Broker activity was dominated by actions on insurance and mining companies this week. Some of this was partly due to falls in the share price, which pushed stocks towards fair valuation but others – such as the Tower upgrade – were due to better than expected first half results. Regis Resources also disappointed with its FY15 guidance and scored four downgrades as a result.
In the good books
Macquarie upgraded QBE (QBE) to Neutral from Underperform. While there are plenty of issues facing QBE going forward – North American uncertainty, premium rate cycle pressure, moderating US reserve trends, macro headwinds and equity dilution drag – the broker has upgraded the stock to Neutral from Underperform as Macquarie believes the issues are now all, more than adequately, reflected in the share price.
Credit Suisse upgraded Tower (TWR) to Outperform from Neutral. The first half results were stronger than the broker expected, with higher catastrophe claims offset by higher investment income. Tower has a simpler and cleaner business now and is in a position to capitalise on growth opportunities in a consolidating market.