Buy, Hold, Sell – what the brokers say

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In the good books

Bendigo and Adelaide Bank (BEN) was upgraded to Neutral from Sell by UBS B/H/S – 0/5/2.  First half results were just shy of expectations. UBS was impressed by the 10-basis points expansion in net interest margin. The bank is a price taker in most products but UBS believes its strong customer offering places it in a good position to reduce deposit costs relative to peers. Forecasts are upgraded slightly, based on the assumption the bank continues to focus on lowering funding costs. Given the fall in the share price UBS upgrades to Neutral from Sell. Target is $10.50.

Boral (BLD) was upgraded to Neutral from Sell by Citi B/H/S – 4/2/0.  Citi has passed no comment on Boral's actual result, rather concentrating on FY guidance. The broker has lifted EPS (and subsequently DPS) forecasts on the back of a reduced US tax rate, and this leads to a target increase to $7.32 from $6.94 and an upgrade to Neutral. However, Citi has left its before-tax earnings forecasts unchanged post result, and notes the underlying performance in the business featured US margins going backwards, despite a highly supportive construction environment. See downgrade.

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