Persistent weakness for the local share market has finally triggered a switch towards recommendation upgrades for individual ASX-listed stocks. For the week ending Friday, 14th September 2018, FNArena registered no less than twelve upgrades versus only three downgrades (see our Thursday report) with troubled department store operator Myer the sole recipient of two upgrades during the week; both to Neutral.
In the good books
ANSELL LIMITED (ANN) was upgraded to Buy from Neutral by Citi. B/H/S: 2/5/1. Citi notes the balance sheet is ungeared post the sale of the sexual wellness business and now explicitly forecasts acquisitions. Management has noted numerous acquisition opportunities and believes it has the capacity to make a transaction worth US$1-1.4 billion. The broker estimates an acquisition worth US$600 million would be accretive to earnings by around 24% in FY21. The broker continues to forecast a progressive US$600 million buyback over FY19-22. Target is raised to $28.50 from $25.50.