daytrading july 25 afternoon

Afternoon all,

Thanks Endless, Gttrain, Trees, Suzie and to all regulars.
FYI: Half of this are broker reports.

Australian stocks are lower, with big miners leading the fall after disappointing earnings weighed on Wall Street. The All Ords were trading at 5007, down -15 points or -0.3%.

In local news, troubled gold miner Newcrest has flagged lower production in the September quarter after a strong lift to gold and copper output in the June quarter.
In the June quarter gold output rose 25 per cent to 642,032 ounces with copper up 20 per cent at 22,818 tonnes.

Newcrest flagged the lower production in the September quarter in its latest quarterly production report issued this morning, but with output for the full year to June, 2014 to come in between 2-2.3 million ounces. In the year to June, 2013, Newcrest produced 2.11 million ounces of gold.

Its all-in cash production cost was a high $1283 an ounce, signalling the group is barely profitable at present, since the gold price is trading at around $US1300 an ounce.
Macquarie has affirmed its guidance for stronger profits in the year ahead, saying its first quarter earnings had been given a boost from its funds management arm.

The home-grown investment bank today said operating profits in the first quarter had risen after a "subdued" period in the prior three months.

Macquarie funds group, which is playing a growing role in the group's profits, enjoyed a $35.8 billion increase in funds under management, which hit $379.3 billion.

"Macquarie's annuity-style busineses are up on 1Q13 and prior quarter, with a strong performance from Macquarie Funds Group," chief executive Nicholas Moore said.

Macquarie is also benefiting from the weaker Australian dollar - as more than 60 per cent of its profits come from overseas. Mr Moore said that a 10 per cent fall in the Aussie dollar tended to lift earnings by 6 per cent.
Shares are down 2.3 per cent in early trade - it seems investors had been hoping for a small upgrade in guidance.

But the biggest loser this morning among the top 200 is salary packaging company McMillan Shakespeare.

Its shares have more than halved in value, down 51 per cent at $7.42, after a one-week suspension following proposed tax changes for novated vehicle leases.

Another big loser this morning is engineering company Ausenco after it downgraded its earnings forecast, with shares diving 30.9 per cent to $1.49.‘‘That’s a business that’s been promising a turnaround for a while,’’ Invast Securities chief market analyst Peter Esho says. ‘‘They have been really battling against the tide in an industry where there’s been downgrades right across, and they’ve been caught out.’’

Another loser on the share market today has been miner OZ Minerals, which dropped 6.3 per cent to $4.35.

It's after OZ Minerals said production for the year was expected to be weighted to the second half, with annual copper production and cost guidance unchanged.

China will not remove the ceiling on bank deposit rates soon as a deposit insurance system should be in place before that will happen, the China Securities Journal is reporting, citing a former central bank vice governor.
The scrapping of a ceiling on deposit rates would be the final step in China's interest rate liberalisation but that is unlikely to happen either this year or the next, Wu Xiaoling, former vice governor of the People's Bank of China, was quoted as saying by the official newspaper.

China's central bank removed controls on bank lending rates last week in a long-awaited move that signals the new leadership's determination to carry out market-oriented reforms and will help lower financial costs for companies. The central bank has said that it planned to free up deposit rates eventually, but now was not the right time.

Wu said a sudden lifting of the deposit rate ceiling would likely result in rate wars among financial institutions to woo depositors, threatening the survival of small lenders.

Some good news for US and European manufacturers. The latest round of manufacturing data out overnight has shown that private industry in the euro zone expanded for the first time in more than a year in July. It also a good month for US factories.

The jump in Markit's "flash" Eurozone Composite PMI to 50.4, which marked the first expansion since January, 2012, should hearten European Central Bank policymakers who have promised to do whatever it takes to pull the 17-country euro zone out of the longest recession in the bloc's history.

Markit's "flash" US Manufacturing Purchasing Managers Index rose to 53.2, a four-month high, while output also was at its strongest since March. Increased workloads also encouraged firms to take on workers again after reducing payrolls in June, though the pace of hiring remained sluggish.

"For the US, this shows manufacturing will do a little better now after a bout of weakness earlier this year," said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut, though he added growth in the sector is "not exactly robust".

But data yesterday showing China's factories lost momentum again this month dulled the good news in Europe and boded ill for companies exposed to the world's second largest economy.

The dollar is continuing its slide, which started yesterday after weak Chinese manufacturing data. The currency is buying 91.42 US cent, down more than a cent from late yesterday.

