Australian Broker Call

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September 12, 2019

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COMPANIES DISCUSSED IN THIS ISSUE

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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).

Last Updated: 05:00 PM

Your daily news report on the latest recommendation, valuation, forecast and opinion changes.

This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.

For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE

Today's Upgrades and Downgrades
BSL - BLUESCOPE STEEL Downgrade to Hold from Accumulate Ord Minnett
EVN - EVOLUTION MINING Upgrade to Neutral from Sell Citi
GMG - GOODMAN GRP Upgrade to Buy from Neutral UBS
MGR - MIRVAC Upgrade to Neutral from Underperform Credit Suisse
NCM - NEWCREST MINING Upgrade to Neutral from Sell Citi
NST - NORTHERN STAR Upgrade to Buy from Neutral Citi
Upgrade to Neutral from Sell UBS
OGC - OCEANAGOLD Upgrade to Buy from Neutral Citi
Upgrade to Buy from Neutral UBS
RRL - REGIS RESOURCES Upgrade to Neutral from Sell Citi
Upgrade to Buy from Sell UBS
SAR - SARACEN MINERAL Upgrade to Neutral from Sell Citi
SBM - ST BARBARA Upgrade to Neutral from Sell Citi
SGM - SIMS METAL MANAGEMENT Downgrade to Lighten from Hold Ord Minnett
ALG  ARDENT LEISURE GROUP

Travel, Leisure & Tourism

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Overnight Price: $1.06

Citi rates ALG as Buy (1) -

Dave & Buster’s in the US, competing with Main Event, has issued its second profit warning, Citi analysts note. They conclude this is yet another signal competition is increasing in the US family entertainment market.

While Main Event is also impacted, Citi analysts maintain the 10% Sum-of-the-Parts valuation premium they apply remains appropriate, citing earnings upside from greater rollout potential, lower exposure to wages pressure and management's ongoing focus on improving revenue per store.

Buy rating maintained. Target $1.55.

Target price is $1.55 Current Price is $1.06 Difference: $0.49
If ALG meets the Citi target it will return approximately 46% (excluding dividends, fees and charges).

Current consensus price target is $1.33, suggesting upside of 25.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 212.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.3, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 4.00 cents and EPS of 1.90 cents.
At the last closing share price the estimated dividend yield is 3.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 55.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.8, implying annual growth of N/A.

Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 1.9%.

Current consensus EPS estimate suggests the PER is 58.9.

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ALL  ARISTOCRAT LEISURE LIMITED

Gaming

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Overnight Price: $30.38

Macquarie rates ALL as Outperform (1) -

FY19 growth expectations appear achievable to Macquarie. The broker considers the stock undervalued, given the attractive growth and high-quality cash flow.

Analysis suggests that a 22x PE is reasonable when compared with other ASX industrials and provides for significant upside, given the stock is trading on a 19x 12-months forward basis.

Outperform maintained. Target is raised to $34.50 from $31.50.

Target price is $34.50 Current Price is $30.38 Difference: $4.12
If ALL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $33.54, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 55.00 cents and EPS of 136.70 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.4, implying annual growth of 16.0%.

Current consensus DPS estimate is 52.7, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 22.9.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 63.00 cents and EPS of 157.00 cents.
At the last closing share price the estimated dividend yield is 2.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 153.0, implying annual growth of 15.6%.

Current consensus DPS estimate is 59.8, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 19.9.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BSL  BLUESCOPE STEEL LIMITED

Steel & Scrap

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Overnight Price: $13.19

Ord Minnett rates BSL as Downgrade to Hold from Accumulate (3) -

The recent strong performance from BlueScope Steel has been contrary to a deterioration in steel spreads, trade concerns and scrap pricing/demand.

As a result, Ord Minnett, noting the full valuation and falling price momentum, downgrades to Hold from Accumulate. Target is steady at $14.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $14.00 Current Price is $13.19 Difference: $0.81
If BSL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $13.55, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 dividend of 14.00 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 1.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.2, implying annual growth of -54.6%.

Current consensus DPS estimate is 14.5, implying a prospective dividend yield of 1.1%.

Current consensus EPS estimate suggests the PER is 15.3.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 80.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 113.9, implying annual growth of 32.1%.

Current consensus DPS estimate is 15.4, implying a prospective dividend yield of 1.2%.

