Lynch
10	MATRIX COMPOSITES & ENGINEERING LIMITED	Sell	Neutral	JP Morgan
11	NEWCREST MINING LIMITED	Neutral	Buy	JP Morgan
12	STOCKLAND	Neutral	Buy	UBS
13	WESTERN AREAS NL	Neutral	Buy	Credit Suisse
Downgrade
14	ANSELL LIMITED	Buy	Neutral	RBS Australia
15	BHP BILLITON LIMITED	Buy	Neutral	Credit Suisse
16	CALTEX AUSTRALIA LIMITED	Buy	Neutral	Credit Suisse
17	COMMONWEALTH BANK OF AUSTRALIA	Buy	Neutral	JP Morgan
18	CSR LIMITED	Neutral	Sell	Credit Suisse
19	Domino's Pizza Enterprises Limited	Buy	Neutral	Macquarie
20	ILUKA RESOURCES LIMITED	Buy	Neutral	RBS Australia
21	INCITEC PIVOT LIMITED	Buy	Neutral	Citi
22	RAMSAY HEALTH CARE LIMITED	Neutral	Sell	RBS Australia
23	SANDFIRE RESOURCES NL	Neutral	Sell	Credit Suisse
24	SANTOS LIMITED	Buy	Neutral	Credit Suisse
25	SONIC HEALTHCARE LIMITED	Buy	Neutral	RBS Australia
26	TELECOM CORPORATION OF NEW ZEALAND LIMITED	Neutral	Neutral	Deutsche Bank
27	UGL LIMITED	Buy	Neutral	Macquarie

Recommendation

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	BPT	- 20.0%	20.0%	40.0%	5
2	AUT	- 20.0%	17.0%	37.0%	6
3	EVN	67.0%	100.0%	33.0%	3
4	AUB	50.0%	75.0%	25.0%	4
5	WSA	67.0%	83.0%	16.0%	6
6	BXB	71.0%	86.0%	15.0%	7
7	SGP	43.0%	57.0%	14.0%	7
8	NCM	75.0%	88.0%	13.0%	8
9	ANZ	25.0%	38.0%	13.0%	8
10	LLC	63.0%	75.0%	12.0%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	CRF	67.0%	43.0%	- 24.0%	7
2	DMP	50.0%	33.0%	- 17.0%	6
3	ANN	29.0%	14.0%	- 15.0%	7
4	UGL	86.0%	71.0%	- 15.0%	7
5	SHL	63.0%	50.0%	- 13.0%	8
6	STO	100.0%	88.0%	- 12.0%	8
7	BHP	75.0%	63.0%	- 12.0%	8
8	CQO	- 25.0%	- 33.0%	- 8.0%	3
9	VBA	75.0%	67.0%	- 8.0%	3
10	SFR	17.0%	14.0%	- 3.0%	7

Target Price

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	DMP	8.332	8.675	4.12%	6
2	AUB	7.148	7.373	3.15%	4
3	VBA	0.440	0.447	1.59%	3
4	SGP	3.479	3.507	0.80%	7
5	LLC	8.926	8.986	0.67%	8
6	ANZ	24.256	24.319	0.26%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	WSA	5.792	5.483	- 5.33%	6
2	BHP	43.865	41.824	- 4.65%	8
3	AUT	3.828	3.738	- 2.35%	6
4	ANN	14.977	14.639	- 2.26%	7
5	NCM	33.200	32.575	- 1.88%	8
6	CQO	3.478	3.420	- 1.67%	3
7	UGL	14.209	14.031	- 1.25%	7
8	BPT	1.376	1.362	- 1.02%	5
9	BXB	7.450	7.386	- 0.86%	7
10	CRF	2.070	2.060	- 0.48%	7

Earning Forecast

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	TCL	15.271	18.600	21.80%	7
2	BTT	15.500	16.180	4.39%	4
3	LLC	88.938	91.675	3.08%	8
4	WHG	10.400	10.650	2.40%	3
5	EVN	21.400	21.867	2.18%	3
6	FLT	211.713	216.000	2.02%	8
7	TEL	14.937	15.134	1.32%	8
8	CLO	8.100	8.167	0.83%	3
9	DMP	42.767	43.100	0.78%	6
10	NVT	23.714	23.857	0.60%	6

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	ILU	190.488	109.600	- 42.46%	8
2	PAN	9.275	5.350	- 42.32%	3
3	CSR	14.188	10.113	- 28.72%	8
4	PDN	2.260	1.847	- 18.27%	7
5	MGX	35.038	31.575	- 9.88%	8
6	IGO	18.720	16.940	- 9.51%	5
7	RIO	668.322	620.975	- 7.08%	8
8	WSA	31.683	29.550	- 6.73%	6
9	AUT	27.011	25.442	- 5.81%	6
10	OZL	67.338	63.438	- 5.79%	8

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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SMSFundamentals: Utilities And Reliable Yield

SMSFundamentals is an ongoing feature series dedicated to providing SMSFs (smurfs) with valuable news, investment ideas and services, in line with SMSF requirements and obligations.

For an introduction and story archive please visit FNArena's SMSFundamentals website.

By Greg Peel

The month of June saw Australia's ASX 300 Accumulation Index (accumulation indices include dividend returns) rise by 0.5%, underperforming the US, up 4.0%, the World MSCI (ex-Australia) index, up 4.9%, and the regional MSCI (ex-Japan), up 3.5%.

We don't have to look too far to work out why Australia underperformed, and this graph of the RBA commodities index holds a clue:

The resources sector fell 4.6% over the month while the All Industrials provided a plus 2.4% offset with defensive stocks, and yield, leading the way. Financials were up 4.8% (not defensive but high-yield), real estate investment trusts (REIT) were up 4.3%, healthcare was up 2.5% and telcos (read: Telstra) were up 3.6%.

If we have a look at the June quarter, a 5% fall in the ASX 200 Accumulation Index matched the MSCI World (down 5%) but year on year we are down 7% while the world is down 5%.

If you were invested in fixed interest ahead of the June quarter you've done rather well, with the 90-day bank bill rate falling 91 basis points (ie price increasing) to 3.27%, three-year government bonds falling 96bps to 2.52% and ten-year government bonds falling 99bps to 3.09%. The RBA cash rate is of course down 75bps over the period to 3.50%. While some bargains are still available from smaller banks, term deposit rates have felt the impact of the RBA cuts.

If you were not invested in fixed interest then it's worth appreciating bills and bonds are about as expensive as they've ever been and not offering yields of much more than the inflation rate. Not much to be excited about there as a longer term investor or an investor seeking income, other than the implicit safety of such assets. Australia is one of few countries still rated AAA. Capital preservation is indeed an important consideration in this current volatile environment but one would rather not dig into capital to cover the cost of living.

June data from the ASX tells the now-worn tale of little interest in trading the stock market, at least in terms of “risk” equities. Stock turnover value was down 10% in June from May and first half 2012 turnover was 16% lower than that of the first half 2011. By contrast, derivative volumes were up by 2% on the same half-half comparison, with SFE futures and options (these include interest rates as well as SPI) leading the charge over stock options.

The number of shares per stock option was dropped to 100 rather than 1000 last year, yet still the general market ignores the value of option strategies (particularly while implied volatilities are surprisingly low). It is the one area of financial markets in which Australia trails well behind the rest of the developed world, particularly the US.

Derivatives aside, where does a longer term investor with a need for income put their money?

If you were to ask the analysts at Deutsche Bank, they would reply that listed utilities are still the way to go. Despite a stand-out 2011 for regulated utilities, Deutsche was still convinced of upside potential as we moved into 2012, believing strong yields underpinned by defensive cashflows would be a key theme for the year. Six months later, the analysts' call has proved a good one. The question now, given subsequent further share/unit price rises, is: is the theme still valid?

“If anything,” says Deutsche, “this theme has increased since, resulting in continued sector outperformance. While we recognise that capital growth is upside potential is limited from here, we believe strong yields will continue to drive sector outperformance”.

Yield is often considered the poor cousin of capital growth, Deutsche notes, which is probably fair in a low-yielding market like that of the US, and hard to deny in boom times such as we saw pre-GFC. But even Americans are now embracing yield as the investment choice despite historically offering a market average 2.25% to Australia's 4.50%.

In Australia at present, regulated utilities (in Deutsche's coverage universe) are yielding over 7%. Such income looks pretty attractive when set against bonds, yielding under 4%, and given the sheer uncertainty of capital performance from the general equity market. On this basis, Deutsche sees a “compelling argument” to be overweight regulated utilities.

