Weekly Recommendation, Target Price, Earnings Forecast Changes

This story features BANK OF QUEENSLAND LIMITED, and other companies. For more info SHARE ANALYSIS: BOQ

By Rudi Filapek-Vandyck, Editor FNArena

Guide:

The FNArena database tabulates the views of eight major Australian and international stock brokers: BA-Merrill Lynch, CIMB, Citi, Credit Suisse, Deutsche Bank, JP Morgan, Macquarie and UBS.

For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.

Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.

Summary

Period: Monday August 25 to Friday August 29, 2014
Total Upgrades: 22
Total Downgrades: 33
Net Ratings Breakdown: Buy 37.81%; Hold 44.06%; Sell 18.13%

Last week marked the final episode in the local reporting season. While the picture remains skewed to the negative for stockbroker ratings, the undercurrent looks decisively more positive when we focus on valuations/price targets and earnings estimates.

FNArena registered 22 rating upgrades for the week ending August 29, outnumbered by 33 downgrades.

Companies attracting attention on the positive side include Cabcharge, M2 Telecom and Whitehaven Coal (ok, we might as well include Qantas as well) while on the negative side we find Breville Group, Seven West Media and Seven Group and a handful of second tier iron ore mining companies, including those embedded in iron ore.

As one would expect, the skew towards more downgrades is inspired by elevated share prices.

Upgrades

Bank of Queensland ((BOQ)) upgraded to Buy from Neutral by Citi. B/H/S: 1/5/1

The financial system inquiry raises the prospects of better returns from the regional banks. Citi upgrades BOQ to Buy from Neutral and the target to $14.00 from $11.50. The broker believes, for the first time since the GFC, long-term returns for the regionals are at, or just below, the cost of capital.

Beach Energy ((BPT)) upgraded to Neutral from Sell by Citi. B/H/S: 0/4/2

Citi has upgraded Beach Energy to Neutral from Sell. The company's FY14 results were in line with the broker's estimates. FY15 forecast has been moved forward 5.2% while FY16 forecasts remain unchanged. The broker notes that current capex levels appear high, but are inflated by the one-off Cooper infrastructure expansion program. The price target is lifted to $1.78 from $1.69.

See also BPT downgrade.

BlueScope Steel ((BSL)) upgraded to Outperform from Neutral by Credit Suisse. B/H/S: 6/0/2

FY14 proved in-line but guidance for FY15 was some 20% below consensus, observe analysts at Credit Suisse. They have cut estimates, but left their $6.40 target unchanged. Given a negative response to the company's guidance, this now leads to an upgrade in rating, to Outperform from Neutral.

See also BSL downgrade.

Cabcharge Australia ((CAB)) upgraded to Neutral from Underperform by Macquarie. B/H/S: 1/2/2

Cabcharge's result beat the broker but the 10c dividend fell short of the broker's 13c forecast. CAB noted turnover in Victoria had increased some 30% since the surcharge was halved by the government but the revenue loss more than offset. This is not as bad an outcome as the broker had feared, but if NSW-WA follow suit the broker does not expect similar market share gains. CAB still faces structural headwinds but has improved as a valuation proposition, the broker suggests. A shift in valuation model to PE from sum of the parts prompts a target increase to $5.48 from $3.50. Upgrade to Neutral.

Evolution Mining ((EVN)) upgraded to Outperform from Neutral by Macquarie. B/H/S: 2/3/0

Headline earnings were in line but cash flow fell slightly short and left debt a little higher than anticipated. FY15 looks comfortable nonetheless and EVN should generate enough cash flow to fund its capital commitments, exploration program and dividend, the broker believes. With EVN offering excellent leverage to the AUD gold price the broker upgrades to Outperform. Target rises to 90c from 85c.

Federation Centres ((FDC)) upgraded to Buy from Neutral by UBS. B/H/S: 3/1/3

Federation Centres' result beat the broker on earnings, distribution and FY15 guidance. The broker had flagged upside on cost cuts and further syndicate acquisitions. Supermarket sales were the only disappointment in an otherwise solid result all round, but the broker expects improvement ahead. On that basis, the broker has increased its target to $2.75 from $2.52 and upgraded to Buy.

See also FDC downgrade.

