FNArena Reporting Season Monitor.08.15

	A	B	C	D	E	F	G	H
1	FNArena Reporting Season Monitor
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3	Stock Count	275						Total ratings upgrades:
4	Beats	83						109
5	% Beats	30.18						Total ratings downgrades:
6	Misses	53						34
7	% Misses	19.27						Simple average net target price change %:
8	Beat/Miss ratio	1.57						1.24
9				Rating	Rating
10			Profit	Up-	Down-	Prev	New
11	Company	Code	Result	grades	grades	Target	Target	Commentary

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13	Reported Yesterday
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15	3P Learning	3PL	miss	0	0	2.95	2.91	Strong US licence growth meant 3P met prospectus forecasts but weakness in A&NZ led to a miss of broker forecasts. Cash flow was nevertheless strong and growth opportunities remain solid thus both covering brokers retain Buy.
16	Ausdrill	ASL	miss	0	0	0.41	0.36	Ausdrill's result fell short given low commodity prices, weak demand and excess capacity. Capex and working capital reductions should allow for stronger cash flow to reduce debt. Three Holds.
17	Austbrokers Holdings	AUB	in line	0	0	10.03	9.57	Austbroker's result was in line but underlying earnings declined for the first time in a decade as insurance premiums cycle down. FY16 will be subdued as well but ongoing acquisitions will drive growth ahead of a cycle turnaround. Two Buys, one Hold.
18	Australian Finance Group	AFG	beat	0	0	1.42	1.45	Aust Finance clearly beat both the prospectus and Macquarie, the one broker covering the stock. Further upside to FY16 prospectus forecasts is expected. Long term growth in mortgage broking supports a Buy rating.
19	Billabong International	BBG	beat	0	0	0.68	0.70	Headline profit was below but underlying earnings surprised to the upside so as Billabong returns to profit for the first time since its near-death experience, we'll call it a beat. US sales were strong. Two brokers remain cautiously on Hold but JP Morgan is prepared to back an ongoing turnaround and retains Buy.
20	Boral	BLD	miss	0	1	6.30	6.18	Boral's result met recent guidance but was bolstered by property sales, while FY16 guidance was very disappointing. The US is performing well but local construction materials & cement will remain subdued until infrastructure growth kicks in in FY17. Brokers ratings are split on how long they're prepared to wait. Three Buys, four Holds and one downgrade to Sell.
21	Cromwell Property Group	CMW	miss	0	0	1.01	1.01	Cromwell's result and guidance missed forecasts. Accretion form the Valad acquisition is masking weakness at home, where lease expiries are due. The dividend is not covered by free cash flow. One Hold, four Sells.
22	Emeco Holdings	EHL	in line	0	0	0.15	0.14	Emeco's result met expectations. Increased utilitsation was pleasing but there's no escaping weak demand, excess capacity and margin contraction in the industry. The company is so far not in breach of covenants. Three Holds.
23	Evolution Mining	EVN	in line	1	0	1.18	1.22	Evolution's result was sufficiently in line with disparate forecasts. Cash flow was strong on lower costs and better A$ gold prices. The company is about to add new production that will make it the second biggest Oz gold producer. One upgrade to Buy makes five, with one Hold.
24	Fantastic Holdings	FAN	in line	1	0	2.14	2.30	Fantastic posted a strong second half to match the first, indicating building momentum on new products and improved customer service and marketing. A$ headwinds blow, hence two Holds and a Sell, but Macquarie sees an undemanding valuation and upgrades to Buy.
25	Flight Centre	FLT	beat	1	0	40.05	40.09	Flight Centre beat consensus but positive forex moves masked negative underlying earnings growth. Do you believe the company's bricks & mortar business is under structural threat from online agents and airlines' own platforms? Brokers are split. One upgrade to Buy makes three with two Holds and a Sell.
26	Galileo Japan Trust	GJT	beat	0	0	2.17	1.96	Galileo will always be beholden to Aussie-yen fluctuations, but a beat on earnings and guidance, an increased payout ratio implying a 10% yield, and a steep discount to NTA provide a sufficient buffer for Macquarie, the one broker covering the stock. Buy retained.
