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FN Arena Broker Call Headlines - 21 Dec 2012

Reported by FN Arena
Friday, December 28, 2012
Topics in this article:
Bluescope Steel,Dexus Property,Fortescue Metals ,Macquarie,Orica,Qantas Airways,Telstra Corporation.,Carsales.Com Limited,Graincorp Limited
World's kookiest billionairesBillionaires and their eccentric and outlandish publicity stunts.

- SYDNEY AIRPORT HOLDINGS LIMITED

CIMB Securities rates as Neutral (3) - Target $3.47 (was $3.48). The broker reports that November traffic was up 6.9%, with domestic traffic up 7.0%, while international traffic increased 6.7%.

CIMB believes that with a steady stream of new capacity announcements and a good amount of existing capacity growth already on the cards, the outlook for traffic growth in FY13F remains solid. The Neutral call is maintained, with the stock more attractive on a two-to-three year time frame.

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- QANTAS AIRWAYS LIMITED

Deutsche Bank rates as Buy (1) - The broker notes the ACCC has given the thumbs up to the tas and Emirates alliance for 5 years. A few changes have been made to the initial proposal, but nothing material, says Deutsche.

The broker sees as much $193m in overall benefits to tas from the arrangement, but they're not in the forecasts yet, with the broker waiting for the final decision from the ACCC expected in March 2013. The Buy recommendation is retained.

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- ORICA LIMITED

Macquarie rates as Outperform (1) - Post the recent investor teleconference, the broker notes the company still looks set to deliver 9% EPS growth in FY13, with volumes in the last 2 months a little stronger than expected.

The broker otherwise thinks the stock remains cheap, citing a 7-10% discount to the market. Outperform call maintained.

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- TELSTRA CORPORATION LIMITED

Deutsche Bank rates as Hold (3) - The broker notes the ACCC has some issues with the proposed acquisition of broadband provider Adam Internet and has also blocked the sale Trading Post to Carsales ((CRZ)).

A substantial lessening of competition in retail fixed voice and broadband services was the Adam objection. Hold call, price target and forecasts maintained.

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- GRAINCORP LIMITED

JP Morgan rates as Overweight (1) - With the AGM being held a few months earlier than normal, the broker notes there was no sort of guidance offered, while year to date receivals are tracking 12% below the prior year. Still, with the way the Victoria crop is looking so far, the broker still holds a bit of  confidence in its FY13 receivals forecast.

With the broker continuing to see upside to the company's strategic valuation, the Overweight call is maintained.

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- BLUESCOPE STEEL LIMITED

Deutsche Bank rates as Buy (1) - The broker notes the federal government is set to apply dumping margins to HRC exported from Japan, the Republic of Korea, Malaysia and Taiwan.

Deutsche estimates the FY13 operating earnings benefit following the approval will come in around $28m, or around 27% of the broker's earnings forecast.  Buy call, price target and forecasts maintained.

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- DEXUS PROPERTY GROUP

Deutsche Bank rates as Downgrade to Hold from Buy (3) - Good news, notes the broker, as the company has finally has sold 26 of its 27 remaining US industrial assets for US$561m, a 13.5% premium to book value. Yet while the broker admits this is very good outcome, it also notes the money needs to be spent wisely to ensure earnings accretion, of which the broker sees scope for EPS to lift by around 2.0-4.5% .

However, after the 4.5% share price run on the news, the broker thinks we're at fair value for the time being, which sees a downgrade to Hold from Buy. Price target and forecasts maintained.

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- FORTESCUE METALS GROUP LTD

UBS rates as Downgrade to Neutral from Buy (3) - The stockbroker observes the share price has risen no less than 52% since September with spot iron ore bouncing 55% over the period. UBS has updated its projections and a lower price forecast for iron ore plus a stronger AUD results in lowered estimates for the company. Regardless, the price target has lifted to $5 from $4.50 previously.

The analysts comment the proposed sale of equity in Pilbara infrastructure could net more than US$4bn. As spot iron ore is now expected to fall over the weeks ahead, the rating has been pulled back to Neutral. Further out in 2013, UBS expects the price of iron ore to strengthen again.

UBS forecasts an average price for iron ore of US$116/tonne in 2013. The analysts note this is below market consensus which predicts US$126/t.

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22/10/2014 00:33Sydney, Australia. 22 October,2014
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