Of course the investor must always be wary of what a high yield implies. In debt terms, high yields imply high risk. In equity terms, a high yield can also imply risk given dividends/distributions are not necessarily fixed and at the discretion of the board, as opposed to coupon payments which are fixed or at least fixed above some floating rate such as the bank bill rate. If a company is short of cash, it can cut dividends – just look at the banks in 2009. Amidst the various infrastructure funds existing before the GFC we've even seen some distributions halted altogether. Yield levels are not a given.

Investors must also be very wary of “look back” dividend yields. If a stock price has fallen substantially since the last dividend paid but before the next dividend, “look back” yield measurements such as those often provided in newspapers can show startlingly attractive yields. It is very unlikely, however, the next dividend payment will match, or even come close, to the last payment, in which case that apparent yield will plunge.

It will all come down to cashflow, now that the days of borrowing to pay distributions are mostly behind us. If cashflow dries up, companies will seek to retain liquidity and a simple way to do that is not to hand anything much out to investors. Thus in choosing which yield stocks to invest in, one must look not simply at yield alone but whether the business providing that yield is based on sustainable cashflow.

This is where regulated utilities come to the fore. Note that “regulated” implies government mandated pricing, and the recent mandated indexing of the price of electricity in NSW, for example, which will see price rises of as much as 20%, shows government cannot simply set cheap prices in order to stay popular. There are other sectors in which government price-setting can be a big risk and we've seen evidence of that often enough – Telstra ((TLS)) in its earlier days and healthcare more recently under PBS changes. But utilities tend to be a lot more consistent, and while we can all learn to cut back on electricity, gas or water usage, we will still only be playing around at the margin. Utility cashflows are pretty safe.

Nearer term yields on regulated utilities are running at between 7.0% and 8.5% and Deutsche believes yields are generally sustainable. With the near-term exception of SP AusNet ((SPN)), cash coverage ratios are above 100%. This means the utilities are currently carrying more than enough cash to meet the distributions expected (which are usually based on a pre-set payout ratio).

Utilities must nevertheless spend money on capex, so Deutsche suggests an even more comforting measure of yield sustainability is to look at how much cash a utility will have after distributions and compare that to capex intentions. This will determine whether that utility does need to borrow, thus increasing gearing and threatening yields. The analysts have concluded, nevertheless, within the universe of utilities they cover, that this is not a problem.

Within the regulated utilities space, Deutsche prefers Spark Infrastructure ((SKI)) and APA Group ((APA)). In the wider utilities sector the analysts' top pick is AGL Energy ((AGK)).

A look at FNArena's Stock Analysis service shows database forecasts suggesting 10% earning growth for Spark in FY13, with 4.6% dividend growth for a 7.1% yield. APA is looking also at 10% earnings growth and 3% dividend growth for a 7.2% yield. AGL's numbers are 15.6% earnings and 6.9% dividend growth for a 4.5% yield.

The following stocks make up the ASX 200 utilities index:

AGL Energy, APA Group, Duet Group ((DUE)), Energy World Corporation ((EWC)), Envestra ((ENV)), Hastings Diversified Utilities ((HDF)), Infigen Energy ((IFN)), SP Ausnet and Spark Infrastructure.

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Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

By Chris Shaw

The number of changes in broker ratings picked up over the past week, with the eight brokers in the FNArena database upgrading 12 recommendations and downgrading seven. This leaves total Buy ratings at 49.85%.

On the upgrade side is Ansell ((ANN)), where Citi has moved to a Buy rating from Neutral given improved value following recent share price weakness. The broker also made modest changes to earnings estimates and price target to reflect updated forex assumptions.

Aurora Oil and Gas ((AUT)) similarly enjoyed an upgrade to a Buy rating from Hold previously, this courtesy of UBS. While an increased stake in the Sugarloaf project is a positive for earnings the production growth profile remains a major attraction for the broker. As with Ansell, Aurora's rating upgrade also reflects improved valuation following recent share price falls.

Better than expected interim earnings guidance from Caltex ((CTX)) helped prompt Credit Suisse to upgrade to a Buy rating on the stock from Neutral previously. A decision to close the refineries operations offers long-term upside in the view of Credit Suisse and supports the upgrade in rating. Across the market brokers revised earnings forecasts and price targets to reflect the new guidance from management.

Credit Suisse went further on Energy Resources of Australia ((ERA)) and upgraded to a Buy rating from Sell previously. The change follows a site visit and some positive signals from traditional landowners, which leaves the broker more positive the company can extract full value from the Ranger 3 Deeps resource.

For Orica ((ORI)), RBS Australia is attracted to the long-term dynamics of the explosives business to upgrade to a Buy rating from Hold. The company is a quality business and in the broker's view now is a good time for longer-term investors to be looking at buying into the stock.

Citi has revised its model for QBE Insurance ((QBE)) to reflect a marking to market of investments and changes to forex assumptions and the end result is an upgrade to a Buy from Neutral previously. The call is largely a valuation one as Citi is now seeing some upside to its price target.

Changed production expectations for Sandfire ((SFR)) have prompted some adjustments to UBS's model, the result being a trimming of price target. At the same time the broker has upgraded to Buy from Neutral on the stock to reflect both recent share price falls and the attraction of high grade copper exposure.

Santos ((STO)) announced some increased capex for its GLNG plant this week but the news has not deterred Credit Suisse, the broker moving to a Buy rating from Hold as the share price fall in reaction to the news was viewed as an overreaction. Credit Suisse and others have adjusted earnings estimates and price targets for Santos to reflect the increase in capex.

Macquarie has moved to an Outperform rating from Neutral on SP Ausnet ((SPN)) as part of a reinstatement of coverage. The attraction is a better yield and asset base than peers and stronger expected investment returns.

Post a tour of Toll's ((TOL)) Asian assets Credit Suisse has upgraded to a Buy rating on the stock from Neutral, reflecting the view the company is well placed for when the cycle eventually turns more favourable. At the same time Credit Suisse trimmed earnings estimates and price target for the stock.

UBS expects operational improvements and cost cutting measures implemented by Transpacific Industries ((TPI)) will start to feed through to earnings, while the sale of some non-core assets is also a positive.

This has TPI well placed for a re-rating once the market better understands the outlook for the company in UBS's view and sees the broker upgrade its rating to Buy from Neutral.

UBS also upgraded Western Areas ((WSA)) to a Buy from Neutral post the company announcing an increase in reserves at the Spotted Quoll project. Adding weight to the upgrade is improved valuation following recent share price weakness.

On the downgrade side of the market the only stock to receive multiple rating changes was Billabong ((BBG)), where both Citi and UBS downgraded ratings. Citi cut its rating to Sell from Hold, while UBS went further and downgraded to a Sell from Buy previously.

Both changes were in response to the equity raising announced by the company as it attempts to address balance sheet issues. In both cases, the brokers question whether there is value at current levels given future strategy has not been fully outlined and earnings issues are yet to be addressed. Others in the market also adjusted targets and earnings estimates to account for the raising and revised earnings guidance from management.

A cut to earnings guidance from management at Boral ((BLD)) was enough for Macquarie to downgrade to a Sell rating from Neutral as earnings estimates were cut to reflect bad weather, weak trading and project delays. Macquarie and others cut price targets for Boral post the update.

Macquarie also downgraded Cochlear ((COH)) to Hold from Buy but for valuation reasons given recent share price strength. Minor changes to its model for the stock saw the broker revised earnings estimates at the same time.

For exactly the same reason of recent share price strength, Citi cut its rating on CSL ((CSL)) to Hold from Buy, while also making minor changes to earnings estimates to account for changes to foreign exchange assumptions.

BA Merrill Lynch downgraded NIB Holdings ((NHF)) post a strategy day as the broker now sees organic growth for the company as becoming tougher to achieve. At the same time a capital management program appears to have largely run its course, which reduces one investment attraction in the broker's view.

RBS has downgraded QRXPharma ((QRX)) on news the US FDA has not granted approval for MoxDuo IR as had been expected. This implies delays and has forced the broker to factor this into its model, which also impacts on earnings estimates and price target.

While not seeing any changes in broker ratings, Consolidated Media ((CMJ)) enjoyed a increase in consensus price target over the week of just over 6%, while outside of QRX Pharma the largest cuts in targets were experienced by Aquarius ((AQP)) and Evolution Mining ((EVN)).

Other reasonable increases to earnings estimates were enjoyed by BC Iron ((BCI)) and Bank of Queensland ((BOQ)), while cuts to forecasts were most significant for Transpacific, Ten Network ((TEN)), Transurban and Horizon Oil ((HZN)).