27	Hotel Property Investments	HPI	in line	0	0	2.50	2.50	While beating the prospectus, Hotel Property's result was in line with JP Morgan, the one broker covering the stock, and distribution guidance fell short. The fund is looking to possibly internalise. Hold retained.
28	Huon Aquaculture Group	HUO	in line	0	1	4.60	3.30	Huon just managed to hit the bottom of the consensus range but only because cost cuts offset revenue declines in a weak wholesale market. Credit Suisse, the one FNArena broker to cover the stock, likes the long term story but sees ongoing near term pressure and has downgraded to Hold.
29	IPH	IPH	beat	0	0	5.06	5.47	IPH's result beat the prospectus and forecasts on strong growth in Asia. Currency tailwinds, acquisitions and further cost cuts should continue to drive growth, but then it's just a matter of valuation. One Buy, one Hold.
30	iSelect	ISU	beat	0	0	1.85	1.95	Credit Suisse is the only broker to cover iSelect, and while the result missed the broker's forecast, it easily beat the prospectus and consensus by the broker's own admission so we'll grant it a beat. CS retains Buy despite guidance disappointment given the broker believes capital management is nigh and valuation is undemanding.
31	Macquarie Atlas Roads	MQA	beat	0	0	3.58	3.67	Mac Atlas beat expectations on a strong performance from AFFR and favourable currency. Some brokers were nevertheless frustrated that distribution guidance was not upgraded, but the AFFR concession extension adds value. Four Buys, two Holds.
32	Mantra Group	MTR	beat	1	0	3.90	3.83	Mantra's result hit the top end of upgraded guidance but still beat a couple of brokers. All the winds are blowing in the right direction for Mantra, making it difficult to ignore the growth story despite a solid valuation. One upgrade to Buy makes four, with only Morgans still on Hold on price.
33	McAleese	MCS	miss	0	0	0.21	0.18	High depreciation and interest costs led to a loss for McAleese when a profit was expected. Asset sales will fund capex and debt reduction but as another loss is expected in FY16, debt reduction capacity is diminishing. Two Holds, one Sell.
34	MYOB	MYO	beat	0	0	3.87	3.82	MYOB only just returned to the boards but still managed to beat its prospectus. Brokers are drawn to upside potential from SMEs migrating their accounting to the cloud but then it's just a matter of valuation. One Buy, one Hold.
35	National Storage REIT	NSR	in line	0	0	1.72	1.72	National Storage's result, dividend and guidance were all in line. Storage offers a material yield spread to the wider REIT sector, and NSR's acquisition activity offers better upside earnings growth. While there is upside to guidance, valuation is also an issue. Two Buys, one Hold.
36	Nine Entertainment Co	NEC	in line	1	0	1.98	1.88	Nine's result was in line with recently downgraded guidance. Nine is an enigmatic beast, struggling against a weak ad market and facing structural TV decline but offering substantial capital management from a strong balance sheet, bolstered by asset sales. One upgrade to Buy makes five, with two Holds and a Sell.
37	Northern Star Resources	NST	in line	0	0	2.30	2.15	Northern Star's result was in line but higher depreciation charges force forecast downgrades. Earnings growth should nevertheless remain strong and exploration is the key catalyst. Two from two Holds.
38	Perpetual	PPT	beat	1	0	50.97	47.92	Given Perpetual's result beat consensus we'll call it a beat, although it did just miss a couple of elevated FNArena broker forecasts. With the transformation now complete and TrustCo in place, Perpetual returns to being beholden to market moves, which haven't been that good lately, albeit the Global Fund is growing strongly. One upgrade to Buy makes two, with six Holds.
39	Ramsay Health Care	RHC	in line	2	0	65.01	66.57	Valuation is always an issue for Ramsay but while the company this time didn't deliver a typical beat, brokers cannot help but be impressed with growth and all suggest FY16 guidance looks conservative. Two upgrades to Buy make four, with two Holds and two Sells.
