In the good books
SG Fleet Group (SGF) was upgraded to Buy from Neutral by Citi. B/H/S – 2/1/0. Citi has decided to upgrade on management's signals that acquisitions remain very much on the agenda. The FY18 report itself was a "beat", as already established on the day of the release. It is the analyst’s view that rather modest organic growth will be supplemented by increased penetration of clients with services offerings, apart from acquisitions. Target price loses -3% to $4.18.
REA Group was upgraded to Neutral from Underperform by Macquarie and to Add from Hold by Morgans. B/H/S – 3/3/2. FY18 earnings were in line with expectations. Macquarie has a more positive outlook for mix and depth penetration heading into FY19, to offset volume weakness. Macquarie lifts the target 4.7% to $90. Morgans believes REA remains on track to deliver 20%+ earnings growth in FY19, following the recent expansion in the number of agents subscribing to Premiere All and Highlight All packages. The notable increase offsets the impact of a -5% drop in capital city listings. REA is thus more insulated from the impact of falling house prices than market concerns would suggest. Target rises to $95.41 from $87.66.