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup Suisse,Deutsche<br>Bank,JP<br>Morgan,Macquarie,RBS<br>Australia,UBS&b0=115,104,117,101,81,143,150,128&h0=79,104,84,119,94,84,141,109&s0=42,21,26,6,35,35,9,17" style="border-bottom: #000000 1px solid; border-left: #000000 1px solid; border-top: #000000 1px solid; border-right: #000000 1px solid" />

Broker Rating

Order	Company	Old Rating	New Rating	Broker
Upgrade
1	ANSELL LIMITED	Neutral	Buy	Citi
2	AURORA OIL AND GAS LIMITED	Neutral	Buy	UBS
3	CALTEX AUSTRALIA LIMITED	Neutral	Buy	Credit Suisse
4	ENERGY RESOURCES OF AUSTRALIA	Sell	Buy	Credit Suisse
5	ORICA LIMITED	Neutral	Buy	RBS Australia
6	QBE INSURANCE GROUP LIMITED	Neutral	Buy	Citi
7	SANDFIRE RESOURCES NL	Neutral	Buy	UBS
8	SANTOS LIMITED	Neutral	Buy	Credit Suisse
9	SP AUSNET	Neutral	Buy	Macquarie
10	TOLL HOLDINGS LIMITED	Neutral	Buy	Credit Suisse
11	Transpacific Industries Group Ltd	Neutral	Buy	UBS
12	WESTERN AREAS NL	Neutral	Buy	UBS
Downgrade
13	BILLABONG INTERNATIONAL LIMITED	Neutral	Sell	Citi
14	BILLABONG INTERNATIONAL LIMITED	Buy	Sell	UBS
15	BORAL LIMITED	Neutral	Sell	Macquarie
16	COCHLEAR LIMITED	Buy	Neutral	Macquarie
17	CSL LIMITED	Buy	Neutral	Citi
18	NIB HOLDINGS LIMITED	Buy	Neutral	BA-Merrill Lynch
19	QRXPHARMA LTD	Buy	Neutral	RBS Australia

Recommendation

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	ERA	- 13.0%	13.0%	26.0%	8
2	AUT	- 40.0%	- 20.0%	20.0%	5
3	WSA	50.0%	67.0%	17.0%	6
4	GRR	83.0%	100.0%	17.0%	6
5	TPI	50.0%	67.0%	17.0%	6
6	ANN	14.0%	29.0%	15.0%	7
7	TOL	14.0%	29.0%	15.0%	7
8	MGX	25.0%	38.0%	13.0%	8
9	ILU	50.0%	63.0%	13.0%	8
10	QBE	63.0%	75.0%	12.0%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	EVN	100.0%	67.0%	- 33.0%	3
2	QRX	100.0%	67.0%	- 33.0%	3
3	NHF	100.0%	75.0%	- 25.0%	4
4	AQP	60.0%	40.0%	- 20.0%	5
5	CMJ	29.0%	14.0%	- 15.0%	7
6	CSL	63.0%	50.0%	- 13.0%	8
7	COH	- 38.0%	- 50.0%	- 12.0%	8
8	OZL	50.0%	38.0%	- 12.0%	8
9	PRU	60.0%	50.0%	- 10.0%	6
10	VBA	83.0%	75.0%	- 8.0%	4

Target Price

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	CMJ	3.154	3.358	6.47%	7
2	ERA	1.643	1.674	1.89%	8
3	GRR	0.838	0.845	0.84%	6
4	NHF	1.695	1.698	0.18%	4
5	WSA	5.908	5.917	0.15%	6
6	GMG	3.001	3.005	0.13%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	QRX	2.773	1.210	- 56.36%	3
2	AQP	2.800	2.538	- 9.36%	5
3	EVN	2.175	1.983	- 8.83%	3
4	QAN	1.638	1.529	- 6.65%	7
5	OZL	11.540	10.844	- 6.03%	8
6	PRU	3.280	3.158	- 3.72%	6
7	TPI	0.923	0.895	- 3.03%	6
8	MGX	1.429	1.414	- 1.05%	8
9	TOL	5.074	5.031	- 0.85%	7
10	AUT	3.874	3.844	- 0.77%	5

Earning Forecast

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	BCI	41.100	44.033	7.14%	3
2	BOQ	15.600	16.563	6.17%	8
3	SVW	77.680	82.260	5.90%	4
4	AMP	32.100	33.263	3.62%	8
5	NHF	12.950	13.325	2.90%	4
6	EVN	23.650	24.267	2.61%	3
7	CWN	57.675	58.363	1.19%	7
8	QBE	136.112	137.261	0.84%	8
9	AIO	25.413	25.550	0.54%	7
10	IAG	25.538	25.663	0.49%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	TPI	5.767	4.683	- 18.80%	6
2	TEN	2.328	1.953	- 16.11%	8
3	TCL	13.686	12.271	- 10.34%	7
4	HZN	0.951	0.855	- 10.09%	4
5	SGM	13.729	12.629	- 8.01%	7
6	ROC	4.794	4.525	- 5.61%	5
7	OZL	71.388	68.213	- 4.45%	8
8	AQG	64.336	61.807	- 3.93%	7
9	AUT	28.202	27.159	- 3.70%	5
10	STO	70.075	67.900	- 3.10%	8

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Uranium Lacked Energy In May

By Andrew Nelson

The best you can say for the global uranium market in May is; at least it was steady. Other commentators used words like flat, listless, sluggish and languishing, with the slight dip in the spot price over the last week of the month doing little to help matters.

Industry consultant TradeTech reports there were just 17 transactions in the uranium spot market last month, with just a tad over 2 million pounds U3O8 equivalent shifted over the course of May. The level of activity was well down on April, with the previous month seeing 3.2 million pounds being traded.

The bulk of May spot market buyers were traders, with the market seeing few signs of life coming from utilities. Despite the lack of buyers, prices remained steady, with TradeTech noting a decent level of activity coming from a solid increase in mid-term and long-term demand.

TradeTech’s U308 spot price ended the month down 25c from the end of April, finishing the month at US$51.25. The mid-term price added 50c to end the month at US$54.50, while the long term price was flat at US$61.00.

According to TradeTech, May was dominated by buyers looking for delivery later in the year, or early into next year. Given the seeming lack of interest in spot purchases, most sellers shifted focus to mid and long-term buyers as well. At the end of May, a very motivated seller hit the market with lower priced stock, which is where we saw the slight pullback in spot prices.

Last week, Trade Tech reported two transactions that totaled 150 thousand pounds, with traders acting as both buyers and sellers in the transactions. Over the course of last week, the U308 spot price gave up more than the minor gains posted over the month, with the read down $1.75 to $50.25. The mid-term and long-term prices were flat last week at $54.50 and $62.00 respectively.

Yet while trading remains sluggish, TradeTech reports some positive development over the course of last month that could translate into a better looking market in the week and months ahead. Canadian uranium producer Cameco said it plans to buy nuclear fuel trader NUKEM, while BHP Billiton ((BHP)) may well shelf plans for its Olympic Dam expansion project.

There was also positive news from the US Secretary of Energy, who claimed the re-enrichment of 9,000 tonnes of depleted uranium would not adversely impact the market.

There were some signs of life last week, with Trade Tech reporting there are still a few utilities out there that continue to evaluate offers. One non-US utility is still looking for 1 million pounds for delivery over a five-year period, while another non-US utility is looking for about 1.2 million pounds over four years. A third non-US utility is looking for 1.7 million pounds over the long term, while another non-US utility is looking for an undisclosed amount the be delivered between 2018 and continuing through 2023.

There was some activity that could affect shorter-term pricing, with yet another non-US utility seeking up to 2.9 million pounds for delivery beginning this year, while a US utility is reviewing offers for long-term deliveries that would begin also begin this year.

There was little in the way of Australian broker commentary on the topic of Uranium last week, although JP Morgan analyst Mark Busuttil did say he thought current uranium spot prices were too low and did little to encourage new production. He therefore expects prices will probably start to rise towards the end of this year.

In the domestic uranium sector, the broker likes Paladin ((PDN)) best given current M&A activity and on the view it offers the best leverage to uranium prices.

There was also a bit of good news that came out of China, with the Chinese State Council approving a new nuclear safety strategy, while also giving the thumbs up to current and under construction infrastructure. This is good news, points out Busuttil, as it clears the way for China to start approving new nuclear power construction and capacity plans.

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The Short Report

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By Chris Shaw

For the week from May 22 the largest short position increase on the ASX was in Sundance Resources ((SDL)), where positions rose from just 0.27% to 2.24%. This occurred just prior to the company presenting at a mining forum in Cameroon and agreeing some key terms for its Mbalam iron ore project.

The next largest increase was in Iluka ((ILU)), where shorts increased to 8.93% from 7.08% after the company updated both zircon sales guidance and the outlook for the zircon market in general. Lower sales volumes and a slow recovery in the market are priced into the stock at current levels in the view of Macquarie.

A jump in shorts to 8.89% from 7.46% previously for Gunns ((GNS)) comes on the back of an update from management that included news of the sale of the Heyfield timber business. Further asset sales are expected as is a significant capital raising, so changes in shorts likely reflect positioning for such an event.