Flight Centre ((FLT)) upgraded to Overweight from Neutral by JP Morgan. B/H/S: 6/1/0

Flight Centre's FY14 results were in line with the broker's expectations. JP Morgan has upgraded the stock to Overweight from Neutral, citing the conservative guidance provided by the company and the upside presented by a revised price target, which has been raised to $52.60 from $51.00.

Helloworld ((HLO)) upgraded to Neutral from Underweight by JP Morgan. B/H/S: 0/2/0

Helloworld's FY14 results were in line with JP Morgan's forecast. The company has announced an on market share buy-back of up to 2.5% of share capital. The broker has upgraded the stock to Neutral from Underweight following the announcement, and believes the completion of the rebranding will now lead to earnings growth. The price target is raised to 28c from 24c.

IOOF Holdings ((IFL)) upgraded to Buy from Neutral by UBS. B/H/S: 3/3/1

IOOF's result beat the broker on lower operating expenses and tax. Organic momentum is building and given IFL's track record of delivery, synergies from the SFG acquisition should help support the broker's forecast two-year compound growth forecast of 12%. IFL has underinvested in growth over the years but is a more defensive proposition than pure-play fund managers, the broker suggests, and offers double the earnings growth of AMP ((AMP)). Target rises to $9.70 from $8.70, upgrade to Buy.

M2 Telecommunications ((MTU)) upgraded to Hold from Reduce by CIMB Securities. B/H/S: 2/2/0

Earnings were ahead of the broker's forecasts for FY14. CIMB observes the company has demonstrated the value in its organic business model and, on an upgraded outlook, further good growth is still expected in FY15. The stock justifies a higher market valuation now and CIMB upgrades the rating to Hold from Reduce and the target to $7.00 from $5.42.

Macquarie Atlas Roads ((MQA)) upgraded to Add from Hold by CIMB Securities and to Overweight from Neutral by JP Morgan. B/H/S: 4/2/0

Interim performance was strong, in line, and yet more evidence that management can deliver on its targets, suggest analysts at CIMB. They remind investors this company should benefit from any economic stimulus program in Europe plus a refinancing of APRR/Eiffarie debt should be within reach and deliver benefits too. All in all, CIMB makes few changes to forecasts and bumps up the target to $3.50 from $3.12. Rating upgraded to Add from Hold. First half results were largely in line while dividends increased, reflecting stronger operating cash flows, and JP Morgan observes dividends will be boosted further by any weakness in the Australian dollar. The broker has raised the target to $3.44 from $3.22 and recent weakness suggests a buying opportunity. Hence, rating is upgraded to Overweight from Neutral.

Pact Group ((PGH)) upgraded to Outperform from Neutral by Credit Suisse. B/H/S: 5/0/0

One day after the broker downgraded the share price has retraced, enabling the stock to meet Credit Suisse's rigid 15% total shareholder return threshold. So, the rating goes back up to Outperform from Neutral. Target is steady at $4.15. Pact has conceded the FY14 price increases may have sacrificed volume but still points to some underlying growth. The company also emphasised it seeks to protect margin where possible and will not chase volume and reiterated its confidence in sourcing more bolt-on acquisitions in Australia despite industry concentration.

See also PGH downgrade.

Perpetual ((PPT)) upgraded to Buy from Neutral from Citi and to Outperform from Neutral by Macquarie. B/H/S: 4/4/0

Perpetual's underlying earnings were in line, with higher remuneration, interest and D&A costs leading to a miss at the headline. FY14 underlying profit was below the broker's forecasts. Citi believes the outlook is improving at long last, with management targeting a 25-30% profit margin beyond FY15. Management has upgraded target synergies for Trust Co, with the main benefit in FY16. Citi factors the outlook into estimates and reduces FY15 forecasts by 2% but raises FY16 by 4%. Target is lifted to $51.50 from $50.00 and the rating is upgraded to Buy from Neutral. The market's weak reaction to this miss provides an opportunity, Macquarie suggests, given a strong start to FY15 funds flows, the delivery of the Trust Co acquisition and the optionality provided by execution on PPT's global equities capability. Upgrade to Outperform.

Qantas Airways ((QAN)) upgraded to Add from Hold by CIMB Securities. B/H/S: 3/4/1

It wasn't pretty but underlying Qantas' loss for FY14 was smaller than expected, comment analysts at CIMB. Of more importance is that the analysts believe operations have now stabilised and the outlook is improving. All this provides enough reason to get on board the Qantas plane, they suggest. Price target jumps to $1.84 from $1.39, implying there's still some 33% upside available, even after the rally. Rating has been upgraded to Add from Hold.

