Weekly broker report – Boral and Incitec Pivot upgraded

Founder of FNArena
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As production reports now comprise the bulk of the news flow in Australia, materials and resources companies wore most of the recommendation changes in the week past. FNArena recorded 15 downgrades and only eight upgrades, which pretty much reflects the price action witnessed in what was a tough week for equity investors.

In the good books

Credit Suisse upgraded APA Group (APA) to Hold from Sell now that the Moomba Adelaide Pipeline System sale process has closed and APA is in possession of an extra $423 million. The price was a bit below the broker's expectation, but good enough. A mark to market and a few other changes to the valuation model caused a lift in the target price, which gave CS enough room to upgrade the recommendation. The FNArena Database shows a neutral sentiment for the stock.

Boral (BLD) was upped to Hold from Sell thanks to CIMB, the broker having cited recent share price weakness. The broker believes Australia's residential construction cycle has likely found a floor and with the US recovery well underway, CIMB favours the company's exposure profile and significant leverage to mid-cycle underlying activity. Sentiment for Boral is positive on four Buys, two Sells and two Holds.

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