Current consensus EPS estimate suggests the PER is 11.6.

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CIM  CIMIC GROUP LIMITED

Industrial Sector Contractors & Engineers

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Overnight Price: $32.04

Macquarie rates CIM as Neutral (3) -

The company has re-started its buyback, albeit at relatively small volumes, Macquarie observes. The next catalyst is the third quarter result on October 23.

The broker expects guidance to be reiterated but retains a forecast at the low end of the range of $790-840m for net profit.

Trends were relatively weak in the second quarter and delays in the awarding of new infrastructure have been well documented.

Neutral maintained. Target is reduced to $35.65 from $40.00.

Target price is $35.65 Current Price is $32.04 Difference: $3.61
If CIM meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $41.46, suggesting upside of 29.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 157.50 cents and EPS of 246.20 cents.
At the last closing share price the estimated dividend yield is 4.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 243.7, implying annual growth of 1.2%.

Current consensus DPS estimate is 154.5, implying a prospective dividend yield of 4.8%.

Current consensus EPS estimate suggests the PER is 13.1.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 161.90 cents and EPS of 256.60 cents.
At the last closing share price the estimated dividend yield is 5.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 251.2, implying annual growth of 3.1%.

Current consensus DPS estimate is 158.0, implying a prospective dividend yield of 4.9%.

Current consensus EPS estimate suggests the PER is 12.8.

Market Sentiment: -0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

COE  COOPER ENERGY LIMITED

Crude Oil

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Overnight Price: $0.62

Credit Suisse rates COE as Neutral (3) -

The start-up of Annie has established the company's exploration credentials, Credit Suisse believes. The broker re-jigs its models for Annie and Elanora, accelerating first gas by a year to FY22.

The start-up of Sole may be slightly delayed because of the readiness of the Orbost plant. Credit Suisse suggests the market may be "getting a little carried away" with Cooper Energy but struggles to find much in the way of negative catalysts.

Neutral maintained. Target is raised to $0.60 from $0.56.

Target price is $0.60 Current Price is $0.62 Difference: minus $0.02 (current price is over target).
If COE meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.66, suggesting upside of 5.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 0.00 cents and EPS of 35.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 1.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.6, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 4.2.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 0.00 cents and EPS of 41.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 1.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.2, implying annual growth of 11.0%.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is 3.8.

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

EVN  EVOLUTION MINING LIMITED

Gold & Silver

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Overnight Price: $4.72

Citi rates EVN as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Evolution Mining is hereby upgraded to Neutral from Sell. Target price lifts to $4.70 from $4.20.

Target price is $4.70 Current Price is $4.72 Difference: minus $0.02 (current price is over target).
If EVN meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.15, suggesting downside of -12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 EPS of 32.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.9, implying annual growth of 85.8%.

Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 2.3%.

Current consensus EPS estimate suggests the PER is 19.7.

Forecast for FY21:

Citi forecasts a full year FY21 EPS of 37.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.0, implying annual growth of 0.4%.

Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 2.3%.

Current consensus EPS estimate suggests the PER is 19.7.

Market Sentiment: -0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

GMG  GOODMAN GROUP

Infra & Property Developers

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Overnight Price: $13.69

UBS rates GMG as Upgrade to Buy from Neutral (1) -

UBS believes there are enough structural developments to overcome global economic uncertainty. Going forward, the company's portfolio strategy should mean a high level of sustainable performance fees.

In FY19 Goodman Group generated $600m in development profits, expected to drive performance fees later on. UBS estimates development gains will generate roughly one third of performance fees over the medium to long term.

The broker upgrades to Buy from Neutral, maintaining a steady target of $15.60.

Target price is $15.60 Current Price is $13.69 Difference: $1.91
If GMG meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $15.44, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 30.00 cents and EPS of 57.00 cents.
At the last closing share price the estimated dividend yield is 2.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.4, implying annual growth of -36.2%.

Current consensus DPS estimate is 30.0, implying a prospective dividend yield of 2.2%.

Current consensus EPS estimate suggests the PER is 23.9.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 33.00 cents and EPS of 63.00 cents.
At the last closing share price the estimated dividend yield is 2.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.5, implying annual growth of 8.9%.

Current consensus DPS estimate is 32.5, implying a prospective dividend yield of 2.4%.

Current consensus EPS estimate suggests the PER is 21.9.

