Analysts are very reluctant to lower their valuations and price targets, maybe with the exception of specific resources stocks. Another positive is that resources stocks, bulk commodity producers and explorers in particular, remain the main targets of any negative revisions to profit estimates. On the positive side we find insurers, energy companies and selected cyclicals including Incitec Pivot, Western Areas and BlueScope Steel, while Alumina Ltd continues to enjoy renewed interest and upwards momentum for aluminium.
In the good books
Atlas Iron (AGO) was upgraded to Neutral from Underperform by BA-Merrill Lynch as weak results have now been laid bare and iron ore prices have stabilised, limiting near-term downside. That said, the broker thinks material upside will continue to be limited by oversupplied iron ore markets and uncertainty regarding future growth plans. The target is raised to 60c from 50c. See also AGO downgrade.