40	RCG Corp	RCG	in line	0	0	1.42	1.41	RCG's result was in line but the Accent acquisition has boosted sales growth immediately, so guidance might be under upside threat. Only the one broker covers RCG and Morgans retains Buy.
41	Retail Food Group	RFG	in line	1	0	6.98	6.25	Two brokers cover Retail Food but only one has updated, and upgraded to Buy following an in line result. Morgans sees blue sky potential from international expansion and believes risk/reward is now better balanced. JP Morgan is on Sell.
42	Saracen Mineral Holdings	SAR	miss	0	0	0.49	0.55	While a miss, Saracen's result was much better than last year. Strong cash flow has now left the company debt free and further cash will be used to fund the Thunderbox development. Two from two Buys.
43	Southern Cross Media	SXL	in line	1	0	1.04	1.06	Southern Cross' result was largely in line. The weak ad market continues to weigh but at least the company appears to have recovered from its 2DayFM ratings loss. The stock is a prime consolidation target but as Canberra drags the chain, some brokers are not factoring that in. One upgrade to Hold makes four with two Buys and two Sells.
44	SurfStitch Group	SRF	beat	0	0	2.10	2.33	While SurfStich's result met the prospectus, it beat one of two covering brokers. Brokers expect strong growth ahead boosted by the consolidation of all platforms onto one e-commerce website. Two Buys.
45	Transfield Services	TSE	miss	2	0	1.68	1.33	Transfield's result missed most brokers but while guidance suggests flat growth, earnings visibility is reasonable. A lot depends on rewinning the detention centre contracts. While some brokers feel this risk is more than priced in, hence two upgrades to Buy to make three, uncertainty leaves two on Hold and one on Sell.
46	Veda Group	VED	in line	1	1	2.52	2.44	Veda's result was in line and the dividend removes that uncertainty. Four brokers cover Veda and three believe in the long term growth prospects, hence one upgrade to Buy makes three. But Macquarie notes the costs of delivering comprehensive credit reporting are building well ahead of earnings which are some distance away, and downgrades to Hold.
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48
49	Previously Reported
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51
52	360 Capital Industrial Fund	TIX	in line	0	0	2.73	2.70	Only one broker covers 360 Industrial and the result was in line with Morgans. The broker likes exposure to industrial property with high quality tenants such as Woolworths suppoting an 8% yield. Buy retained.
53	360 Capital Office Fund	TOF	in line	0	0	2.26	2.23	Only one broker covers 360 Office and Morgans retains Buy following an in-line result. The sale of the Allara St lease to the DoE removes FY16 expiries and provides for more earnings certainty in FY16-17.
54	a2 Milk Company	ATM.NZ	in line	0	0	n/a	n/a	A2's strong result was in line with recent guidance. FY16 guidance was reiterated and brokers see international penetration continuing. A2 has not since heard from rejected takover bidders. Two Buys, one Hold.
55	Abacus Property Group	ABP	beat	0	0	2.80	2.82	Two brokers cover Abacus and one has updated for a beat. JP Morgan notes a volatility in earnings due to Abacus' business model making forecasting difficult, but backs management's track record and retains Hold, with Morgans on Sell.
56	Aconex	ACX	beat	0	1	3.94	4.46	Aconex' result beat forecasts and the prospectus and FY16 guidance was pleasing as well. Brokers are drawn to the company's growth prospects, scalability and industry dynamics but valuation is as issue. One subsequent downgrade to Hold makes two, with two Buys.
57	Acrux	ACR	miss	0	0	0.85	0.63	Only one broker covers Acrux and the result missed Morgans, due to lower royalty revenue and a higher cost base. The timing on when Acrux' investments will deliver a return is hard to gauge so the broker retains Hold.
58	Adairs	ADH	beat	0	0	3.18	3.22	Adairs' maiden result was particularly strong and beat both covering brokers. The only susprise is no upgrade to prospectus FY16 forecasts. Brokers expect upside and both retain Buy.
59	Adelaide Brighton	ABC	in line	0	0	4.14	4.27	Adelaide Brighton's result was in line but when adjusted for property revaulations and acquisitions, growth was subdued. The special dividend was a nice surprise. Strong cash flow and upside from infrastructure spend provide support but the market is too enthusiastic. Six Holds, two Sells.
