In the not-so-good books
Credit Suisse has downgraded Asciano (AIO) to Underperform from Outperform. Credit Suisse suspects that to get ACCC approval of the Brookfield acquisition, there needs to be significant changes to the regulatory framework for Brookfield rail and the Dalrymple Bay coal terminal. This could change the risk/reward profile for Brookfield and require a lengthy process. Credit Suisse lowers its valuation of Asciano to a standalone basis and downgrades to Underperform from Outperform.
Citi has downgraded BHP Billiton (BHP) to Neutral from Buy. Citi analysts found BHP delivered a "solid" quarterly production report, but incorporating the latest commodity prices forecasts has once again triggered further reductions to profit estimates. This time, copper and coking coal are the main culprits, only partially offset by a mark-to-market upgrade for iron ore. Reductions in forecasts have triggered a fall in price target; $24 instead of $26. Rating has been downgraded to Neutral from Buy. On Citi's calculations further cuts to capex would need to be made "given the progressive dividend policy appears to be sacrosanct".
UBS has downgraded Mantra Group (MTR) to Neutral from Buy. The share price has appreciated 24% since the FY15 result and UBS observes, during this period, there has been continued downward pressure on the Australian dollar supporting the domestic travel market. Earnings are likely to be driven by growth in accommodation demand and new property additions to the company's portfolio. With this in mind, UBS downgrades to Neutral from Buy. Target is raised to $4.00 from $3.84.