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FN Arena Broker Call Headlines - 8 Feb 2013

Reported by FN Arena
Friday, February 8, 2013
Topics in this article:
Australand Property,Crown,Csl,Mirvac,News Corporation,Telstra Corporation.,Fletcher Building Limited,Flexigroup Limited
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- MIRVAC GROUP

Credit Suisse rates as Neutral (3) - The broker notes the company has announced a $273m provision to its residential inventory. In an interesting note, the broker points out that this is the fifth impairment since 2008, with impairments over the past five years now actually a larger number than the company has booked over the last five years.

Guidance was maintained and so are the the broker's forecasts, with CS of the belief that EPS growth into FY14 remains strong, which could see the stock re-rate further. Neutral call maintained.

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- NEWS CORPORATION

Deutsche Bank rates as Buy (1) - 2Q results beat the broker on strong performances in Television and Cable, while Publishing also came in ahead due to favourable Sunday Sun comps.  However, there was some offset provided by weaker results in the Sky Italia and Film  divisions. The separation plan is also on track to be completed by Jun 2013, with a bit more financial info coming in the next month or so.

However, News did temper its FY13 operating income forecasts a little due to the weakness in the Fox network, Australian newspapers and Sky Italia. EPS forecasts are unchanged and the Buy call is maintained, with the broker citing the fastest long term growth prospects among the majors, a big ongoing buyback and the valuation upside offered by the split.

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- FLETCHER BUILDING LIMITED

CIMB Securities rates as Outperform (1) - Target NZ$9.49 (was NZ$8.82 ). Having reviewed cost-out initiatives CIMB has found further upside for earnings. Fletcher remains the brokers preferred building materials pick. The Outperform rating is retained.

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- TELSTRA CORPORATION LIMITED

UBS rates as Neutral (3) - Telstra's first half was up 10%, about 5% below UBS estimates. UBS finds Telstra attractive against the broader market, although upside is limited now with 4G, cost cut and operating momentum factored in. Mobile remains the key driver.

A Neutral rating is retained and the price target is steady at $4.

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- FLEXIGROUP LIMITED

Deutsche Bank rates as Buy (1) - Target $4.40 (was $3.70). The broker thought it was another strong showing, with the emerging areas of the business performing especially well and setting up a solid platform for future earnings growth over the mid-term. Cost out work is also positive, with benefits to come through in FY14.

There are some minor adjustments to forecasts, with the price target lifted on valuation  adjustments and the Buy call otherwise maintained.

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- AUSTRALAND PROPERTY GROUP

Deutsche Bank rates as Downgrade to Hold from Buy (3) - The broker thought the FY12 result was solid, beating both Deutsche and the market. However, the result also fell well short of the rest of the broker's A-REIT coverage universe, while the lack of an update on corporate activity and hints of impairments has the broker concerned the stock will remain the ugly girl at the M&A ball.

4Q was a little different, with the company beating the sector by 13%. However, this isn't enough to justify Buy call, especially given shares are now trading in-line with the broker's target. Downgrade to Hold from Buy.

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- CSL LIMITED

JP Morgan rates as Overweight (1) - Ahead of the results JP Morgan has updated currency estimates and rolled forward the price target. The broker remains comfortable with the Overweight recommendation.

The price target is raised to $53.28 from $49.11.

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- CROWN LIMITED

Citi rates as Buy (1) - MPEL's underlying profit result was in-line with the broker and would have come in ahead if not for US$16 million in one-off expenses related to the Philippines. Still, top line profit did beat consensus by 6%. The broker notes mass market revenue continued to outstrip VIP, which is good, as it should help drive strong margin improvement, says Citi.

Given the broker is at Strong Buy, mostly because of the MPEL holding, the latest result, if anything, makes the Buy even stronger. The price target and forecasts are maintained.

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27/08/2014 18:50Sydney, Australia. 27 August,2014
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