All in all, activity from stockbroking analysts remains fairly subdued amidst low volatility and low volumes in the share market and as the investment community prepares for AGM season and financial results from most of the banks. In the background there remains a widespread feeling that many stocks are not particularly cheap, with earnings yet to announce themselves in many cases.
In the good books
Australand (ALZ) was upgraded to Overweight from Neutral by JP Morgan. Residential real estate was the best performing real estate asset class in the first half of 2013 and JP Morgan is forecasting this to continue in the second half. It therefore sees strong earnings growth in train for the developers and has upgraded Australand to Overweight from Neutral as it has the most earnings sensitivity to residential price growth.
Perseus Mining (PRU) was upgraded to Neutral from Sell by Citi. The broker has upgraded gold price forecasts and earnings across the sector and thinks things can only get better for Perseus.
Sandfire Resources (SFR) was upgraded to Outperform from Neutral by Macquarie after renegotiating payment terms on its debt obligations, which should take pressure off a tight balance sheet. The broker expects a successful ramp-up of DeGrussa and thus a significant de-risking of SFR at the operating and funding level. The broker suggests SFR looks cheap compared to peers PanAust (PNA) and OZ Minerals (OZL).