Banks were front and centre of broker activity this week as we move into their interim reporting season. Like Charlie, many brokers now think they are fair valued and other analysts are moving around their preferred pick amongst the big four.
In the good books
BA–Merrill Lynch has upgraded CBA to Neutral from Underperform. BA-ML is joining the experts in the local share market who've started to re-assess Australian banks following yet another period of market outperformance. The upgrade sees CBA turning into BA-ML's most preferred major bank on the back of an improved outlook for capital and returns.
Resmed has been upgraded to Buy from Hold by Deutsche Bank and to Add from Hold by CIMB Securities. Third quarter results were in line with CIMB’s expectations. Price adjustments supported volumes but CIMB notes this was at the expense of margins. Deutsche Bank believes a return to more normal pricing and demand conditions is likely after US competitive bidding mark 2, and sales growth in FY15 should also be boosted by the new product range.