Market Sentiment: 0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

MGR  MIRVAC GROUP

Infra & Property Developers

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Overnight Price: $3.04

Credit Suisse rates MGR as Upgrade to Neutral from Underperform (3) -

Credit Suisse reiterates a positive view on the quality of the company's office portfolio, expecting that operating income growth will be healthy and derived from rent reviews and the rolling out/completion of the commercial development pipeline.

The sustainability of distribution growth is also well supported by recurring revenue streams and a low pay-out ratio. Rating is upgraded to Neutral from Underperform. Target is steady at $3.04.

Target price is $3.04 Current Price is $3.04 Difference: $0
If MGR meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.20, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 12.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 3.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.5, implying annual growth of -36.6%.

Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 4.0%.

Current consensus EPS estimate suggests the PER is 17.4.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 13.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 4.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.2, implying annual growth of -1.7%.

Current consensus DPS estimate is 12.9, implying a prospective dividend yield of 4.2%.

Current consensus EPS estimate suggests the PER is 17.7.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

NCM  NEWCREST MINING LIMITED

Gold & Silver

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Overnight Price: $34.39

Citi rates NCM as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Newcrest Mining is hereby upgraded to Neutral from Sell. Target price increases to $36.90 from $31.05.

Target price is $36.90 Current Price is $34.39 Difference: $2.51
If NCM meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $28.82, suggesting downside of -16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 EPS of 212.21 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 166.9, implying annual growth of N/A.

Current consensus DPS estimate is 34.5, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 20.6.

Forecast for FY21:

Citi forecasts a full year FY21 EPS of 221.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 133.7, implying annual growth of -19.9%.

Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 0.8%.

Current consensus EPS estimate suggests the PER is 25.7.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: -0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


UBS rates NCM as Sell (5) -

While Newcrest trades at a premium rating because of its sector-leading mine life and asset quality, UBS notes production and earnings are set to peak in FY20 because of grade decline at Cadia.

Cash flow is being redeployed at Golpu and, potentially, at Red Chris and this is expected to lift asset quality. Still, UBS maintains a Sell rating, lifting the target to $32 from $26.

Target price is $32.00 Current Price is $34.39 Difference: minus $2.39 (current price is over target).
If NCM meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.82, suggesting downside of -16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 28.33 cents and EPS of 167.16 cents.
At the last closing share price the estimated dividend yield is 0.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 166.9, implying annual growth of N/A.

Current consensus DPS estimate is 34.5, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 20.6.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 24.08 cents and EPS of 153.00 cents.
At the last closing share price the estimated dividend yield is 0.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 133.7, implying annual growth of -19.9%.

Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 0.8%.

Current consensus EPS estimate suggests the PER is 25.7.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: -0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

NST  NORTHERN STAR RESOURCES LTD

Gold & Silver

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Overnight Price: $10.67

Citi rates NST as Upgrade to Buy from Neutral (1) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Northern Star is hereby upgraded to Buy from Neutral. Target price lifts to $13.30 from $11.50.

Target price is $13.30 Current Price is $10.67 Difference: $2.63
If NST meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $10.43, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 17.00 cents and EPS of 91.00 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.5, implying annual growth of 139.8%.

Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 18.2.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 17.00 cents and EPS of 97.00 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.2, implying annual growth of 11.5%.

Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 16.4.

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


UBS rates NST as Upgrade to Neutral from Sell (3) -

Northern Star has the most near-term production and earnings momentum of the gold stocks under coverage, UBS assesses. Production is expected to grow to 884,000 ounces in FY20 and towards an aspirational target of over 1m ounces per annum.

The main component in the turnaround will be Pogo. Pogo has declared a maiden reserve of 1.5mt and 7.5g/t.

UBS upgrades to Neutral from Sell and raises the target to $11.50 from $10.00.

Target price is $11.50 Current Price is $10.67 Difference: $0.83
If NST meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.43, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 17.00 cents and EPS of 69.00 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.5, implying annual growth of 139.8%.

Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 1.5%.

Current consensus EPS estimate suggests the PER is 18.2.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 19.00 cents and EPS of 83.00 cents.
At the last closing share price the estimated dividend yield is 1.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.2, implying annual growth of 11.5%.

Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 1.7%.

Current consensus EPS estimate suggests the PER is 16.4.

