OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Credit Suisse rates IPL as Downgrade to Neutral from Outperform

Fertiliser prices are strengthening and even with a weaker USD, have created a stronger near-term outlook for Incitec Pivot, suggests Credit Suisse.

The broker has upgraded its FY21 forecasts while downgrading its FY22 forecast figures due to AUD/USD currency assumptions. With robust demand and moderate supply additions, the broker expects a more favourable backdrop for fertilisers in 2021.

While constructive on the near-term outlook, Credit Suisse reduces its rating to Neutral from Outperform led by the recent share price strength. Target rises to $2.73 from $2.70.

UBS rates RMD as Buy

UBS incorporates a 10% share buyback into forecasts, after assuming no major increases in debt levels due to any significant near-term acquisitions. This is calculated to result in forecast EPS upgrades of around 7% longer term.

While the sleep business is likely to remain slightly pressured in the short term due to covid-19 and lower diagnostic rates, mask/accessory re-supply growth will remain robust, assesses the broker.

The Buy rating is unchanged. The target price is increased to $US241 from US$210.

Morgans rates S32 as Downgrade to Hold from Add

Despite a second quarter result ahead of estimates, Morgans lowers South32's rating to Hold from Add, due to a recent share price rally.

Divestment of the company’s South African Energy Coal (SAEC) business is progressing, and management is now targeting sale completion by 31 March 2021.

The broker sees further upside potential from a continuing commodity cycle. While it's considered there's less upside potential from aluminium and manganese, coal markets are likely to recover.

The broker reduces the target price to $2.60 from $2.65.