In the good books
Fortescue Metals Group (FMG) was upgraded to Buy from Sell by Citi. B/H/S - 7/0/0. Fortescue plans to address widening discounts for lower grade ore by blending in ore from higher grade mines. Citi has increased its iron ore price forecasts and lowered its A$ forecast with the net result being a target price increase to $4.90 from $4.00. The broker is concerned that bringing new mid-grade ore onto the market to replace lower grade shipments will actually widen the discount for the former and tighten the discount for the latter, but the target price increase is sufficient to trigger a rating upgrade.
Monadelphous Group (MND) was upgraded to Hold from Sell by Deutsche Bank, with a price target of $13.30. B/H/S – 1/4/1.
In the not-so-good books
Cabcharge (CAB) Australia was downgraded Sell from Neutral by UBS. B/H/S – 0/1/1. UBS analysis suggests momentum has slowed for Uber in both app downloads and share of taxi expenditure. However, Cabcharge only recorded a minimal uplift as a result, and the majority of the benefit appears to have gone to competitors. The broker suspects the market does not fully appreciate the complexity of the earnings drivers. UBS suggests the stock is stretched and downgrades. Target is raised to $2.15 from $1.65.