60	AGL Energy	AGL	in line	0	0	16.31	16.51	AGL's result hit the top end of guidance but was in line with most brokers, with wholesale electricity performing well and wholesale gas also contributing. Earnings momentum is expected to continue but brokers await FY16 guidance at the AGM. Two Buys, four Holds, one Sell.
61	Ainsworth Game Technology	AGI	in line	0	0	3.58	3.73	Ainsworth is covered by two brokers and the result missed one and beat the other, so we'll call it in line. Domestic operations disappointed but US outperformed and both brokers retain Buy, expecting earnings growth in FY16.
62	Air New Zealand	AIZ	in line	1	0	n/a	n/a	Air NZ's result was strong and in line with recent guidance, even if there was variation among broker forecasts. Low fuel prices support strong FY16 guidance and while Credit Suisse has upgraded to Hold, the broker highlights possible competition pressures. Otherwise, three Buys.
63	ALE Property Group	LEP	miss	1	0	3.11	3.40	Two brokers cover ALE for one in-line and one slight miss, so we'll call it a net miss. ALE has flagged increasing dividends ahead of its 2018 rent review which is enough for Macquarie to upgrade to Buy but can't move JP Morgan off Sell.
64	Alliance Aviation Services	AQZ	in line	0	0	0.80	0.80	Alliance' result was in line with Credit Suisse, the one broker covering the stock. While recent announcements have been positive, the broker still sees risk in the loss of resurce sector clients, but maintains Buy nonetheless.
65	Altium	ALU	in line	0	0	5.60	5.60	Altium's result was in line with the pre-release. One broker covers the stock and organic growth and new products should support upgraded FY16 guidance, underpinned by a strong balance sheet, Deutsche suggests. Buy retained.
66	Alumina	AWC	beat	1	0	1.91	1.88	While Alumina Ltd's result came in above and below forecasts, the extent of the dividend surprised all so we'll call it a beat, with more of the same expected. It's enough for Macquarie to upgrade to Buy to make six on cheap valuation, given alumina prices are expected to remain under pressure. Also one Hold and one Sell.
67	Amaysim Australia	AYS	beat	0	0	2.45	2.45	Amaysim beat its prospectus but there were few other surprises given only recently listing. Macquarie, the one broker covering the stock, sees rapid growth potential ahead and retains Buy.
68	Amcor	AMC	in line	2	0	14.48	14.42	Amcor's result was roughly in line with forecasts and typically solid, featuring strong cash flow. Currency headwinds remain and only modest earnings growth is expected ahead but their defensive quality supports valuation. The currency impact has driven down the share price which results in two upgrades to Buy to make four, with three Holds.
69	AMP	AMP	in line	1	0	6.77	6.75	AMP's result was in line and the company's main drivers are performing well, with strong retail funds flow and stable margins the highlight. Costs are coming down and brokers see no issue with valuation. One upgrade to Buy makes four with four Holds.
70	Ansell	ANN	miss	3	0	25.98	22.67	Ansell posted a small miss on its FY15 result but a big shock on FY16 guidance, leading to a share price trashing. The adverse currency impact is greater than expected and acquisitions have been masking a deteriorating underlying performance. The sell-off has nevertheless prompted three upgrades, leaving two Buys and six Holds.
71	AP Eagers	APE	in line	1	0	8.63	9.85	Valuation has been an issue for brokers given AP Eagers' strong share price performance, but Morgans has broken ranks and upgraded to Buy, leaving two other Holds, due to such an exceptional result. It was nevertheless in line with updated guidance and acquisitions will be needed to sustain growth levels, brokers suggest.
72	APA Group	APA	in line	1	0	9.22	9.33	APA's result and dividend were in line. Brokers were a little puzzled with slightly weaker guidance including only a flat dividend but suggest conservatism and expect upgrades. A strong balance sheet leaves APA well positioned for growth. One upgrade to Hold makes three, with five Buys.
