Buy, Sell, Hold – what the brokers say

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Key points

  • Share price falls are making some companies good value.
  • BHP was upgraded on the back of an improved Aussie/US dollar exchange rate and low debt.
  • Tabcorp was upgraded due to revenue growth.

Brokers continued to be in a positive mood this week, despite the rout in markets. Many believe the volatility is making some companies a much better value buy.

In the good books

Credit Suisse upgraded BHP to Neutral from Underperform. After visiting the company's iron ore assets, Credit Suisse upgrades to Neutral from Underperform, with an unchanged target of $38.00. Tonnage is coming at a faster rate and lower cost and a favourable AUD/USD rate provides potential upside. The broker notes net debt is set to increase to $27.3 billion by the end of FY15 and, while this is above the previous net debt target of $25 billion for shareholder returns, it is not considered high on any traditional measure.

JP Morgan upgraded CSR to Neutral from Underweight. Ahead of the ACCC decision on the proposed brick joint venture with Boral (BLD), JP Morgan expects a "qualified green light". That aside, in the light of the decline in CSR's share price as well as considerably higher aluminum forecasts, the broker upgrades to Neutral from Underweight.

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