In the good books
BEACH ENERGY LIMITED (BPT) Upgrade to Buy from Neutral by Citi B/H/S: 4/2/1 Given the recent underperforming share price, Citi is upgrading to Buy/High Risk from Neutral/High Risk. The broker considers the growth portfolio uninspiring at current oil prices but the base valuation represents a 31% premium to the current share price.
CEO uncertainty, and asset sales and cost cutting offset by impairments and a conservative growth profile, means the broker finds the outlook mixed in the short term. Still, Citi believes there is potential for creating value. Citi retains a 77c target.
FORTESCUE METALS GROUP LTD (FMG) Upgrade to Buy from Neutral by UBS B/H/S: 3/3/2 September quarter shipments of 41.9m tonnes at a realised price of US$50/dmt with debt declining signals an improved operating performance and UBS upgrades to Buy from Neutral. Fortescue Metals continues to surprise on cost performance and UBS expects the company can continue to de-leverage. Hence the market is expected to ascribe more value to the equity. Target is raised to $2.85 from $2.30.