Among those to enjoy significant falls in short positions for the week from May 22 were retail plays David Jones ((DJS)) and Myer ((MYR)), the former seeing a decline in shorts to 8.81% from 10.51% and the latter to 9.72% from 11.21%.

The change for David Jones came ahead of what was viewed by most as a disappointing 3Q sales result, though the result did at least give some indication sales were stabilising. The change for Myer follows a trading update that included a cut in earnings guidance, which led brokers to comment upcoming sales periods for both companies will be important for full year earnings.

Despite the falls in respective short positions both David Jones and Myer remain among the top 20 short positions on the Australian market, along with other consumer discretionary plays such as JB Hi-Fi ((JBH)), Billabong ((BBG)), Harvey Norman ((HVN)), Flight Centre ((FLT)) and Carsales.com ((CRZ)).

Also among the top 20 are Iluka, Paladin ((PDN)) and Lynas ((LYC)) among resource plays, Echo Entertainment ((EGP)) in the gaming sector, building materials play CSR ((CSR)), rural group Elders ((ELD)) and biotech play Mesoblast ((MSB)). Shorts in both Echo Entertainment and Paladin fell by around 1.0 percentage point in the week from May 22.

Shorts in Western Areas ((WSA)) declined to 4.66% from 6.07% the week prior after the market updated expectations to reflect higher production and sales guidance from the company, while shorts in Whitehaven Coal ((WHC)) also declined to 0.74% from 1.94% as the company supplied an initial resource for the Ferndale project.

From the perspective of monthly changes in shorts for the period from April 26, Iluka experienced the largest increase with a move to 8.93% from 6.48% the month prior. Sparsely covered Linc Energy ((LNC)) also saw a jump in shorts to 5.58% from 3.34%, this despite management responding to an ASX query by confirming previous guidance for oil production and cash management for the full year.

A number of the top 20 short position stocks saw total positions increase by around 1.0% or more in the month from April 26, these including Billabong, Gunns, Harvey Norman, Flight Centre, Western Areas, CSR and Elders.

On the side of falling short positions, Whitehaven saw the greatest decline for the month, while utilities Spark Infrastructure ((SKI)) and Australian Pipeline Trust ((APA)) also enjoyed solid falls in total positions. For the former shorts fell to 2.29% from 5.46% and for the latter to 1.02% from 3.23% as the market continues to digest potential acquisitions in both cases.

Shorts in SingTel ((SGT)) declined to 3.6% from 5.93% the month before as the market viewed full year earnings as broadly in line with expectations, while a solid update indicating fund performance has been good and there is potential for an increase in fund inflows in coming months may have helped shorts in Henderson Group ((HGG)) fall to 0.69% from 2.26% previously.

Elsewhere in the market, RBS Australia notes Metcash ((MTS)) short positions have increased by more than 50 basis points over the past three weeks and now stand at 5.5%. In RBS's view such an increase is justified by weak trading conditions, which are expected to pressure independent supermarkets more than those of Coles and Woolworths ((WOW)). Such a trend would make it more difficult for Metash to sell many of its Franklins stores.

Investors should note past research conducted by RBS has shown that increasing/decreasing short positions for an individual stock can function as an early indication for the share price underperforming/outperforming respectively in the weeks/months ahead.

Top 20 Largest Short Positions

Rank	Symbol	Short Position	Total Product	%Short
1	JBH	23026494	98850643	23.29
2	FLT	11708664	100031742	11.70
3	CRZ	27135451	233689223	11.60
4	FXJ	269444917	2351955725	11.48
5	COH	6460589	56929432	11.32
6	LYC	175865064	1714846913	10.26
7	ISO	564043	5703165	9.89
8	MYR	56759223	583384551	9.72
9	BBG	24988441	257888239	9.69
10	ILU	37466989	418700517	8.93
11	GNS	75481203	848401559	8.89
12	HVN	94109184	1062316784	8.83
13	DJS	46649603	528655600	8.81
14	EGP	52714970	688019737	7.66
15	WTF	15883143	211736244	7.49
16	CSR	36894219	506000315	7.29
17	PDN	60483039	835645290	7.22
18	MSB	16644576	284478361	5.85
19	GWA	17206537	302005514	5.71
20	ELD	25258709	448598480	5.63

To see the full Short Report, please go to this link

IMPORTANT INFORMATION ABOUT THIS REPORT

The above information is sourced from daily reports published by the Australian Investment & Securities Commission (ASIC) and is provided by FNArena unqualified as a service to subscribers. FNArena would like to make it very clear that immediate assumptions cannot be drawn from the numbers alone.

It is wrong to assume that short percentages published by ASIC simply imply negative market positions held by fund managers or others looking to profit from a fall in respective share prices. While all or part of certain short percentages may indeed imply such, there are also a myriad of other reasons why a short position might be held which does not render that position “naked” given offsetting positions held elsewhere. Whatever balance of percentages truly is a “short” position would suggest there are negative views on a stock held by some in the market and also would suggest that were the news flow on that stock to turn suddenly positive, “short covering” may spark a short, sharp rally in that share price. However short positions held as an offset against another position may prove merely benign.

Often large short positions can be attributable to a listed hybrid security on the same stock where traders look to “strip out” the option value of the hybrid with offsetting listed option and stock positions. Short positions may form part of a short stock portfolio offsetting a long share price index (SPI) futures portfolio – a popular trade which seeks to exploit windows of opportunity when the SPI price trades at an overextended discount to fair value. Short positions may be held as a hedge by a broking house providing dividend reinvestment plan (DRP) underwriting services or other similar services. Short positions will occasionally need to be adopted by market makers in listed equity exchange traded fund products (EFT). All of the above are just some of the reasons why a short position may be held in a stock but can be considered benign in share price direction terms due to offsets.

Market makers in stock and stock index options will also hedge their portfolios using short positions where necessary. These delta hedges often form the other side of a client's long stock-long put option protection trade, or perhaps long stock-short call option (“buy-write”) position. In a clear example of how published short percentages can be misleading, an options market maker may hold a short position below the implied delta hedge level and that actually implies a “long” position in that stock.

Another popular trading strategy is that of “pairs trading” in which one stock is held short against a long position in another stock. Such positions look to exploit perceived imbalances in the valuations of two stocks and imply a “net neutral” market position.

Aside from all the above reasons as to why it would be a potential misconception to draw simply conclusions on short percentages, there are even wider issues to consider. ASIC itself will admit that short position data is not an exact science given the onus on market participants to declare to their broker when positions truly are “short”. Without any suggestion of deceit, there are always participants who are ignorant of the regulations. Discrepancies can also arise when short positions are held by a large investment banking operation offering multiple stock market services as well as proprietary trading activities. Such activity can introduce the possibility of either non-counting or double-counting when custodians are involved and beneficial ownership issues become unclear.

Finally, a simple fact is that the Australian Securities Exchange also keeps its own register of short positions. The figures provided by ASIC and by the ASX at any point do not necessarily correlate.

FNArena has offered this qualified explanation of the vagaries of short stock positions as a warning to subscribers not to jump to any conclusions or to make investment decisions based solely on these unqualified numbers. FNArena strongly suggests investors seek advice from their stock broker or financial adviser before acting upon any of the information provided herein.

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Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

By Chris Shaw

In a reversal of the dominant trend of recent weeks, upgrades to broker ratings outweighed downgrades by a total of nine to six over the past week. Total Buy ratings according to the eight brokers in the FNArena database now stand at 49.28%.

Among the upgrades was AGL Energy ((AGK)), where Citi moved to a Buy rating from Neutral as part of a resumption of coverage following the Loy Yang A acquisition. The deal is earnings accretive, adds more energy to AGL's portfolio and reduces supply risk, all of which are positives in the broker's view.

Citi also upgraded Centro Retail ((CRF)) to Buy from Neutral, reflecting not only recent relative underperformance but some company specific positives. These include the settlement of class action litigation and solid asset sale results and imply the stock now offers better value and a less risky proposition.

A solid full year earnings result from Programmed Maintenance Services ((PRG)) was enough for Citi to upgrade to a Buy recommendation from Neutral, they key to the more positive view being greater stability in earnings following restructuring efforts over the past few years. There is also value on offer according to Citi given an attractive earnings multiple and dividend yield.

Improved valuation was behind Citi's decision to upgrade Sigma Pharmaceutical ((SIP)) to Buy from Hold. Over the past month Sigma shares are down around 12%, enough in Citi's view to make the stock look relatively attractive again.

For similar reasons JP Morgan has upgraded Ausenco ((AAX)) to Overweight from Neutral, the broker noting the stock has lost around 20% over the past month to the point where the shares now offer "compelling value".

