Ann: Market Update , page-37

BA-Merrill Lynch 01/03/2011 5 Underperform $0.40 - 7.0%
Sigma has reset guidance at the top end of a previously downgraded range, the broker notes, which counts as a "soft" upgrade but expectations are now for a lower dividend payout.

The broker suggests the Pfizer pullout and PBS policy are the two biggest problems facing the company. Underperform retained.


JP Morgan 01/03/2011 3 Neutral $0.42 - 2.3%
Sigma's future remains a mix of messy results, restated accounting, unfortunate industry events, but above all, the ongoing prospect for a special dividend for shareholders, at some stage. JP Morgan analysts are assuming Sigma will be able to pay out a maximum of 22c per share. They have modeled a payout of 20c thus far (was 21c previously), to be 90% franked.

The company will release its FY11 report on March 28 and judging from JPM commentary it would appear the event is bound to be a messy one, with restated accounts and goodwill impairments from past acquisitions. All in all, the stockbroker believes the shares are fairly valued and this explains why the Neutral rating remains in place.


UBS 01/03/2011 5 Sell $0.28 - 34.9%
Target $0.28 (was $0.41). The company updated on earnings and the broker has adjusted its forecasts accordingly. The cut in price target reflects an expected 17c special dividend.

Industry reforms are still to flow through and this offers cause for some caution, so post the update the broker's Sell rating is retained.



Deutsche Bank 01/03/2011 3 Hold $0.50 16.3%
Sigma's result showed the company was generating more cash than the broker expected by year end which is a positive in terms of management's restructuring. However a cautious outlook means only a modest special dividend is likely to be announced, the broker suggests.

And then there's always PBS changes to worry about. Hold retained. Target rises to 50c from 44c.