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

Morgans rates QBE as Add

QBE's result beat consensus by 24% but disappointment stemmed from a reduction in 2017 guidance to the bottom end of the previous range. QBE also downgraded in June due to a weak Emerging Markets business, which appears still to be the case, the broker suggests.

There were positives nevertheless, the broker suggests, mainly improvement in the combined operating ratio in both the US and A&NZ. The broker has cut earnings forecasts and its target to $12.55 from $13.09. Add retained.

UBS rates TWE as Neutral

Treasury Wine Estates' full-year result met consensus and the broker after posting a strong year with margin gains three years ahead of schedule. A higher tax rate and interest costs caused it to fall short of UBS's net profit after tax figure.

Australia and New Zealand led the charge, outpacing UBS estimates by 10% (up 24% year on year). Strong Asia earnings fell short of estimates but margins rose to 38%.

Treasury Wine Estates announced a buyback, which the broker pegs as 1% accretive, and appears to maintain its M&A appetite.

UBS suspects its medium-term forecasts could be conservative. FY18 earnings per share estimates fall -8% to reflect mark-to-market of currency, a higher tax rate and higher funding costs, partly offset from the buyback.

Neutral rating retained and target price rises to $13 from $10.45 target to reflect the 23% rise in FY20 medium-term earnings-before-interest-and-tax upgrades.

Deutsche Bank rates WES as Sell

FY17 result was slightly ahead of Deutsche Bank's estimates. However, composition was unfavourable with retail businesses generally below expectations.

Sharp margin declines in the second half occurred at Coles and the broker notes the outlook is weak. Challenges for the industrial businesses are also expected in FY18.

Sell rating and $38 target retained.