Australian households have housing debt levels that are high by international standards, but income and asset characteristics of relevant households suggest that they can service the debt comfortably, CBA economist Michael Workman writes in a note:

·Housing loans make up the largest component of household debt while housing is generally the largest asset.
·In the past few years Australian households have become more cautious about committing to higher housing debt and continue to save slightly more than 10% of their income, the highest level since the 1980s.
·The current period of low interest rates has seen households consolidating their balance sheets. Gradually rising housing prices should enhance their net asset positions.
·One of the more interesting recent trends is that households have alsoincreased their housing debt prepayments over 2012 and 2013, by leaving their repayments unchanged while interest rates fell. It is in line with the inclination to reduce housing and credit card debt since the GFC.
·Combined, these more cautionary shifts provide households with an important buffer to any negative economic shocks.

The dollar also touched a 4 1/2- year low versus the kiwi, after the Reserve Bank of New Zealand flagged a need to remove stimulus and drove a divergence in monetary policy prospects for the two countries.

Governor Graeme Wheeler this morning said a removal of monetary stimulus ‘‘will likely be needed in the future’’ following a policy review.

‘‘New Zealand’s Reserve Bank has told us that they’re going to tighten explicitly, no ifs or buts, while the RBA remains with an easing bias,’’ says Westpac markets strategist Imre Speizer. ‘‘That’s as clear a divergence as you have between two close central banks. The pressure from the markets would be to the upside for the kiwi currency, particularly against the crosses.’’

The dollar is down 0.7 per cent to $NZ1.1469, after earlier touching $NZ1.1462, a level unseen since November 2008. Westpac sees the currency falling to $NZ1.11 in coming months.

Here's a good chart on the divergence between the Australian and New Zealand dollars over the past few days.

The Australian dollar has fallen to a 4½-year low against the New Zealand dollar as interest rates expectations in both countries diverge.

While the market is expecting further rate cuts to come from the Reserve Bank of Australia, perhaps as soon as August, it is also that the New Zealand's central bank next move is up, not down.

That's following the NZ Reserve Bank Gareme Wheeler's statement that a removal of monetary stimulus ''will likely be needed in the future'' following his board's decision to keep rates on hold at 2.5 per cent.

"New Zealand's Reserve Bank has told us that they're going to tighten explicitly, no ifs or buts, while the RBA remains with an easing bias," said Westpac's Auckland-based markets strategist Imre Speizer.

"That's as clear a divergence as you have between two close central banks. The pressure from the markets would be to the upside for the kiwi currency, particularly against the crosses."

For some reason, this chart is showing as a small image. Hope it's viewable.

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TODAY’S FINANCIAL CALENDAR:

·(EZ) - Germany IFO business survey, Jul
·(NZ) - RBNZ policy decision
·(UK) - GDP, Q2
·(US) - durable goods, Jun
·(CLQ) - EGM
·(DLS) - quarterly production report
·(EDE) - AGM
·(MQG) - AGM
·(NCM) - quarterly production report
·(OGC) - Interim Results
·(OZL) - quarterly production report
·(WHN) - AGM

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Here's a quick look at markets around the region:.

·Nikkei(Japan): -0.42%
·Shanghai: -0.24%
·Taiwan: -0.19%
·South Korea: -0.16%
·Singapore: -0.69%
·New Zealand: -0.44%

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THE OVERNIGHT REPORT: STILL STRUGGLING

The Dow closed down 25 points, or 0.2%, while the S&P lost 0.4% to 1685 and the Nasdaq was flat.

There were a few melted brains on Aussie dollar spot desks around the world yesterday, as evident by the currency’s reaction to a combination of the local CPI data release and HSBC’s Chinese PMI.

The June quarter headline CPI came in at 0.6%, ahead of 0.5% expectation (Buy!), but the annual rate of 2.4% fell short of the 2.5% expectation (Sell!). These numbers are not as relevant as the core CPI numbers, which repeated the same outcome (0.6% and 2.4% against 0.5% and 2.5% expectation). Then just to add colour, HSBC’s flash estimate of China’s July manufacturing PMI registered an eleven month low of 47.7, down from June 48.2 (OMG, sell!).