JP Morgan also upgraded ANZ Banking Group ((ANZ)) to Neutral from Underweight, this to reflect recent relative price moves among the major banks. While the sector is likely to struggle from a lack of credit growth in the medium-term, the broker has lifted its ANZ rating while downgrading National Australia Bank ((NAB)) to Underweight from Neutral on respective share price changes.

JP Morgan's earnings estimates and price targets have been adjusted across the banking sector, while Macquarie has upgraded Suncorp Group ((SUN)) to Neutral from Sell. This reflects improved valuation from recent share price weakness, while the broker also sees potential longer-term benefits from further cost efficiencies.

On news of the sale of its Technology Solutions business CSG ((CSV)) has been upgraded to Hold from Sell by RBS Australia. The sale is viewed positively as it allows for better focus on the remainder of CSG's operations, while also opens up the potential for a special dividend to shareholders. Price target was also lifted on the news.

The attraction of Monadelphous ((MND)) for Deutsche Bank is the group's level of contract sales and exposure to projects unlikely to be deferred, which in the broker's view means the stock is being undervalue at current levels. Given a solid earnings growth outlook, Deutsche moves to a Buy from Hold previously, this despite a trimming in price target.

Turning to the downgrades and RBS Australia has cut its rating on Acrux ((ACR)) to Hold from Buy on valuation grounds as the stock has gained 25% since the broker's last report. Echo Entertainment ((EGP)) was also downgraded to Neutral from Overweight by JP Morgan, this given a trading update implied a tougher outlook for some of the group's casino operations. While forecasts and price targets have been lowered, JP Morgan continues to see some downside risk to earnings.

Transurban ((TCL)) has been downgraded to Hold from Buy by BA Merrill Lynch, this given the valuation impact of the pushing back of the M2 completion date, a toll freeze on the same road and softer than expected traffic numbers. Supporting the downgrade in BA-ML's view is the stock is very yield sensitive, the changes to its model generating a slight cut in dividend expectations.

The only stock to be downgraded by two brokers this week was Sims Group ((SGM)), both Macquarie and BA-ML moving to Sell ratings from Buy previously. The changes come after a trading update included weak earnings guidance, both brokers suggesting in the currently difficult trading environment share price outperformance for Sims is unlikely.

The trading update saw Sims top the list in terms of the largest cuts to broker price targets, while Programmed Maintenance enjoyed the largest increase in price targets following what was a well received profit result.

The database shows some solid positive revisions to earnings estimates for Alesco ((ALS)), while Sims, Echo Entertainment and Lynas Corporation ((LYC)) saw the largest cuts to forecasts. The changes for Lynas reflect uncertainty with respect to the granting of a temporary operating licence for its LAMP plus falling rare earth prices.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup

Broker Rating

Order	Company	Old Rating	New Rating	Broker
Upgrade
1	AGL ENERGY LTD	Neutral	Buy	Citi
2	AUSENCO LTD	Neutral	Buy	JP Morgan
3	AUSTRALIA & NEW ZEALAND BANKING GROUP	Sell	Neutral	JP Morgan
4	CENTRO RETAIL AUSTRALIA	Neutral	Buy	Citi
5	CSG LIMITED	Sell	Neutral	RBS Australia
6	MONADELPHOUS GROUP LIMITED	Neutral	Buy	Deutsche Bank
7	PROGRAMMED MAINTENANCE SERVICES LIMITED	Neutral	Buy	Citi
8	Sigma Pharmaceuticals Ltd	Sell	Neutral	Citi
9	SUNCORP GROUP LIMITED	Sell	Neutral	Macquarie
Downgrade
10	ACRUX LIMITED	Buy	Neutral	RBS Australia
11	ECHO ENTERTAINMENT GROUP LIMITED	Buy	Neutral	JP Morgan
12	NATIONAL AUSTRALIA BANK LIMITED	Neutral	Sell	JP Morgan
13	SIMS METAL MANAGEMENT LIMITED	Buy	Sell	Macquarie
14	SIMS METAL MANAGEMENT LIMITED	Buy	Sell	BA-Merrill Lynch
15	TRANSURBAN GROUP	Buy	Neutral	BA-Merrill Lynch

Recommendation

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	AAX	80.0%	100.0%	20.0%	5
2	PRT	50.0%	67.0%	17.0%	6
3	MND	33.0%	50.0%	17.0%	6
4	CRF	50.0%	67.0%	17.0%	6
5	SIP	- 29.0%	- 14.0%	15.0%	7
6	PRG	86.0%	100.0%	14.0%	7
7	BSL	43.0%	57.0%	14.0%	7
8	SUN	75.0%	88.0%	13.0%	8
9	AGK	63.0%	75.0%	12.0%	8
10	ANZ	13.0%	25.0%	12.0%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	SGM	100.0%	43.0%	- 57.0%	7
2	TGA	67.0%	33.0%	- 34.0%	3
3	SLM	40.0%	20.0%	- 20.0%	5
4	TCL	71.0%	57.0%	- 14.0%	7
5	EGP	38.0%	25.0%	- 13.0%	8

Target Price

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	PRG	2.584	2.747	6.31%	7
2	CRF	2.005	2.060	2.74%	6
3	API	0.378	0.388	2.65%	4
4	AGK	16.264	16.391	0.78%	8
5	PRT	0.807	0.813	0.74%	6
6	TCL	6.067	6.103	0.59%	7
7	SUN	9.258	9.278	0.22%	8
8	SIP	0.629	0.630	0.16%	7

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	SGM	17.673	15.146	- 14.30%	7
2	SLM	2.922	2.562	- 12.32%	5
3	TGA	1.770	1.687	- 4.69%	3
4	EGP	4.620	4.554	- 1.43%	8
5	ANZ	24.491	24.256	- 0.96%	8
6	PRU	3.264	3.238	- 0.80%	4
7	MND	23.288	23.110	- 0.76%	6
8	BSL	0.603	0.599	- 0.66%	7

Earning Forecast

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	ALS	16.800	23.757	41.41%	6
2	AIZ	3.015	3.211	6.50%	4
3	SGP	30.029	31.357	4.42%	7
4	TGA	20.267	20.500	1.15%	3
5	SUN	63.975	64.435	0.72%	8
6	CRF	10.367	10.400	0.32%	6
7	IIN	24.917	24.983	0.26%	6
8	DJS	20.263	20.313	0.25%	8
9	GNC	102.733	102.983	0.24%	6
10	ORG	79.725	79.913	0.24%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	LYC	0.317	- 1.750	- 652.05%	5
2	SGM	24.543	13.729	- 44.06%	7
3	EGP	20.438	18.550	- 9.24%	8
4	PRY	24.125	23.050	- 4.46%	8
5	WHC	6.957	6.657	- 4.31%	7
6	PRG	30.514	29.214	- 4.26%	7
7	SLM	26.567	25.617	- 3.58%	5
8	QAN	9.663	9.488	- 1.81%	8
9	TEN	3.575	3.525	- 1.40%	8
10	ORL	64.200	63.600	- 0.93%	5

Technical limitations

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The Short Report

.ref1 {background-color:#B8E3F8;}

By Chris Shaw

Earlier this month Western Areas ((WSA)) lifted production and sales guidance for FY12 but the news was not enough to stop the company from experiencing the largest increase in short positions for the week from May 15. Shorts in the stock rose to 6.07% from 4.66%.

The next most significant increase occurred in Goodman Fielder ((GFF)), where shorts rose to 2.9% from 1.63% the week prior. The increase preceded news Cargill was again showing interest in acquiring Goodman's Integro edible fats and oils business. The revived interest from Cargill was seen as something of a surprise given the previous approach had been rejected by the ACCC.

Among the falls in short positions for the week from May 15 the largest was in Mirabela Nickel ((MBN)), the change in positions to 2.97% from 5.17% coinciding with a capital raising by the company. An equity issue of $120 million was announced, Credit Suisse expecting the move will allay some of the market's concerns with respect to Mirabela's balance sheet.

SingTel ((SGT)) also enjoyed a fall in short positions, the total declining to 3.79% from 5.58% previously. The change followed a full year earnings result that broadly met market expectations, though Citi notes guidance for the coming year was somewhat uninspiring.

The next largest decline in shorts for the week was in M2 Telecommunications ((MTU)), where positions fell to 0.15% from 1.59% previously. As with Mirabela the change in positions in M2 follows a capital raising, as an entitlement offer raised more than $83 million to partially fund the recent acquisition of Primus Telecoms Holdings.

With none of the top 20 short positions experiencing much change over the week the consumer discretionary sector continues to dominate, with large short positions remaining in JB Hi-Fi ((JBH)), Myer ((MYR)), David Jones ((DJS)), Billabong ((BBG)) and Harvey Norman ((HVN)).