Qube Logistics ((QUB)) upgraded to Add from Hold by CIMB Securities. B/H/S: 1/6/0

Qube's FY14 results were slightly ahead of the broker's forecast. CIMB is confident that management has the ability to drive strong earnings growth into the future and therefore lifts its FY15 forecast by 15%. The broker has upgraded the stock to Add from Hold and the price target is raised to $2.73 from $2.13.

Senex Energy ((SXY)) upgraded to Buy from Neutral by Citi. B/H/S: 4/1/0

Senex reported FY14 earnings below Citi's forecast. FY15 forecast has been reduced by 26% and FY16 by 20.6%. The broker has upgraded the stock to Buy from Neutral. Citi believes a greater focus on exploration will add greater value in the long term. Price target is raised to 85c from 84c.

Seven Group ((SVW)) upgraded to Neutral from Underperform by Macquarie. B/H/S: 2/3/0

Seven Group's result was slightly ahead of the broker. It was a very tough year for WesTrac and doesn't look like getting much better, the broker suggests. Not only are miners not buying new Tonka toys, they're only fixing the ones they have when they break down, rather than paying for preventative maintenance. However, there may be signs of a bottom having been reached. It's enough for the broker to upgrade to Neutral, despite the risk of franchise dilution from the proposed Nexus ((NXS)) acquisition. Target rises to $7.68 from $7.35.

Steadfast Group ((SDF)) upgraded to Neutral from Underperform by Credit Suisse. B/H/S: 1/1/0

The FY14 report beat prospectus and CS' expectations, plus it came with an acquisition. CS analysts believe the operational picture paints more of a mixed performance, and outlook, but the Calliden ((CIX)) acquisition makes up for it. Estimates have been increased, predominantly due to the acquisition. Price target lifts to $1.66. Rating goes to Neutral from Underperform.

Veda Group ((VED)) upgraded to Buy from Neutral by Citi and to Buy from Hold by Deutsche Bank. B/H/S: 3/1/0

FY14 results were better than Citi expected and highlighted the company's ability to generate strong growth from existing businesses. The dividend was larger than expected, signalling improved cash flow. The broker increases earnings forecasts for FY15-17 by 4-5% and raises the target to $2.48 from $1.99. Rating is upgraded to Buy from Neutral. Earnings were in line with forecasts and Deutsche Bank expects the strong growth to continue, driven by penetrating new segments and product innovation. The broker believes the stock deserves its premium relative to international peers, considering its highly entrenched position in Australia. Rating is upgraded to Buy from Hold. Target is steady at $2.35.

Downgrades

Abacus Property ((ABP)) downgraded to Neutral from Buy by Citi. B/H/S: 0/2/0

FY14 results were ahead of Citi's forecasts. Despite this, the broker is downgrading the rating to Neutral from Buy as the stock is fairly priced. The company continues to find value in sub-regional and larger neighbourhood retail assets and Citi believes this has positive implications for the sector. The broker remains attracted to the style of investment, rolls forward valuation and lifts earnings forecasts. Target is raised to $2.63 from $2.54.

Air New Zealand ((AIZ)) downgraded to Underperform from Neutral by Credit Suisse. B/H/S: 2/0/1

Air NZ released a strong FY14, as expected, with the analysts commenting the surprise came in the form of a fully imputed special dividend of 10c on top of increased dividend. Guidance for the year was slightly disappointing and led to mild cuts to forecasts. CS is positive about management's cost control, strategic know-how and the outlook, but it's the valuation that has become a problem. Downgrade to Underperform from Neutral.

Beach Energy ((BPT)) downgraded to Neutral from Outperform by Credit Suisse. B/H/S: 0/4/2

Beach had pre-warned, but CS analysts had waited before updating their modeling. They have cut forecasts on a mix of changed assumptions but the key factor is that operations in the Cooper Basin require more capex than previously thought. CS is suggesting Beach might be better off spending money elsewhere and selling its stake in the JV, potentially offering it to partners Santos ((STO)) or Origin Energy ((ORG)). The lower Cooper Basin valuation is partially offset by better than-expected cash conversion and a roll-forward of the valuation model with the end result only a 10c drop in the target, to $1.80. Recommendation downgraded to Neutral from Outperform.

