It should come as no surprise that stock rating downgrades continue outnumbering upgrades as the local share market has bounced swiftly and sharply from a temporary fear-driven sell off in September-October. Nor should it surprise that the negative side of the ledger carries a heavy contribution from the energy sector, given oil prices have fallen further than most investors and analysts would have expected them to.
In the good books
Computershare (CPU) was upgraded to Neutral from Sell by UBS. The company has signalled operating conditions are softer but still expects earnings to be up around 5% in FY15. UBS has been cautious about the weak organic growth profile of the core registry business amid concern that replacing revenue holes with growth and acquisitions is becoming an increasingly capital-intensive task. Valuation now reflects the softer outlook, in the broker’s opinion, and the rating is upgraded.
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