The big financial services giant AMP (AMP) fell out of favour with brokers at the millionaires’ factory early this week, with Macquarie downgrading it from Neutral to Underperform. The broker cited the announcement by Reinsurance Group of America on expected increased costs for claims liabilities in Australia, which will have an impact on the biggest life insurer in Australia i.e. AMP. As Macquarie believes this, along with AMP’s increased claims and lapse experiences, is no longer reflected in the share price, the broker decided to downgrade.
Orica (ORI) was downgraded to Neutral from Outperform by Credit Suisse and Macquarie, and Neutral from Buy by UBS, after the company issued a revised earnings guidance late last week which flagged a 10% fall in profit compared to last year. The company cited three factors for the revised guidance, including weaker global market conditions, high optimisation costs associated with the integration of the ground support business, and issues with the Indonesian business.
Boart Longyear (BLY) was downgraded to Neutral from Outperform by Credit Suisse, after the company announced another earnings downgrade, and all that that was gold did not glitter for Kingsgate Mining (KCN) which was downgraded by Macquarie to Underperform from Neutral. After it issued a new mine plan for its South Australian Challenger mine, Macquarie now thinks that at current prices it is not cash flow positive.