See also BPT upgrade.

BlueScope ((BSL)) downgraded to Underperform from Outperform by Macquarie. B/H/S: 6/0/2

Bluescope's result appeared to meet guidance but take out a tax effect and it missed the broker's forecasts. First half FY15 guidance remained very cautious, with weak domestic steel demand the primary driver. The broker has slashed forecasts but suggests more cuts might come if there is no evidence of any sort of pick-up in steel demand in the near term, as the broker had previously assumed. Target falls to $5.52 from $6.86 and rating downgraded to Underperform from Outperform.

See also BSL upgrade.

Boral ((BLD)) downgraded to Neutral from Buy by Citi. B/H/S: 3/3/2

FY14 results beat the broker's forecasts. However, the result lacked quality in Citi's opinion. The stock is being constrained by the FY15 construction materials earnings being conditional on positive pricing outcomes. Citi downgrades to Neutral from Buy and cuts the target to $5.60 from $6.10. The broker observes, despite concerns over price, the balance sheet leaves open the possibility of future capital management or M&A.

Burson Group ((BAP)) downgraded to Neutral from Buy by UBS. B/H/S: 0/1/0

FY14 results were marginally ahead of prospectus guidance. The company has reaffirmed expectations for FY15. UBS continues to foresee Burson has a major opportunity to lift gross margins through increasing private label penetration. Despite the positive outlook, the broker downgrades to Neutral from Buy based on a reduced forecast for shareholder returns. Target is raised to $2.40 from $2.30.

Charter Hall ((CHC)) downgraded to Neutral from Buy by Citi and to Neutral from Outperform by Credit Suisse. B/H/S: 3/4/0

The FY14 result impressed the broker. FY15 outlook appears to be targeting more modest 5-7% growth but this still looks attractive, in Citi's view. After a strong rally Citi envisages less upside at current levels and downgrades to Neutral from Buy. Target is lifted to $4.63 from $4.31 as FY16/17 earnings forecasts are raised. FY14 results beat forecasts and the outlook remains strong in Credit Suisse's view, given the company's $170m co-investment capacity and a favourable market position. However, the stock is not cheap and Credit Suisse considers the good news is factored in. Hence the rating is downgraded to Neutral from Outperform. Target is raised to $4.65 from $4.32.

Cromwell Property ((CMW)) downgraded to Underperform from Neutral by Macquarie. B/H/S: 1/1/1

Cromwell's result was in line with the broker, driven by acquisition activity and a ramp-up in funds management. CMW has guided to limited growth opportunities in FY15 so it will come down to deployment of capital, the broker suggests. The payout ratio has nevertheless been lifted above free cash flow. While this might make yield attractive, it worries the broker when CMW faces significant leasing risk, particularly in FY16-17. Downgrade to Underperform.

Dexus Property ((DXS)) downgraded to Underperform from Neutral by BA-Merrill Lynch. B/H/S: 0/6/1

The company is experiencing a deteriorating underlying growth outlook, in Merrills' opinion. Funds from operations guidance for FY15 is being driven primarily by the recognition of trading profits, a low quality earnings source, and the broker does not believe this is sustainable across the cycle. The broker believes there is downside risk to the share price and the stock is moderately overvalued. Rating is downgraded to Underperform from Neutral. Target is steady at $1.16.

DUET ((DUE)) downgraded to Underweight from Neutral by JP Morgan. B/H/S: 2/4/1

FY14 results were slightly above the broker's forecasts, although proportionate cash earnings were well below. JP Morgan is re-examining sector-relative recommendations in the light of this. With the stock trading 11% above the $2.20 target JP Morgan downgrades to Underweight from Neutral. In relation to M&A, the company has pointed out that there has not been any discussion with Spark Infra ((SKI)) since it acquired a 14% stake earlier this year.

Federation Centres ((FDC)) downgraded to Hold from Buy by Deutsche Bank. B/H/S: 3/1/3

FY14 results were in line. Deutsche Bank had expected strong FY15 guidance but the growth forecast exceeded expectations. On revised estimates, which are up by 2.5% on average, and while the growth profile is attractive the broker raises the target to $2.65 from $2.60. The rating is downgraded to Hold from Buy as the stock appears fairly valued.

See also FDC upgrade.

