As more companies use annual general meetings to confess on earnings guidance for the 2013 financial year, changes to broker ratings have become weighted to the downside, with the past week seeing nine stocks upgraded compared with 27 downgrades. Total Buy recommendations in the FNArena database now stand at 42.77%.
Both Dexus Property (DXS) and IOOF Holdings (IFL) received two upgrades during the week. For Dexus, news the company intends to sell its remaining US assets to reinvest in the Australian market prompted Macquarie to move to a Neutral rating and JP Morgan to go one better and lift its rating to Buy. In both cases, the asset sale is seen as a likely positive catalyst for the stock.
Both Citi and Credit Suisse upgraded IOOF to Buy following the incorporation of the recent Plan B acquisition into earnings models, which resulted in increases to earnings estimates and price target. Credit Suisse also sees value given the stock is trading below historic average multiples.