Brokers continued to look for unloved favourites to upgrade this week with AMP and Qantas getting upgrades. Disappointing announcements drove downgrades.
In the good books
Credit Suisse upgraded AMP to Outperform from Neutral. AMP continued to enjoy strong funds flows into its North platform during the September quarter, exceeding outflows in legacy platforms. But for the broker, the big news was on the insurance side where lapse experience is matching assumptions and claims experience is performing ahead of assumptions. Given it is the September quarter when AMP has typically announced a "life downgrade", the broker sees this as very positive. With AMP now trading in line with the market and below its historical PE, the broker upgrades to Outperform.
Credit Suisse upgraded JB Hi-Fi (JBH) to Outperform from Neutral. The sell off in the stock has come to a point where Credit Suisse believes it is too low. The broker expects the recent improvement in trading conditions to be maintained and the valuation is now compelling. (See downgrade.)