For the week from May 15 Flight Centre ((FLT)) and Carsales.com ((CRZ)) were the second and third largest short positions in the market behind JB Hi-Fi, Flight Centre seeing shorts increase in the month from April 20 to 11.66% from 10.09%.

Other significant increases for the month from April 20 were seen in both the aforementioned Western Areas and Paladin ((PDN)), the latter given the view in the market attention in coming months would focus on balance sheet and cash flow issues rather than production performance. For the month Paladin's shorts increased to 8.21% from 5.74% previously.

Dart Energy ((DTE)) experienced a doubling in shorts for the month from April 20 to 4.43% from 2.16% previously, this despite the company lifting its shale gas estimates to as much as 143TCF and indicating during the period its European business remained on track.

Whitehaven Coal ((WHC)) enjoyed the largest fall in short positions for the month, positions declining to 1.94% from 7.26% previously at the same time as the company announced a takeover attempt for Coalworks ((CWK)), in which Whitehaven already held a 17% stake.

Spark Infrastructure ((SKI)) also saw shorts decline significantly for the month to 2.19% from 5.42% the month prior, this as brokers continue to adjust models and opinions on the stock to account for Spark's interest in acquiring the Sydney Desalination Plant.

Having previously indicated its intention to acquire Hastings Diversified ((HDF)) the need to address ACCC concerns saw Australian Pipeline Trust ((APA)) make some revisions to its proposal that Credit Suisse at least sees as increasing the likelihood the acquisition is allowed to proceed. As this was playing out shorts in APA fell for the month to 0.96% from 3.2% previously.

RBS Australia notes shorts in Telecom Corporation ((TEL)) have been edging higher over the past two months, the broker seeing this as reflective of ongoing earnings concerns over the medium-term. According to RBS, it will likely take around two years for Telecom to establish a solid base for operating gains, while an eventual re-focus on growth is likely to be somewhat painful shorter-term and require additional resources to be fully implemented.

Top 20 Largest Short Positions

Rank	Symbol	Short Position	Total Product	%Short
1	JBH	23018840	98850643	23.29
2	FLT	11678508	100031742	11.66
3	CRZ	27060531	233684223	11.60
4	ISO	650567	5703165	11.41
5	MYR	65516262	583384551	11.21
6	FXJ	259056138	2351955725	11.04
7	COH	6238534	56929432	10.90
8	DJS	55607570	528655600	10.51
9	LYC	167718400	1714846913	9.78
10	BBG	23327926	257888239	9.02
11	HVN	95272471	1062316784	8.95
12	EGP	60321600	688019737	8.76
13	PDN	68323012	835645290	8.21
14	GNS	63345192	848401559	7.46
15	CSR	37024145	506000315	7.31
16	WTF	15263261	211736244	7.21
17	ILU	29689294	418700517	7.08
18	WSA	10906664	179735899	6.07
19	ELD	26464169	448598480	5.91
20	TRS	1516903	26071170	5.83

To see the full Short Report, please go to this link

IMPORTANT INFORMATION ABOUT THIS REPORT

Technical limitations

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Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

By Chris Shaw

In the past week downgrades to recommendations from the eight brokers in the FNArena database have again outweighed upgrades to the tune of 14 to eight, the result being total Buy ratings now stand at 49.16%.

Among the positive ratings changes was RBS Australia shifting to a Buy rating on Campbell Brothers ((CPB)) from Hold previously, the broker taking the view there is now a buying opportunity in the stock given recent macro-driven selling across the market. Supporting the upgrade is RBS's expectation the upcoming full year result will include some positive commentary from management.

Gloucester Coal ((GCL)) has been upgraded by Macquarie to Neutral from Underweight previously, this a valuation call following changes to the broker's forex and commodity price assumptions. Similarly Macquarie has been busy changing ratings elsewhere among resource plays, with Paladin ((PDN)), Western Areas ((WSA)) and Whitehaven Coal ((WHC)) also upgraded post the review. Paladin is lifted to a Neutral recommendation, while both Western Areas and Whitehaven have been upgraded to Outperform from Neutral.

Macquarie also made a change among industrial stocks by upgrading Woolworths ((WOW)) to Buy from Neutral, this as the broker sees potential upside now the company is putting together a solid strategy to deal with increased competition from the Wesfarmers ((WES)) owned Coles. Along with the upgrade Macquarie lifted its price target for Woolworths.

For JP Morgan, GPT ((GPT)) is now worthy of a Buy rating following relative underperformance against the REIT sector of late and given potential from the unlisted wholesale funds market. Some changes to earnings estimates mean an increase in price target.

Primary Health Care ((PRY)) is well placed to enjoy some margin recovery given improved market dynamics in the view of BA Merrill Lynch, and with the stock offering value at current levels the broker has upgraded to a Buy from Neutral previously. Price target has been lifted slightly.

On the downgrades side Toll Holdings ((TOL)) caught most attention, both UBS and Deutsche Bank lowering ratings to Hold from Buy following updated profit guidance from the company. Tough market conditions mean greater earnings volatility and UBS in particular doesn't see this as likely to attract investors at present. The revision to guidance saw brokers across the market adjust earnings estimates and price targets for Toll.

A below expectations quarterly from Alacer Gold ((AQG)) saw BA-ML lower earnings estimates and cut its price target, while the broker also downgraded to a Neutral rating from Buy previously given some uncertainty with respect to future capital allocation decisions.

Valuation was behind Macquarie downgrading both Cabcharge ((CAB)) and Coca-Cola Amatil ((CCL)) to Neutral ratings from Outperform previously, while earnings estimates for the latter were trimmed post a trading update.

Macquarie also downgraded Charter Hall Retail ((CQR)) to Sell from Buy on a similar valuation basis as the stock is now trading above the broker's price target, while Dexus (DXS)) was another property play to be downgraded by the broker on valuation grounds following recent gains. Macquarie has moved to a Neutral rating on Dexus from Buy.

Recent share price moves were also behind UBS's decision to downgrade Hastings Diversified ((HDF)) to Neutral from Buy, while Credit Suisse has made the same change for Industrea ((IDL)) as the share price has responded to a proposed takeover offer from GE of the US.

A lack of earnings certainty with respect to Pacific Brands ((PBG)) has prompted Credit Suisse to downgrade the stock to Hold from Buy, a change reinforced by management cutting off potential M&A talks.

Sonic Health Care ((SHL)) has acquired some additional pathology assets and the deal itself is a positive in the view of Credit Suisse, but again valuation has driven a downgrade to a Neutral rating from Buy previously. It is a similar story with SP Ausnet ((SPN)), Credit Suisse happy enough with the recent full year earnings result and capital raising but downgrading its rating to reflect recent share price gains.

Given Incitec Pivot ((IPL)) is more exposed to soft explosives demand at present and following a somewhat lower quality profit result JP Morgan has downgraded to a Sell rating from Neutral previously, while others to cover the stock have generally trimmed earnings forecasts and price targets.

Over the week the most significant increase in price target was enjoyed by Cabcharge, while the largest cuts were for Toll, Alacer, CSR and Lynas Corporation ((LYC)). Centro Retail has seen earnings forecasts increased the most, while CSR, Toll Holdings and Australian Infrastructure ((AIX)) have experienced the most significant reductions in earnings estimates across the market.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup Suisse,Deutsche<br>Bank,JP<br>Morgan,Macquarie,RBS<br>Australia,UBS&b0=118,99,109,102,79,140,151,122&h0=76,107,89,118,97,86,138,116&s0=41,22,25,6,32,32,11,15" style="border-bottom: #000000 1px solid; border-left: #000000 1px solid; border-top: #000000 1px solid; border-right: #000000 1px solid" />

Broker Rating

Order	Company	Old Rating	New Rating	Broker
Upgrade
1	Campbell Brothers Limited	Neutral	Buy	RBS Australia
2	GLOUCESTER COAL LTD	Sell	Neutral	Macquarie
3	GPT	Neutral	Buy	JP Morgan
4	PALADIN ENERGY LTD	Sell	Neutral	Macquarie
5	PRIMARY HEALTH CARE LIMITED	Neutral	Buy	BA-Merrill Lynch
6	WESTERN AREAS NL	Neutral	Buy	Macquarie
7	WHITEHAVEN COAL LIMITED	Neutral	Buy	Macquarie
8	WOOLWORTHS LIMITED	Neutral	Buy	Macquarie
Downgrade
9	ALACER GOLD CORP	Buy	Neutral	BA-Merrill Lynch
10	CABCHARGE AUSTRALIA LIMITED	Buy	Neutral	Macquarie
11	CHARTER HALL RETAIL REIT	Buy	Sell	Macquarie
12	COCA-COLA AMATIL LIMITED	Buy	Neutral	Macquarie
13	CSR LIMITED	Buy	Neutral	UBS
14	DEXUS PROPERTY GROUP	Buy	Neutral	Macquarie
15	HASTINGS DIVERSIFIED UTILITIES FUND	Buy	Neutral	UBS
16	INCITEC PIVOT LIMITED	Neutral	Sell	JP Morgan
17	INDUSTREA LIMITED	Buy	Neutral	Credit Suisse
18	PACIFIC BRANDS LIMITED	Buy	Neutral	Credit Suisse
19	SONIC HEALTHCARE LIMITED	Buy	Neutral	Credit Suisse
20	SP AUSNET	Neutral	Sell	Credit Suisse
21	TOLL HOLDINGS LIMITED	Buy	Neutral	UBS
22	TOLL HOLDINGS LIMITED	Buy	Neutral	Deutsche Bank