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

OGC  OCEANAGOLD CORPORATION

Gold & Silver

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Overnight Price: $3.55

Citi rates OGC as Upgrade to Buy from Neutral (1) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. OceanaGold is hereby upgraded to Buy from Neutral. Target price climbs to $4.85 from $4.45.

Target price is $4.85 Current Price is $3.55 Difference: $1.3
If OGC meets the Citi target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $4.66, suggesting upside of 31.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Citi forecasts a full year FY19 dividend of 4.25 cents and EPS of 12.61 cents.
At the last closing share price the estimated dividend yield is 1.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.7, implying annual growth of N/A.

Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 21.3.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 4.25 cents and EPS of 70.27 cents.
At the last closing share price the estimated dividend yield is 1.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.0, implying annual growth of 103.6%.

Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 10.4.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


UBS rates OGC as Upgrade to Buy from Neutral (1) -

The business is highly leveraged to the gold price yet the shares have not rallied with the sector because of recent operating and regulatory issues. UBS notes the share price has declined -29% in 2019 to date.

A cessation of mining at Didipio in the Philippines remains the biggest headache for the company, although lower-grade stockpiles are still being processed.

UBS does not believe the share price is factoring in much value for Didipio but upgrades to Buy from Neutral as the stock is considered fair value based on the value of the NZ and US assets. Target is reduced to $4.00 from $4.40.

Target price is $4.00 Current Price is $3.55 Difference: $0.45
If OGC meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $4.66, suggesting upside of 31.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 1.42 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 0.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.7, implying annual growth of N/A.

Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 1.0%.

Current consensus EPS estimate suggests the PER is 21.3.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 5.67 cents and EPS of 31.17 cents.
At the last closing share price the estimated dividend yield is 1.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.0, implying annual growth of 103.6%.

Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 1.3%.

Current consensus EPS estimate suggests the PER is 10.4.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

RRL  REGIS RESOURCES LIMITED

Gold & Silver

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Overnight Price: $4.61

Citi rates RRL as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Regis Resources is hereby upgraded to Neutral from Sell. Target price increases to $5 from $4.70.

Target price is $5.00 Current Price is $4.61 Difference: $0.39
If RRL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.88, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 22.00 cents and EPS of 55.00 cents.
At the last closing share price the estimated dividend yield is 4.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.8, implying annual growth of 17.5%.

Current consensus DPS estimate is 16.6, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 22.00 cents and EPS of 64.00 cents.
At the last closing share price the estimated dividend yield is 4.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.2, implying annual growth of 1.1%.

Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 12.1.

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


UBS rates RRL as Upgrade to Buy from Sell (1) -

UBS upgrades to Buy from Sell, taking a new valuation approach and given the -5% decline in the share price over 2019. The company has not shared in the rally from the 20% increase in the Australian dollar gold price.

The business generates cash and has relatively low operating risk. While economics at Duketon are becoming more challenging and there is risk of a delay at McPhillamys, UBS believes this is more than fully captured in the share price. Target is raised $5.30 from $4.85.

Target price is $5.30 Current Price is $4.61 Difference: $0.69
If RRL meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.88, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 21.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 4.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.8, implying annual growth of 17.5%.

Current consensus DPS estimate is 16.6, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 21.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 4.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.2, implying annual growth of 1.1%.

Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 12.1.

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SAR  SARACEN MINERAL HOLDINGS LIMITED

Gold & Silver

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Overnight Price: $3.38

Citi rates SAR as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. Saracen Mineral is hereby upgraded to Neutral from Sell. Target price has gained 10c to $3.65.

Target price is $3.65 Current Price is $3.38 Difference: $0.27
If SAR meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 7.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 2.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.00.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 7.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 2.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.56.

Market Sentiment: -0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SBM  ST BARBARA LIMITED

Gold & Silver

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Overnight Price: $2.86

Citi rates SBM as Upgrade to Neutral from Sell (3) -

Commodities analysts at Citi this week revised their price forecasts for gold bullion, now predicting US$2000/oz in the medium term should be regarded as a genuine possibility.

In response, analysts in Australia have upgraded their views on domestic gold companies. St Barbara is hereby upgraded to Neutral from Sell. Target price remains unchanged at $3.00 despite increased forecasts.

Target price is $3.00 Current Price is $2.86 Difference: $0.14
If SBM meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Citi forecasts a full year FY20 dividend of 12.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 4.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.8, implying annual growth of 17.8%.

