Boral (BLD) the standout on the reporting front today (BLD, IGO)
WHAT MATTERED TODAY
Another strong day for the local market thanks to coordinated buying in the banks and the miners a theme that has played out since Monday and that’s prompted a quick +120pt rally from the recent lows, recouping the losses we saw in the market last week. Telstra (TLS) traded ex-divi today for 11cps plus franking (15.7c value) and ended down 4c, a pretty strong result really, while Westpac’s (WBC) move to increase mortgage rates to offset margin pressure (which we saw in their recent quarterly update) was applauded by the market, although I suspect borrowers won’t share the same enthusiasm.
Elsewhere, Boral (BLD) was strong on the back of good numbers, Bellamy’s (BAL) had a very volatile day after their results met market expectations, however the guidance missed the mark. The conference call obviously did the good job of talking the market around – the stock rallying ~18% from the lows to close at $11.96 while Bega (BGA) showed similar form, missing market expectations for FY18 earnings while providing no real formal guidance for FY19, however they also got the markets blood flowing on the call – ending higher on the session. The opposite played out for Independence Group (IGO) today after the market liked their result early, but sold them off sharply when more detail came to light. More on that one below.
Overall, the index closed up +47 points or +0.75% today to close at 6352.
Reporting winding down however still providing stock volatility – particularly intra-day.
For a full list of company reporting dates – click here
Ramsay Healthcare (RHC) is one we’ll be focussed on tomorrow with the market expecting…profit of A$418.3 million on core EBITDA of A$1.38 billion. And importantly, more colour around the Capio bid where reports have them likely to raise their bid price – hopefully not too far!
ASX 200 Chart
ASX 200 Chart
CATCHING OUR EYE
Broker Moves; Blackmores copping downgrades across the board this morning after rallying strongly yesterday.
Elsewhere;
· Regis Resources Upgraded to Neutral at UBS; PT A$4.20
· Regis Resources Raised to Neutral at JPMorgan; Price Target A$4
· Regis Resources Upgraded to Buy at Bell Potter; PT A$4.65
· Sigma Healthcare Downgraded to Neutral at Citi; PT Set to A$0.55
· Reliance Worldwide Cut to Sell at Deutsche Bank; PT A$4.80
· Select Harvests Upgraded to Hold at Wilsons; PT A$5.74
· Caltex Australia Cut to Neutral at Credit Suisse; PT A$32.55
· Blackmores Downgraded to Underperform at Credit Suisse; PT A$130
· Blackmores Downgraded to Neutral at JPMorgan; PT A$160
· Blackmores Downgraded to Reduce at Morgans Financial; PT A$130
· RCR Tomlinson Downgraded to Neutral at JPMorgan; PT A$1.38
· SpeedCast Downgraded to Hold at Morgans Financial; PT A$4.09
· Orocobre Downgraded to Hold at Baillieu Holst Ltd; PT A$4.60
Boral (BLD) $6.95 / +10.12%; This morning Boral (BLD) reported their full year results and they were above market expectations by around 3%. Adjusted net profit after tax came in at $514m versus the markets expectation of $497m whilst most other metrics were strong. Revenue was up 34% with both the Australian and US operations ticking along nicely. The market was bearish BLD leading into this result after what seemed to be a tough year as they bedded down the $3.5bn Headwaters acquisition.
A good result from BLD today with guidance that was strong, but broadly inline with existing market expectations. Expect analysts to roll forward valuations and on the back of the beat in FY18, upgrades to flow through.
Boral (BLD) Chart
Independence Group (IGO) $4.34 / 0.7%; Nickel / gold miner Independence Group posted a bumper FY18 profit thanks to contributions from their new Nova nickel project. The stock had fallen steadily over the past few months thanks in part to a weak resources sector, but also due to the high expectations the market had held for the nickel mine. The market was forced to rebase earnings for the year at the 3rd quarter fearing numbers were too high, but a solid 4th quarter has helped the full year numbers beat the streets expectations, likely helped by higher grade nickel production in the quarter despite production numbers falling short of previous guidance.
Currently about a third of IGO’s sales are generated by gold through the Tropicana mine, however this number is falling as the company moves more towards nickel and copper. Production guidance was solid, driven by the Nova projects higher than expected run rate. We like the diversified exposure received from IGO, especially when looking for copper and nickel exposure. Both commodities have seen their fair share of weakness recently and we are looking for signs that the tide is turning. IGO has turned disappointing announcements throughout the year into a good result and we believe that their projects have turned a corner
Independence Group (IGO) Chart
OUR CALLS
No trades across the MM Portfolio’s today
Have a great night
James / Harry & the Market Matters Team
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