Recommendation

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	CRF	17.0%	50.0%	33.0%	6
2	WHC	83.0%	100.0%	17.0%	7
3	WSA	33.0%	50.0%	17.0%	6
4	CQO	- 40.0%	- 25.0%	15.0%	4
5	GPT	14.0%	29.0%	15.0%	7
6	PDN	29.0%	43.0%	14.0%	7
7	PRY	38.0%	50.0%	12.0%	8
8	MGX	13.0%	25.0%	12.0%	8
9	WOW	38.0%	50.0%	12.0%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	CQR	17.0%	- 17.0%	- 34.0%	6
2	TOL	43.0%	14.0%	- 29.0%	7
3	NWS	57.0%	29.0%	- 28.0%	7
4	HDF	75.0%	50.0%	- 25.0%	4
5	CAB	60.0%	40.0%	- 20.0%	5
6	LYC	100.0%	80.0%	- 20.0%	5
7	AQG	86.0%	71.0%	- 15.0%	7
8	DXS	29.0%	14.0%	- 15.0%	7
9	IPL	63.0%	50.0%	- 13.0%	8
10	CCL	38.0%	25.0%	- 13.0%	8

Target Price

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	CAB	6.000	6.532	8.87%	5
2	SPN	1.003	1.030	2.69%	8
3	CRF	1.958	2.005	2.40%	6
4	SHL	13.324	13.559	1.76%	8
5	NWS	22.407	22.750	1.53%	7
6	CCL	12.911	13.100	1.46%	8
7	WOW	27.129	27.450	1.18%	8
8	WSA	5.858	5.908	0.85%	6
9	WHC	6.342	6.393	0.80%	7
10	GPT	3.353	3.364	0.33%	7

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	CSR	2.279	1.983	- 12.99%	8
2	TOL	5.766	5.087	- 11.78%	7
3	AQG	10.196	9.067	- 11.07%	7
4	LYC	1.933	1.740	- 9.98%	5
5	PDN	2.084	1.956	- 6.14%	7
6	NAB	26.314	26.103	- 0.80%	8
7	CQO	3.502	3.478	- 0.69%	4
8	IPL	3.530	3.519	- 0.31%	8
9	CQR	3.313	3.310	- 0.09%	6

Earning Forecast

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	CRF	8.850	10.367	17.14%	6
2	TWE	19.271	19.986	3.71%	7
3	AMP	31.463	32.225	2.42%	8
4	NWS	131.424	133.151	1.31%	7
5	MIO	22.575	22.833	1.14%	4
6	CWN	57.363	57.900	0.94%	8
7	WPL	252.592	254.595	0.79%	8
8	CQO	24.667	24.860	0.78%	4
9	CPA	7.514	7.557	0.57%	7
10	BHP	323.398	325.065	0.52%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	CSR	17.488	14.775	- 15.51%	8
2	TOL	42.388	38.438	- 9.32%	7
3	AIX	18.467	16.933	- 8.31%	6
4	SUN	67.425	63.975	- 5.12%	8
5	WHC	7.267	6.914	- 4.86%	7
6	AQG	66.642	64.050	- 3.89%	7
7	IPL	27.275	26.456	- 3.00%	8
8	SWM	35.525	34.513	- 2.85%	8
9	PBG	7.688	7.475	- 2.77%	7
10	ILU	208.063	203.525	- 2.18%	8

Technical limitations

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Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided.

The Short Report

By Chris Shaw

For the week from May 1, cuts in short positions outweighed increases in shorts by around double based on a one percentage point cut-off measure. The largest change for the week was in Whitehaven Coal ((WHC)), where shorts fell to 1.72% from 5.61% the week before.

The change came post a quarterly production report that resulted in some cuts to earnings estimates in the market but prior to the company announcing a $1.00 per share bid for Coalworks ((CWK)). Success in the acquisition would offer potential for synergies at the Vickery project.

APA ((APA)) saw short positions fall to 1.44% from 3.8% the week before, this as the market continues to factor in a potential acquisition of Hastings Diversified Utilities ((HDF)). While the ACCC has raised some concerns with respect to the proposed acquisition, APA has responded with some revised undertakings that Credit Suisse suggests increases the likelihood the proposal receives regulatory approval.

Shorts in SingTel ((SGT)) declined to 3.97% from 5.89% in the week from May 1 as the market adjusted positions leading into the full year result, which largely met broker expectations. Paladin Energy ((PDN)) also saw a decline in shorts of more than one percentage point to 7.12%, this post the announcement of a convertible bond issue that brokers viewed as reducing refinancing risks for the company.

Beach Energy ((BPT)) delivered a better than expected March quarter production report and early shale fraccing is showing some promise, the report being followed by shorts in the stock declining for the week to 2.16% from 3.22%.

In terms of increases in short positions for the week from May 1, the largest was in David Jones ((DJS)) where total shorts rose to 10.83% from 8.88%. The change came as the stock continues to underperform, down almost 40% over the past year. The increase in shorts came before the announcement of some head office changes that should deliver some cost savings going forward.

The lift in short positions for David Jones confirms the company's place among the top-20 short positions on the Australian market. This list continues to be dominated by consumer discretionary stocks as the top 20 includes the likes of JB Hi-Fi ((JBH)), Myer ((MYR)), Billabong ((BBG)), Carsales.com ((CRZ)), Flight Centre ((FLT)) and Harvey Norman ((HVN)).

Also in the top 20 are media plays Fairfax ((FXJ)) and Ten Network ((TEN)), resource stocks Paladin and Iluka ((ILU)) and industrials such as CSR ((CSR)) and Gunns ((GNS)).

In terms of monthly changes from April 5, the largest increase is in Spark Infrastructure ((SKI)), positions rising to 6.29% from 1.43% previously. The market remains unconvinced of the benefits of the proposed acquisition of the Sydney Water Desalination plant, as while the deal would be earnings accretive management have little experience in the business.

The other largest monthly increase was in Paladin, where shorts rose to 7.12% from 3.92%. The increase comes after the company completed a convertible note issue to alleviate some refinancing risks but doesn't address some operational issues the company is dealing with.

Largest declines in shorts for the month from April 5 were in Beach Energy and Carsales.com. While the move to acquire a stake in Torpedo7 in New Zealand raised some questions about strategy for Carsales.com, brokers continue to expect solid growth in online display ads.

Among other changes in short positions, RBS Australia notes shorts in Leighton Holdings ((LEI)) have risen to 3.1% from 2.3% prior to the company releasing revised earnings guidance. A major issue for the company in the view of RBS is the group's capital position as there remains risk with respect to the need for further cash requirements.

RBS suggests Leighton will continue to underperform both its peers and the market and the broker recommends reducing exposure to the group.

Top 20 Largest Short Positions

Rank	Symbol	Short Position	Total Product	%Short
1	JBH	22332469	98850643	22.60
2	ISO	733044	5703165	12.85
3	MYR	67399279	583384551	11.56
4	FXJ	271035010	2351955725	11.55
5	DJS	56939484	524940325	10.83
6	COH	6118023	56929432	10.73
7	FLT	10009250	100031742	9.99
8	LYC	164111757	1714496913	9.58
9	CRZ	21143568	233684223	9.03
10	BBG	22990501	257888239	8.91
11	EGP	59491110	688019737	8.64
12	HVN	85880186	1062316784	8.07
13	ILU	32518188	418700517	7.75
14	GNS	61449507	848401559	7.23
15	PDN	59608465	835645290	7.12
16	CSR	33703822	506000315	6.64
17	SKI	83340340	1326734264	6.29
18	WTF	13114831	211736244	6.19
19	TEN	64363201	1045236720	6.16
20	TRS	1578168	26071170	6.07

To see the full Short Report, please go to this link

IMPORTANT INFORMATION ABOUT THIS REPORT

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided.

Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

By Chris Shaw

The past week has been a busy period for changes in broker ratings as the eight brokers in the FNArena database have upgraded recommendations on 12 stocks while downgrading a further 14. This means the trend of more downgrades than upgrades continues. Total Buy ratings now stand at 50.59%.