73	APN News & Media	APN	miss	2	0	0.95	0.85	APN slightly missed some brokers so we'll call it a miss. Conditions remain challenging but Radio now provides the bulk of earnings while print media continues to decline. Brokers see a subdued FY16 but the share price sell-off sees two upgrades to Buy to make five, with two Holds.
74	APN Outdoor Group	APO	beat	0	0	3.35	3.72	APN Outdoor's result blew away brokers and the prospectus thanks to strong demand for outdoor advertising and digital conversion. With a high level of fixed costs, the company is in an earnings sweet spot. Three from three Buys.
75	ARB Corp	ARB	beat	0	0	12.42	13.09	ARB just scraped in for a slight beat with a bit of help from the A$, following strong second half improvement. Management suggests challenging conditions ahead while at the same time guiding to 11% sales growth in FY16, endorsed by brokers. Thereafter it's just a matter of valuation, given five from five Holds.
76	Ardent Leisure Group	AAD	in line	1	0	2.23	2.57	Ardent's FY15 result was in line, which is a big improvement on the interim. But Main Event was the sole driver, with other businesses flat and gyms continuing to drag. Gyms showed signs of stabilisation but only UBS is yet prepared to break ranks and upgrade to Buy, with four Holds.
77	Arrium	ARI	beat	0	0	0.18	0.14	Arrium's result was a slight beat on recently downgraded guidance, however consumables carried the can with steel still providing the drag. Debt remains an issue and brokers await the outcome of the strategic review now underway. Six Holds, two Sells.
78	Asaleo Care	AHY	beat	1	0	2.00	1.93	Asaleo's result hit the upper end of guidance and beat two of three brokers. As the third has upgraded to Buy, to make three, we'll call it a beat. The buyback was a positive surprise and brokers otherwise cite resilent earnings and strong cash flow.
79	Asciano Group	AIO	beat	0	2	7.93	8.53	Asciano posted a beat but it's academic in the wake of the Brookfield offer, which the board has endorsed. Two downgrades to Hold on the offer makes five with three Buys.
80	Asia Pacific Data Centre	AJD	in line	0	0	1.31	1.34	Asia Pacific's result was in line but positive revaluations for all three data centres was a highlight for Morgans, the one broker covering the stock. Long term leases and an attractive yield keep the broker on Buy.
81	Astro Japan Property	AJA	miss	0	0	4.81	5.66	Astro's result was a slight miss on JP Morgan, the one broker covering the stock, but the dividend was in line. The broker calculates Astro trades at a 30% discount to NTA and retains Buy.
82	ASX	ASX	in line	0	1	41.12	40.62	ASX' result was in line. Brokers considered the stock overvalued before the result and ongoing headwinds and increased investment expense have done nothing to change that view. One downgrade to Sell makes four, with four Holds.
83	Atlas Iron	AGO	miss	0	0	0.15	0.13	Atlas appears to have caught brokers out with an unscheduled report, meaning only two brokers have updated so far. The result missed both. The company has guided to a US$50/t breakeven iron ore price but brokers remain concerned over significant debt, despite the raising. Two Holds and three Buys retained so far.
84	Aurizon Holdings	AZJ	in line	0	0	5.42	5.47	Aurizon's result was roughly in line, but the surprise came from an increase in the dividend payout ratio to 70-100%. While pleasing for shareholders, the increase reflects a dearth of revenue growth opportunity ahead for the company's maturing network. Cost reductions will be left to drive earnings. Four Buys, four Holds.
85	Ausenco	AAX	in line	0	0	0.74	0.45	Ausenco had pre-released and both brokers covering the stock note the company is well positioned for a sector recovery, whenever that may be. Cost controls will help and on valuation, Morgans retains a speculative Buy while Deutsche sticks to Hold.
86	Austal	ASB	beat	0	0	2.00	2.12	Austal's result was in line with Macquarie and beat JP Morgan for a net beat. Both brokers retain Buy. A strong pipeline leaves brokers confident in FY16 growth and a strong balance sheet makes M&A a possibility.