Current consensus DPS estimate is 10.3, implying a prospective dividend yield of 3.6%.

Current consensus EPS estimate suggests the PER is 9.0.

Forecast for FY21:

Citi forecasts a full year FY21 dividend of 9.00 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 3.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.9, implying annual growth of -6.0%.

Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 9.6.

Market Sentiment: -0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SGM  SIMS METAL MANAGEMENT LIMITED

Steel & Scrap

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Overnight Price: $12.63

Ord Minnett rates SGM as Downgrade to Lighten from Hold (4) -

The recent strong performance from Sims Metal has been contrary to a deterioration in steel spreads, trade concerns and scrap pricing/demand.

As a result, and amid heightened macro economic risks, Ord Minnett downgrades to Lighten from Hold, reducing the target to $10.50 from $11.00.

The broker believes the recent appreciation in the share price is unjustified. Non-ferrous automobile shred, called twitch, is now priced at multi-year lows of US$0.39/lb.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $10.50 Current Price is $12.63 Difference: minus $2.13 (current price is over target).
If SGM meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.33, suggesting downside of -10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 86.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.9, implying annual growth of 15.7%.

Current consensus DPS estimate is 39.6, implying a prospective dividend yield of 3.1%.

Current consensus EPS estimate suggests the PER is 14.5.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 90.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.4, implying annual growth of 2.9%.

Current consensus DPS estimate is 40.6, implying a prospective dividend yield of 3.2%.

Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

STO  SANTOS LIMITED

NatGas

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Overnight Price: $7.39

Macquarie rates STO as Outperform (1) -

Macquarie assesses the share transfer proposal from ENN Energy to ENN Ecological Holdings is unlikely to have an impact on the current strategic partnership with Santos.

The transfer of the shares within the group should not change the holdings of ENN from "above 15%", as required in the strategic partnership agreement which includes a board seat.

Macquarie maintains an Outperform rating and $8.20 target.

Target price is $8.20 Current Price is $7.39 Difference: $0.81
If STO meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $7.64, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Macquarie forecasts a full year FY19 dividend of 14.73 cents and EPS of 62.62 cents.
At the last closing share price the estimated dividend yield is 1.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.0, implying annual growth of N/A.

Current consensus DPS estimate is 15.7, implying a prospective dividend yield of 2.1%.

Current consensus EPS estimate suggests the PER is 12.7.

Forecast for FY20:

Macquarie forecasts a full year FY20 dividend of 13.32 cents and EPS of 66.87 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 60.0, implying annual growth of 3.4%.

Current consensus DPS estimate is 14.6, implying a prospective dividend yield of 2.0%.

Current consensus EPS estimate suggests the PER is 12.3.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SYR  SYRAH RESOURCES LIMITED

New Battery Elements

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Overnight Price: $0.55

UBS rates SYR as Neutral (3) -

The company will cut production because of a sudden decrease in the spot price of natural flake graphite in China. Inventory levels have also built up and affected price negotiations and contract renewals.

UBS notes a sudden and unexpected deterioration across a number of commodities as the US/China trade war continues, creating challenges for the short term.

The broker will be watching the October 19 update for signs that production cuts are benefiting the graphite price. Neutral maintained. Target is reduced to $0.59 from $0.90.

Target price is $0.59 Current Price is $0.55 Difference: $0.04
If SYR meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.16, suggesting upside of 110.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

UBS forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 18.42 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -13.0, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY20:

UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 21.25 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -7.0, implying annual growth of N/A.

Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.

Current consensus EPS estimate suggests the PER is N/A.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

TCL  TRANSURBAN GROUP

Infrastructure & Utilities

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Overnight Price: $14.25

Ord Minnett rates TCL as Buy (1) -

To reflect a more subdued economic outlook for the near term, Ord Minnett has reduced earnings estimates for transport infrastructure stocks.

The broker maintains a Buy rating for Transurban, envisaging revenue growth prospects are favourable versus peers. The target is lowered to $16.00 from $16.75.

This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.

Target price is $16.00 Current Price is $14.25 Difference: $1.75
If TCL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $14.39, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Ord Minnett forecasts a full year FY20 EPS of 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 237.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.9, implying annual growth of 216.7%.

Current consensus DPS estimate is 62.0, implying a prospective dividend yield of 4.4%.

Current consensus EPS estimate suggests the PER is 68.2.

