In the good books
Caltex (CTX) was upgraded to outperform from Neutral by Credit Suisse.
While uncertainties exist, Credit Suisse believes Caltex is on an undemanding multiple and there is increasing exposure to the convenience retail segment. The broker downgrades 2018 estimates to reflect guidance on retail margins and downtime at the Lytton facility, while outer-year upgrades are spread across fuel distribution and convenience. An alliance with Woolworths ((WOW)) reduces sourcing complexity and participation in the rewards program adds to the company's market position. Credit Suisse upgrades to Outperform from Neutral and raises the target to $33.07 from $32.55. Without the distractions of contracts/M&A, better optimisation of fuels and infrastructure appears likely. The stock price at the time of writing was $26.92.