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FN Arena Broker Call Headlines - 13 Dec 2012

Reported by FN Arena
Thursday, December 13, 2012
Topics in this article:
Macquarie,Roberts Limited,Crown,Worleyparsons,Toll Holdings,Gpt,Boral.,Tpg Telecom Limited,Iinet Limited,Australand Property,Whk Group Limited
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- WHK GROUP LIMITED

Macquarie rates as Outperform (1) - Management has announced yet another round of cost cutting and Macquarie analysts respond by stating all the costs savings are being offset by continues weak operational momentum. They maintain their forecast for a flat outlook, below the company's guidance.

Estimates have been lowered. Were merger talks to lead to nothing, Macquarie believes the shares will trend towards 90c. For now, $1.05 price target maintained, as well as the Outperform rating.

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- ECHO ENTERTAINMENT GROUP LIMITED

Citi rates as Neutral (3) - The broker notes the company has picked one of its non-executive directors,John Redmond, to be the new CEO. Citi says he has an impressive background as a senior executive, CFO and CEO at major US casinos.

The only problems Citi have are his limited Asian VIP exposure and the Board's general lack of gaming experience. With the competitive threat from Crown's ((CWN)) potential Barangaroo development, the Neutral call is maitnained.

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- TPG TELECOM LIMITED

CIMB Securities rates as Neutral (5) - We last heard from RBS on TPG back in September. Since then, CIMB has taken over the book and its first note on TPG carries a Neutral call and $2.62 price target (was Sell and $1.83). The broker believes the company's low-cost model has not only been been highly effective in growing the business, but notes it is also generating some really nice returns for investors.

Yet while the broker expects earnings to grow at a rate of 13% per year over the next few years and also sees a potential for even further upside, current valuation metrics seem to have this all priced in, hence the Neutral call.

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- GPT

JP Morgan rates as Overweight (1) - Target $4.03 (was $3.77). A day after 's offer for most of Australand ((ALZ)), the broker has taken a closer look at the company's earnings profile, with a revised view on 's treatment  of amortization of incentives seeing forecasts trimmed.

However, the Overweight call is maintained on the back of prospective upside from what seems to be a good looking transaction that takes much further down the track to achieving its strategic objectives.

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- WORLEYPARSONS LIMITED

UBS rates as Neutral (3) - It has been difficult to ignore, but leyParsons shares have significantly underperformed the broader share market since the company's AGM in late October. UBS analysts are quick on their feet to point out this remains a high quality services provider, it's just that right now the headwinds have been building.

The analysts have further lowered their estimates and are now, on their own observation, below consensus. leyParsons is in the midst of a sector-derating, they point out, and that explains why the share price is not moving in line with the market. Valuation/target has been cut to $24.50 from $26.

Neutral rating retained.

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- TOLL HOLDINGS LIMITED

Credit Suisse rates as Neutral (3) - Target $5.00 (was $4.80). The broker has trimmed its FY13 earnings forecast by 5% and by an average of 6% over the forecast period on still softening global trade volumes and a weaker than previously expected Australian domestic market.

The Neutral call is maintained, especially given the recent run in the share price, with a rolling forward of the broker's valuation causing the lift in the price target.

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- IINET LIMITED

CIMB Securities rates as Outperform (1) - Target $5.03 (was $3.93). The broker has done a review of its models and this sees forecasts lifted to incorporate more expected upside from NBN rollout and migration assumptions. While near term implications are relatively minor, the broker notes they grow as the NBN rollout accelerates beyond FY15.

Citing strong cash flow generation, corporate activity potential and shares trading at discount to peers, the Outperform call is maintained, with the price target pushed higher

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- BORAL LIMITED

Deutsche Bank rates as Hold (3) - Boral has followed the example of its competitors in the Australian market and now announced its own price increases for concrete and aggregates. There is a difference, explain the analysts, as Boral's increases are national in character versus only regional increases for the likes of Hanson and Holcim.

Deutsche Bank analysts don't seem enthusiastic. Instead they argue price increases in the past years did not lead to higher margins. Hold rating maintained. Price target $4.02.

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21/10/2014 19:44Sydney, Australia. 21 October,2014
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