Fleetwood ((FWD)) downgraded to Underperform from Neutral by Credit Suisse. B/H/S: 0/3/2

CS saw yet another weak result and though there were some positives, overall visibility remains low and the analysts thus believe the risk remains to the downside. Downgrade to Underperform from Neutral. Price target sinks to $2.25 from $2.70. CS states it has a low conviction on any recovery story unfolding in FY15. Earnings estimates have received the chainsaw treatment. The analysts don't believe the share price is low enough to account for ongoing risk.

Mermaid Marine ((MRM)) downgraded to Neutral from Buy by UBS. B/H/S: 0/5/0

Operating results were broadly in line with the broker. Management anticipates improved profitability in FY15 with benefits from cost cutting. Deutsche Bank downgrades to Hold from Buy on valuation grounds. The target is lowered to $5.18 from $5.25.

New Hope ((NHC)) downgraded to Reduce from Hold by CIMB Securities. B/H/S: 1/0/1

The company performed better than CIMB expected in the July quarter, but the analysts nevertheless point out the numbers are below comparable period last year. They believe the shares are well-overvalued and hence the decision was made to downgrade to Reduce from Hold. Price target drops to $2.60 from $2.80. The analysts see one catalyst on the horizon in the regulatory approval of the New Acland expansion, which they believe will occur in 2015. CIMB prefers Whitehaven Coal ((WHC)) in the space.

nib Holdings ((NHF)) downgraded to Underweight from Neutral by JP Morgan and to Sell from Neutral by Citi. B/H/S: 1/2/3

JP Morgan has downgraded to Underweight from Neutral. Nib's FY14 results missed the broker's forecast, and following subdued FY15 guidance JP Morgan has reduced its FY15 and FY16 earnings forecasts by 10% and 6% respectively. The broker believes the stock still offers potential for very good long term earnings growth. The price target is cut to $3.00 from $3.15. Citi has downgraded to Sell from Neutral as it believes the earnings multiples the stock is trading at are too high. The broker has also lowered its FY15 and FY16 forecasts by 18% and 7% respectively. Target price is increased to $3.14 from $3.10, but this includes the special dividend of 9c.

Orora ((ORA)) downgraded to Hold from Add by CIMB Securities, to Neutral from Buy by Citi and to Neutral from Outperform by Credit Suisse. B/H/S: 4/4/0

FY14 results were ahead of CIMB's expectations. The business appears resilient and cash flow was a key positive for the broker. FY15 forecasts are largely unchanged. The broker acknowledges yield support and potential for capital management. The target is revised to $1.58 from $1.54 and is now within 3% of the share price. Rating is therefore downgraded to Hold from Add. FY14 maiden results impressed Citi as the company more than delivered on expectations with earnings up 30%. Citi expects similar trends in FY15 but assumes underlying market conditions remain lacklustre. The share price is expected to consolidate for a period. The target is raised to $1.65 from $1.60 and the rating is downgraded to Neutral from Buy. Two observations stand out from Credit Suisse's comments post FY14 release: management seems confident and in charge and top line performance turned out better than expected. As a result, CS remains a supporter and estimates have been lifted. Unfortunately, the FY14 release also sparked a big rally in the share price and as such a downgrade to Neutral has become inevitable.

Pacific Brands ((PBG)) downgraded to Neutral from Buy by Citi. B/H/S: 0/2/4

Citi has downgraded the stock to Neutral from Buy, following weak FY14 results and a 26% drop in earnings. As a consequence, Citi has cut its FY15 forecast by 16% and FY17 forecast by 15%. The broker believes the sale of the work wear division may be followed by further disposal of key brands. The broker values the company at 73c per share under this break up approach, and places a 25% probability on this occurring. Price target is reduced to 55c from 60c.

Pact Group ((PGH)) downgraded to Neutral from Outperform by Credit Suisse. B/H/S: 5/0/0

The profit report proved in line but with the share price rallying of late, CS analysts see no alternative other than pulling back the rating to Neutral from Outperform. Top line growth did disappoint, however. CS continues to hold a positive bias, but the analysts also note the intended acquisition of Dynapack is unlikely to go ahead. All in all, says CS, Pact Group is more likely to be acquired itself. Forecasts have been lifted.

See also PGH upgrade.