87	Automotive Holdings Group	AHG	beat	0	1	4.28	4.37	Auto Holdings' result beat most brokers, but it was up to the Auto division to carry a weaker than expected Logistics result. This is a little concerning, and several brokers believe it will be tough to sustain strong margins in FY16, and that the stock is well valued. One downgrade to Hold makes four, with three Buys.
88	Aveo Group	AOG	in line	0	0	3.01	3.14	Aveo's result was strong and largely in line with three covering brokers. All see ongoing significant growth in FY16 as the company shifts towards being a pure-play retirement operator. Three from three Buys.
89	AWE	AWE	miss	0	0	1.50	1.29	AWE posted a solid miss on weak oil prices and impairments. The good news is cash flow an capex were in line and debt is still reasonable. AWE is planning cost cuts which may help pending Ande Ande and Perth Basin development but asset farm-downs are also an option. Most brokers await new news, hence four Holds and three Buys.
90	BC Iron	BCI	miss	1	0	0.35	0.33	Impairments, thanks to lower iron ore prices, led BC Iron to a clear miss. The company is nevertheless debt free and trading below cash backing, with Iron valley offering longer term upside. One upgrade to Hold makes two, with one Buy.
91	Beach Energy	BPT	in line	1	0	1.00	0.85	Beach effectively posted a miss but given this was pre-released, the official result was in line. The dividend cut will not be popular but brokers support management's desire to retain balance sheet capacity at a time of low oil prices, providing the power to capitalise on opportunities. One upgrade to Buy makes two, with four Holds and a Sell.
92	Beacon Lighting Group	BLX	beat	0	0	1.89	2.14	Beacon's result beat Morgans, the one broker covering the stock. No formal guidance was provided other than a favourable outlook, and the broker expects another strong year. Hold retained.
93	Bellamy's Australia	BAL	beat	0	0	4.55	6.15	Bellamy's maiden full-year result blew away Morgans, the one broker covering the stock, on every metric. Distribution channels rose in Australia and Asia and a strong balance sheet and much increased cash flow bode well for ambitious acquisitions. Buy retained.
94	Bendigo & Adelaide Bank	BEN	miss	0	1	12.78	12.36	Bendelaide's result was in line at face value but disappointed on the underlying, so we'll call it a miss. Margins were weak and impairments concerning and given mortgage competition from the big banks, brokers are wondering why BEN won't join in the repricing. One downgrade to Hold makes six, with two Sells.
95	BHP Billiton	BHP	miss	0	0	30.86	30.13	BHP's result represented small net miss, marred by weak commodity prices. Dividend concern has been allayed by announced solid capex cuts which provide sufficient progressive payout support through FY17. This good news keeps four brokers on Buy while the weak commodity price outlook keeps four on Hold.
96	BigAir Group	BGL	beat	0	0	0.97	1.00	It was messy, given new acquisitions and investment in infrastructure, but BigAir's underlying result beat both covering brokers, who both retain Buy. Organic growth was solid and should continue to be so over the next three years.
97	Blackmores	BKL	beat	0	0	62.89	81.86	Blackmores has continued to blow away forecasts and might dismiss valuation concerns, except that the stock price keeps going up. JP Morgan cannot argue with growth potential and retains Buy while Morgans remains stuck on valuation and a Hold rating.
98	BlueScope Steel	BSL	beat	0	0	5.01	5.22	Bluescope posted a solid beat as steel cost reductions improved margins. It's the company's best result for some time but more important to brokers is a planned restructure, which will either see costs cut significantly or Port Kembla shut down. Brokers support this news and retain seven Buys and one Hold.
99	Boart Longyear	BLY	miss	0	0	0.19	0.10	There is only one broker left covering Boart and while the company's loss was not as bad as UBS had forecast, earnings fell a long way short in a messy result. Boart is well positioned for an industry recovery but as to when this might happen is anyone's guess. Hold retained.
100	Bradken	BKN	in line	0	1	2.00	1.74	Bradken had previously issued a warning so no surprises, although Morgan Stanley expected more and has downgraded to Hold. The result is clouded by no update on the merger proposal and otherwise brokers see the outlook for capital goods as remaining challenging, albeit consumables provide some offset. Six from six Holds.