In the good books
Alumina Limited (AWC) Upgrade to Overweight from Equal-weight by Morgan Stanley B/H/S: 5/1/1/. Morgan Stanley upgrades the business to reflect the improving alumina price, which should allow for margin expansion. The further cost savings and low gearing make the broker comfortable, even if spot price do not improve as expected. Cost improvements from lower energy and caustic inputs are envisaged.
Medibank Private Limited (MPL) Upgrade to Neutral from Underperform by Credit Suisse B/H/S: 1/5/1. The health minister has approved a 2016 premium rate increase of 5.6%, well ahead of Credit Suisse expectations. This paves the way for an extended period of inflated profits for the insurers. The main risk is a consumer backlash, the broker observes, as cover downgrades are at record levels. The broker upgrades earnings forecasts and the rating as its negative thesis was based on regulation change to rein in the very high profit margins.
Monash IVF Group (MVF) Outperform from Neutral by Macquarie B/H/S: 2/1/0. Monash IVF's profit fell short of Macquarie but sales well exceeded. While there was some help from acquisitions, organic growth was nevertheless impressive, the broker suggests, and new ventures are beginning to perform.