Forecast for FY21:

Ord Minnett forecasts a full year FY21 EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 142.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.6, implying annual growth of 22.5%.

Current consensus DPS estimate is 65.1, implying a prospective dividend yield of 4.6%.

Current consensus EPS estimate suggests the PER is 55.7.

Market Sentiment: -0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Today's Price Target Changes
Company Last Price Broker New Target Prev Target Change
ALL ARISTOCRAT LEISURE $30.38 Macquarie 34.50 31.50 9.52%
AQG ALACER GOLD $5.86 UBS 7.60 6.50 16.92%
CIM CIMIC GROUP $32.04 Macquarie 35.65 40.00 -10.88%
COE COOPER ENERGY $0.62 Credit Suisse 0.60 0.56 7.14%
DCN DACIAN GOLD $1.18 Citi 1.40 1.00 40.00%
EVN EVOLUTION MINING $4.72 Citi 4.70 4.20 11.90%
UBS 4.70 4.25 10.59%
NCM NEWCREST MINING $34.39 Citi 36.90 31.05 18.84%
UBS 32.00 26.00 23.08%
NST NORTHERN STAR $10.67 Citi 13.30 11.50 15.65%
UBS 11.50 10.00 15.00%
OGC OCEANAGOLD $3.55 Citi 4.85 4.45 8.99%
UBS 4.00 4.40 -9.09%
RRL REGIS RESOURCES $4.61 Citi 5.00 4.70 6.38%
UBS 5.30 4.85 9.28%
RSG RESOLUTE MINING $1.47 Citi 2.40 2.30 4.35%
SAR SARACEN MINERAL $3.38 Citi 3.65 3.55 2.82%
SGM SIMS METAL MANAGEMENT $12.63 Ord Minnett 10.50 11.00 -4.55%
SYD SYDNEY AIRPORT $8.00 Ord Minnett 7.80 7.90 -1.27%
SYR SYRAH RESOURCES $0.55 UBS 0.59 0.90 -34.44%
TCL TRANSURBAN GROUP $14.25 Ord Minnett 16.00 16.75 -4.48%
Summaries
ALG ARDENT LEISURE Buy - Citi Overnight Price $1.06
ALL ARISTOCRAT LEISURE Outperform - Macquarie Overnight Price $30.38
BSL BLUESCOPE STEEL Downgrade to Hold from Accumulate - Ord Minnett Overnight Price $13.19
CIM CIMIC GROUP Neutral - Macquarie Overnight Price $32.04
COE COOPER ENERGY Neutral - Credit Suisse Overnight Price $0.62
EVN EVOLUTION MINING Upgrade to Neutral from Sell - Citi Overnight Price $4.72
GMG GOODMAN GRP Upgrade to Buy from Neutral - UBS Overnight Price $13.69
MGR MIRVAC Upgrade to Neutral from Underperform - Credit Suisse Overnight Price $3.04
NCM NEWCREST MINING Upgrade to Neutral from Sell - Citi Overnight Price $34.39
Sell - UBS Overnight Price $34.39
NST NORTHERN STAR Upgrade to Buy from Neutral - Citi Overnight Price $10.67
Upgrade to Neutral from Sell - UBS Overnight Price $10.67
OGC OCEANAGOLD Upgrade to Buy from Neutral - Citi Overnight Price $3.55
Upgrade to Buy from Neutral - UBS Overnight Price $3.55
RRL REGIS RESOURCES Upgrade to Neutral from Sell - Citi Overnight Price $4.61
Upgrade to Buy from Sell - UBS Overnight Price $4.61
SAR SARACEN MINERAL Upgrade to Neutral from Sell - Citi Overnight Price $3.38
SBM ST BARBARA Upgrade to Neutral from Sell - Citi Overnight Price $2.86
SGM SIMS METAL MANAGEMENT Downgrade to Lighten from Hold - Ord Minnett Overnight Price $12.63
STO SANTOS Outperform - Macquarie Overnight Price $7.39
SYR SYRAH RESOURCES Neutral - UBS Overnight Price $0.55
TCL TRANSURBAN GROUP Buy - Ord Minnett Overnight Price $14.25
RATING SUMMARY
Rating No. Of Recommendations
1. Buy

9

3. Hold

11

4. Reduce

1

5. Sell

1

Thursday 12 September 2019

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Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.