In the good books
Ardent Leisure Group (AAD) was upgraded to Buy from Sell by Citi B/H/S - 2/3/2. Having stuck with a Sell rating for the past 12 months, Citi has now double-whammy upgraded to Buy. The immediate trigger that led to the change in view, was improving operating momentum for both Main Event and Theme Parks. In addition, point out the analysts, US tax cuts should also add to bottom line improvement. Target price jumps to $2.40 from $1.50. H1 core net profits are anticipated to come out as a loss of -$2.2 million.
Aurizon Holdings (AZJ) was upgraded to Neutral from Underperform by Credit Suisse B/H/S – 1/4/2. Credit Suisse upgrades because of the weakness in the share price since the announcement of the QCA draft UT5 decision. Target is raised to $4.75 from $4.70. In the coal segment, the broker forecasts FY18 earnings to increase by 12% because of several Pacific National coal haulage contracts being up for renewal and the recent rebounding coal prices. Nevertheless, FY18 EBIT estimates are lowered by 3% because of a one-off impact to coal segment margins from the timing of revenue related to the cyclone in FY17.