The only stock receiving multiple upgrades was Energy Resources of Australia ((ERA)), where both BA Merrill Lynch and UBS have moved to Buy ratings from Sell previously. The rating upgrades reflect a more positive view post an update by the company on the progress of operations at Ranger.

BA-ML has also upgraded Alacer Gold ((AQG)) to Buy from Sell, reflecting the broker's view the market is at present too concerned about the group's Australian assets, to the point value is emerging at current levels.

Interim earnings from Australian Pharmaceutical ((API)) were good enough for Macquarie to lift earnings estimates and its price target, the latter change enough to justify an upgrade to a Buy rating from Neutral previously. Across the market earnings estimates and price targets were adjusted post the result.

Following a strategy update by the bank UBS has upgraded Commonwealth Bank ((CBA)) to Buy from Neutral, as the broker sees strategy execution delivering relative outperformance. UBS has also lifted its price target post the update.

UBS similarly upgraded CSL ((CSL)) to Buy from Neutral on news Baxter faces delays with its HyQ product that should provide something of an earnings boost to CSL. Other brokers covering the stock have revised earnings expectations and price targets on the news.

News Fleetwood ((FWD)) will build an accommodation village in Gladstone was enough for RBS to upgrade to a Buy rating from Hold previously, as the expectation is this will deliver an earnings boost from FY14.

Credit Suisse sees value in Perseus ((PRU)) post a solid quarterly production report where output was solid and costs fell, while increases to earnings estimates for Tatt's ((TTS)) from higher win rates on fixed odd bets are enough for the broker to move to a Neutral rating from Sell previously.

While not changing its earnings forecasts Macquarie has upgraded UGL ((UGL)) to Buy from Neutral, the broker suggesting ongoing contract wins and the continued integration of DTZ will act as catalysts for the stock in coming months.

On the downgrades side, UBS has cut its rating on AMP ((AMP)) to Neutral from Buy on valuation grounds post a review of its model, while JP Morgan has similarly downgraded Aristocrat Leisure ((ALL)) on the back of recent share price strength.

For the same reason RBS has downgraded Automotive Holdings ((AHE)) to Hold from Buy, while Credit Suisse has similarly downgraded Caltex ((CTX)) to Neutral from Buy given recent share price strength.

Centro Retail ((CRF)) has been downgraded to Neutral from Overweight by JP Morgan on news the company is to sell some of its assets, as while the group's balance sheet will be strengthened overall asset quality will be reduced, in the view of JP Morgan.

BA-ML suggests it is getting tougher for Newcrest ((NCM)) to achieve production guidance this year and this implies consensus earnings estimates are too high. For the broker this is enough reason to downgrade to Neutral from Buy. Newcrest will release its March quarter production report in the week ahead.

While domestic market conditions are supportive, conditions for Nufarm ((NUF)) in other markets are more difficult and this has prompted Citi to downgrade its rating to Sell from Neutral, while Spark Infrastructure's ((SKI)) proposed expansion away from electricity via (an attempt to) taking a stake in the Sydney desalination plant is not a great move in the view of Macquarie. The broker downgrades to Neutral from Buy.

The most downgrades were applied to Westfield Group (WDC)) as UBS, Credit Suisse and Deutsche Bank have all lowered ratings to Neutral from Buy. Westfield has announced plans to sell non-core assets and this news has been well received, but valuation has been the key driver behind the cuts in ratings.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup

Broker Rating

Order	Company	Old Rating	New Rating	Broker
Upgrade
1	ALACER GOLD CORP	Sell	Buy	BA-Merrill Lynch
2	AUSTRALIAN PHARMACEUTICAL INDUSTRIES	Neutral	Buy	Macquarie
3	COMMONWEALTH BANK OF AUSTRALIA	Neutral	Buy	UBS
4	CSL LIMITED	Neutral	Buy	UBS
5	ENERGY RESOURCES OF AUSTRALIA	Sell	Buy	BA-Merrill Lynch
6	ENERGY RESOURCES OF AUSTRALIA	Sell	Buy	UBS
7	FLEETWOOD CORPORATION LIMITED	Neutral	Buy	RBS Australia
8	PERSEUS MINING LIMITED	Neutral	Buy	Credit Suisse
9	ST BARBARA LIMITED	Sell	Neutral	Macquarie
10	TATTS GROUP LIMITED	Sell	Neutral	Credit Suisse
11	UGL LIMITED	Neutral	Buy	Macquarie
12	WOODSIDE PETROLEUM LIMITED	Neutral	Buy	Credit Suisse
Downgrade
13	AMP LIMITED	Buy	Neutral	UBS
14	ARISTOCRAT LEISURE LIMITED	Buy	Neutral	JP Morgan
15	AUTOMOTIVE HOLDINGS GROUP LIMITED	Buy	Neutral	RBS Australia
16	BANK OF QUEENSLAND LIMITED	Sell	Sell	Macquarie
17	CALTEX AUSTRALIA LIMITED	Buy	Neutral	Credit Suisse
18	CENTRO RETAIL AUSTRALIA	Neutral	Neutral	JP Morgan
19	COMMONWEALTH BANK OF AUSTRALIA	Sell	Sell	Macquarie
20	NEWCREST MINING LIMITED	Buy	Neutral	BA-Merrill Lynch
21	NUFARM LIMITED	Neutral	Sell	Citi
22	PALADIN ENERGY LTD	Sell	Sell	Macquarie
23	SPARK INFRASTRUCTURE GROUP	Buy	Neutral	Macquarie
24	WESTFIELD GROUP	Buy	Neutral	UBS
25	WESTFIELD GROUP	Buy	Neutral	Credit Suisse
26	WESTFIELD GROUP	Buy	Neutral	Deutsche Bank

Recommendation

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	ERA	- 63.0%	- 13.0%	50.0%	8
2	SBM	- 67.0%	- 33.0%	34.0%	3
3	AQG	57.0%	86.0%	29.0%	7
4	PRU	20.0%	40.0%	20.0%	5
5	FWD	20.0%	40.0%	20.0%	5
6	WPL	25.0%	38.0%	13.0%	8
7	DJS	- 63.0%	- 50.0%	13.0%	8
8	CBA	- 25.0%	- 13.0%	12.0%	8
9	PNA	63.0%	75.0%	12.0%	8
10	CSL	63.0%	75.0%	12.0%	8

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Rating	New Rating	Change	Recs
1	SVW	75.0%	50.0%	- 25.0%	4
2	AHE	75.0%	50.0%	- 25.0%	4
3	CTX	33.0%	17.0%	- 16.0%	6
4	EGP	63.0%	50.0%	- 13.0%	8
5	AMP	63.0%	50.0%	- 13.0%	8
6	NCM	75.0%	63.0%	- 12.0%	8

Target Price

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	ERA	1.394	1.580	13.34%	8
2	CSL	36.273	37.758	4.09%	8
3	SBM	2.197	2.267	3.19%	3
4	SVW	10.925	11.235	2.84%	4
5	AQG	10.219	10.504	2.79%	7
6	AHE	2.655	2.710	2.07%	4
7	VAH	0.473	0.476	0.63%	7
8	EGP	4.498	4.523	0.56%	8
9	CBA	51.030	51.301	0.53%	8
10	FWD	13.512	13.546	0.25%	5

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous Target	New Target	Change	Recs
1	PRU	3.414	3.304	- 3.22%	5
2	NCM	40.003	38.753	- 3.12%	8
3	PNA	4.095	3.980	- 2.81%	8
4	AMP	4.834	4.771	- 1.30%	8

Earning Forecast

Positive Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	MCR	1.100	2.967	169.73%	3
2	TCL	13.443	14.386	7.01%	7
3	WPL	225.310	238.645	5.92%	8
4	STO	67.488	71.288	5.63%	8
5	IAG	24.075	25.100	4.26%	8
6	TAP	3.100	3.200	3.23%	4
7	API	4.114	4.214	2.43%	5
8	PNA	34.769	35.316	1.57%	8
9	CGF	46.329	47.014	1.48%	7
10	SBM	35.800	36.300	1.40%	3

Negative Change Covered by > 2 Brokers

Order	Symbol	Previous EF	New EF	Change	Recs
1	GBG	0.800	- 0.943	- 217.88%	6
2	BOQ	28.938	15.663	- 45.87%	8
3	BCI	48.767	41.100	- 15.72%	3
4	CRF	10.383	8.850	- 14.76%	6
5	WHC	14.383	12.467	- 13.32%	6
6	GRR	10.900	9.467	- 13.15%	6
7	SVW	87.780	79.960	- 8.91%	4
8	PRU	15.940	14.533	- 8.83%	5
9	ILU	241.900	224.113	- 7.35%	8
10	VAH	3.033	2.857	- 5.80%	7

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" - Warning this story contains unashamedly positive feedback on the service provided.