The general feeling among economists is that the local CPI results neither ensure nor dismiss a rate cut from the RBA in August. As to whether the Chinese PMI is enough to spark the central bank into action is another matter. There are a couple of complications. Firstly, if Kevin Rudd calls the election in August the RBA may wish to stay put lest it be accused of being politically influenced. Secondly, the Chinese premier has now put a 7% floor under Chinese GDP slowdown, which might be enough to keep the RBA on the sidelines. Thirdly, while China’s PMI was weak the US equivalent showed an increase to 53.2 from 51.9 to mark a four year high, and the eurozone equivalent (ring the bells, sound the trumpets!) showed a rise to 50.4 from 48.7 – the first sign of expansion in nineteen months.

Then there’s the small issue of the abovementioned Aussie dollar reaction. The Chinese PMI is the critical factor behind the Aussie’s 1.4% to US$0.9167 decline over 24 hours, aided by the benign CPI result, and by the fact the US dollar index is up 0.4% to 82.29 on the strength of the US PMI. The lower the Aussie falls, the more the RBA will worry about inflation and thus refrain from cutting. The Aussie has not yet broken out of its recent range, nevertheless.

The ASX 200 was up 36 points ahead of yesterday’s data, fell to be up only around 5 points just after midday and closed up 18. There was little panic in China, with the Shanghai index down only 0.5%. When all is said and done, the only shock possible from yesterday’s Chinese PMI was an increase. The decrease fits in with the current trend on both PMI and GDP, and now that Li Keqiang has drawn the line (implying stimulus will indeed be deployed if necessary) we can perhaps call the July PMI “old news”, even if we see an even lower number in August.

Perhaps that’s what the afternoon drift-up in the ASX 200 was telling us, and the fact the SPI Overnight is up 6 points despite the S&P 500 being down 0.4%.

The weakness on Wall Street is attributable to a balance of the strong PMI, an 8.3% jump in June new home sales and some positive earnings reports posted last night, offset by some negative earnings reports, a weak response to the Treasury’s five-year note auction, and the fact the indices are looking just a little toppy up here in the rarefied air.

The big up-mover in the session was Apple, which reported after the bell on Tuesday and posted a 5% gain last night. A positive response was also enjoyed by Dow component Ford (up 2.5%), while Dow components Caterpillar (down 2.4%) and AT&T (down 1%) disappointed. Boeing posted a strong result, but still lost ground, and Visa was among the non-Dow stocks suffering slight weakness. The good news is that the earnings growth run-rate for the S&P 500 at this stage of the season is 4.6%, which is above earlier forecasts.

And there was more good news after the bell. If Apple is the stock US investors love to love, Facebook is the stock they love to hate. Let’s just say Facebook’s result was well received, as the stock is up 18% in the aftermarket.

Back on Planet Earth, LME traders were caught between a negative PMI from China and positive PMIs from the US and Europe. Base metals movements were thus mixed, with copper down 0.5%, but nickel up 1.4%. The oils were mostly focused on China nevertheless, and the implications of a weak result from Caterpillar, and not to mention that the oils have run up hard on Egyptian unrest of late. Brent fell US$1.25 to US$107.19/bbl and West Texas fell US$1.84 to US$105.39/bbl.

Spot iron ore doesn’t pay any attention to economic data, and it is up US20c to US$132.10.

Wall Street pays attention to the US bond market however, albeit with bond yields having drifted back down as the Fed dust has settled, stock market types have been mostly focused on earnings. On Tuesday the response to a Treasury auction of two-year notes was lacklustre and last night buyers were even less keen on the five-years on offer. Whether or not the Fed tapering begins this year or next, the bond market has basically decided it will start one day and hence there’s little upside in bond investment. Last night the benchmark ten-year yield rose 7 basis points to 2.59%.

Wall Street watches bond yields because if that ten-year yield rises to meet or exceed the average S&P 500 dividend yield, yield stocks become less attractive. Thus weighing on the indices last night was weakness in utilities and other defensives.

Gold succumbed to the stronger greenback and rising bond yields after its big jump on Tuesday night, falling US$20.90 to US$1322.240/oz.

The UK will release its first estimate of June quarter GDP tonight, while the German IFO business sentiment survey will garner close attention. The US sees durable goods orders.

US earnings reports are due from 3M (Dow) along with Colgate-Palmolive, General Motors and Starbucks.

On the local stock front, Drillsearch (DLS), Newcrest (NCM) and OZ Minerals (OZL) will all post production reports and OceanaGold (OGC) will provide its results.

