citi upgrades iluka

Citi upgrades Iluka (ILU.AU) to buy from hold on expectation of a jump in demand for its products. "We expect the violent restocking we have seen in other commodities to now progress to the later cycle titanium dioxide/zircon markets and with limited inventory overhang compared to previous cycles there is significant upside risk to prices," Citi says. Says ILU's 1H09 loss was largely in line once one offs are stripped out and reflects an unprecedented collapse in demand. Target price upped to A$4.80 from A$4.10. Merrill Lynch says the results beat its forecasts; maintains buy rating with A$4.60 target, says end of destocking could set the scene for a significant rally for ILU. RBS says result was messy; maintains hold and ups target to A$3.36 from A$3.21, says it remains cautious on the move from destocking to restocking. ILU last traded at A$3.65. (APW