analysts

UBS raises Incitec (IPL.AU) to Buy from Neutral after IPL cut its FY09 profit guidance to A$450 million, "broadly in line" with UBS' forecast, reflecting downgraded fertilizer price assumptions and a lower explosives growth. The one-year Moranbah plant delay is a surprise, although a positive outcome for the regional explosives industry, UBS says in a client note, cutting its FY10 and FY11 net profit forecasts by 5.3% to A$416 million and by 1.8% to A$476 million, respectively. Expects fertilizer price volatility to continue through 2009, but forecasts incorporate long run average pricing, leaving more upside than downside risk, UBS says. Risks also from the Dyno business targeting a near doubling in earnings through cost cutting and execution risk on Moranbah plant. "However, we view the current share price as providing a sufficient discount for these risks." Keeps A$3.00 target. Last trade A$1.78. (ABH)