FN Arena Broker Call Headlines - 29 Mar 2012

Reported by FN Arena
Thursday, March 29, 2012

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- TREASURY WINE ESTATES LIMITED

Citi rates as Sell, High Risk (5) - Citi remains of the view the stock is expensive given a competitive industry and some adverse structural issues in the global wine market.

Post some cuts to earnings estimates through FY13 the broker retains a Sell rating.

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- QANTAS AIRWAYS LIMITED

BA-Merrill Lynch rates as Buy, Medium Risk (1) - Target $2.00 (was $1.92). On BA-ML's estimates there is scope for tas to achieve $300m in cost outs by FY14, which could drive up return on equity for the group.

While fuel remains the biggest risk to earnings the broker sees enough value to retain a Buy rating.

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- SONIC HEALTHCARE LIMITED

BA-Merrill Lynch rates as Buy, Medium Risk (1) - While Sonic is trading on an earnings multiple premium of 6% at current levels and in the view of BA-ML this is not a high enough premium even allowing for regulatory risks to earnings.

A 15% premium is justified in the broker's view, meaning no change in Buy rating. Earnings estimates and price target are unchanged. 

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- REGIS RESOURCES LIMITED

Citi rates as Buy (1) - Target $4.75 (was $4.25). A site visit increases the broker's confidence Range can hit a production level of more than 400kozpa by 2014 and to reflect this earnings estimates have been adjusted.

Price target also increases and the broker retains a Buy rating.

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- MICLYN EXPRESS OFFSHORE LIMITED

Citi rates as Buy (1) - Target $2.50 (was $2.45). Some small contract wins have caused Citi to adjust earnings estimates and price target for Miclyn.

On valuation grounds Citi retains a Buy rating.

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- ILUKA RESOURCES LIMITED

Macquarie rates as Outperform (1) - Macquarie notes Chinese property sales rose in March and this is seen as a positive for zircon demand. There have also been some positive signs in the rutile market according to the broker.

With no changes in forecasts the broker retains an Outperform rating.

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- FORGE GROUP LIMITED

Citi rates as Downgrade to Neutral from Buy (3) - Target $7.25 (was $6.75). A new contract with Fortescue ((FMG)) sees Citi adjust earnings estimates and price target.

With the stock up almost 40% year-to-date the broker downgrades to a Neutral rating on valuation grounds.

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- NAVITAS LIMITED

UBS rates as Buy (1) - Navitas' first semester uni enrolments were down 4.2% on the previous first semester but the broker had forecast a 7.1% decline, so was pleased. Strength came from a 52% increase in North American enrolments, continued double-digit growth in Asia/Africa and a lesser decline locally.

Slight earnings top ups follow, while rating and target retained.

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17/04/2014 09:01Sydney, Australia. 17 April,2014
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