Perseus Mining ((PRU)) downgraded to Neutral from Buy by Citi. B/H/S: 3/3/1

FY14 was slightly better than Citi expected. The broker observes Perseus can lock in up to 230,000 ozs per annum by FY16 at Edikan but the challenge will be to stabilise output and push milling costs down. Citi downgrades to Neutral from Buy after recent share price gains. Target is lowered to 47c from 49c.

Ramsay Health Care ((RHC)) downgraded to Neutral from Outperform by Credit Suisse. B/H/S: 2/5/1

FY14 results were slightly ahead of the broker's forecasts. Credit Suisse believes the seemingly insatiable demand for Australian private hospital services will be a key contributor to earnings growth over the longer term. In France, the broker believes Generale de Sante provides the scale necessary to build a successful franchise, despite the muted tariff environment. Based on strong relative share price performance the rating is reduced to Neutral from Outperform. Target is raised to $55.00 from $52.50.

SAI Global ((SAI)) downgraded to Hold from Buy by Deutsche Bank. B/H/S: 1/3/1

Operating results were broadly in line with the broker. Management anticipates improved profitability in FY15 with benefits from cost cutting. Deutsche Bank downgrades to Hold from Buy on valuation grounds. The target is lowered to $5.18 from $5.25.

Scentre Group ((SCG)) downgraded to Neutral from Buy by Citi and to Neutral from Buy by UBS. B/H/S: 2/3/1

Scentre's first half results were meaningless as the company was formed only recently, but Citi believes progress will be made in the second half, in line with management's guidance. With concerns about the overhang having largely abated, the broker believes the market is better reflecting the value of the business and as a result downgrades the stock to Neutral from Buy. Second half guidance for 2014 is slightly below estimates but UBS remains comfortable with its figures. Distribution guidance is in line at 10.2c per security. Credit conditions have continued to improve and operating income guidance has been upgraded. UBS is downgrading to Neutral from Buy on valuation. The stock remains a preferred A-REIT but the sector screens expensive at current levels, in the broker's opinion.

Seven West Media ((SWM)) downgraded to Hold from Add by CIMB Securities and to Neutral from Buy by Citi. B/H/S: 5/3/0

FY14 results were 1% above forecasts and CIMB downgrades to Hold from Add given recent share price strength and a weaker outlook. The broker envisages no improvement for the print businesses and has downgraded expectations further on that front. Citi suspects another tough year is on the way with the return of cost inflation, driving earnings downgrades of 12% for FY15. The broker does not expect earnings growth over the next three years and downgrades to Neutral from Buy.

Sims Metal ((SGM)) downgraded to Neutral from Overweight by JP Morgan. B/H/S: 3/3/2

FY14 profit was well below the broker's estimates. The broker expects a pick up this year but this is dependent on a considerable improvement in underlying market conditions in North America. There is limited upside to the broker's $12.35 target so the rating is downgraded to Neutral from Overweight.

Specialty Fashion ((SFH)) downgraded to Neutral from Outperform by Credit Suisse. B/H/S: 1/3/0

Specialty's weak result was in line with expectations. That opening sentence was from February this year, so not much has changed since. CS analysts do have positive expectations regarding the Rivers acquisition that is currently being bedded down. In the short term, however, higher costs lead to reduced forecasts. Rating has been downgraded to Neutral from Outperform, while the target remains unchanged at $1.00.

Whitehaven Coal ((WHC)) downgraded to Neutral from Outperform by Credit Suisse. B/H/S: 4/4/0

The statutory loss for FY14 turned out not as bad as expected and management remains confident Maules Creek will be operational within budget and on time, implying coal shipments will commence in March next year. Forecasts have been lifted. The price target lifts by 10c to $2.10. The rating has been downgraded in response to share price rally. CS now anticipates a narrower loss this year. Whitehaven should swing back in the black in FY16 with CS forecasting a dividend for the year of 2.69c.

WorleyParsons ((WOR)) downgraded to Underperform from Neutral by Credit Suisse. B/H/S: 4/3/1

Credit Suisse analysts are still scratching their heads. What the hell caused a rally in the shares? CS cannot find any justification in the FY14 report, labeled "weak", and there's absolutely nothing to suggest that FY15 should see a resumption of strong growth. CS sticks to a negative view for FY15, arguing a turnaround will arrive, at some point, but before it happens there's very little incentive to own shares in WorleyParsons. If the analysts are correct, consensus will have to adjust materially to the downside. Price target falls to $17.20 from $17.80. Downgrade to Underperform from Neutral.

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