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BROKER ALERTS (8 x AGO, 2 x PAN, 1 x MBN, 2 x MMS 1 x SIR, 4 x SXY)

JP Morgan rates AGO as Downgrade to Neutral from Overweight (3) -

Sales and production were in line with guidance in the final quarter of FY13. The broker finds guidance for FY14 underwhelming as it reflects reduced reserves and a shortened mine life at Pardoo. There is also significant uncertainty about how Atlas will unlock the value of its port allocation beyond Horizon 1.

In the current risk averse environment the broker believes the market is not likely to pay full value for large-scale development projects. The reducing contribution from these projects lowers the price target to $1.00 from $1.30 and the rating is downgraded to Neutral from Overweight.

Target price is $1.00 Current Price is $0.91 Difference: $0.09

If AGO meets the JP Morgan target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June. JP Morgan forecasts a full year FY13 dividend of 4.00 cents and EPS of minus 24.00 cents. At the last closing share price the estimated dividend yield is 4.40%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.79.

Market Sentiment: 0.4

Deutsche Bank rates AGO as Hold (3) -

The June quarter was in line with the broker's forecasts. Product grade will continue with its modest decline and the average reserve grade has declined across the Horizon 1 deposits by around 0.5% iron.

Further progress on the Horizon II deposits continues and is required in order to finalise a rail access agreement. The broker retains a Hold on valuation. The price target is revised down to $1.07 from $1.12.

Target price is $1.07 Current Price is $0.91 Difference: $0.16
If AGO meets the Deutsche Bank target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Deutsche Bank forecasts a full year FY13 dividend of 0.00 cents and EPS of 3.00 cents.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.33.

Market Sentiment: 0.4

Credit Suisse rates AGO as Downgrade to Neutral from Outperform (3) -

Target $1.00 (was $1.05). June quarter shipments were in-line with the broker and the cash position was $62mn ahead of forecast. That’s the good news. The big negative was lower sales growth going forward. Pardoo is to be idled 18 months ahead of schedule on water issues and this will reduce mid-term shipments growth. Horizon 1 shipments have also been cut by 1Mtpa back to 14Mtpa.

Forecasts are trimmed, the price target is lowered and the recommendation downgraded to Neutral in response.

Target price is $1.00 Current Price is $0.91 Difference: $0.09

If AGO meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Credit Suisse forecasts a full year FY13 dividend of 3.00 cents and EPS of 5.40 cents. At the last closing share price the estimated dividend yield is 3.30%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.85.

Market Sentiment: 0.4

BA-Merrill Lynch rates AGO as Buy, High Risk (1) -

The June quarter saw record production, which brought FY production in on target, albeit it at the low end. Cash costs were also within guidance, but in this case at the top end.

FY14-15 earnings forecasts are trimmed a little and FY13 and FY16 are lifted a little on new guidance. The Buy call and $1.86 price target are maintained.

Target price is $1.86 Current Price is $0.91 Difference: $0.95

If AGO meets the BA-Merrill Lynch target it will return approximately 104% (excluding dividends, fees and charges).

The company's fiscal year ends in June. BA-Merrill Lynch forecasts a full year FY13 dividend of 3.00 cents and EPS of 28.50 cents. At the last closing share price the estimated dividend yield is 3.30%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.19.

Market Sentiment: 0.6

CIMB Securities rates AGO as Outperform (1) -

Atlas Iron had a record quarter for sales of iron ore in June - 2.2wmt, which takes the total for FY13 to 7.4wmt. CIMB has reiterated the Outperform rating, with 44% potential upside to the target price of $1.20.

FY13 FOB cash costs of $49-50/t were at the upper end of guidance. CIMB has reduced the FY13 earnings estimate by 21% following the mark to market of iron ore prices for the second quarter. FY14 and FY15 forecasts are maintained as near-term mine closures of Mt Dove and Pardoo are offset by the ramp up of Abydos and Mt Webber.

Despite ongoing uncertainty regarding execution of the Horizon 2-30mtpa strategy, the broker thinks the current share price is trading at a material discount to valuation in terms of the initial Horizon 12-14mtpa strategy, which has largely been de-risked.

Target price is $1.20 Current Price is $0.91 Difference: $0.29

If AGO meets the CIMB Securities target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June. CIMB Securities forecasts a full year FY13 dividend of 3.00 cents and EPS of 6.00 cents. At the last closing share price the estimated dividend yield is 3.30%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.17.

Market Sentiment: 0.6


Citi rates AGO as Buy (1) -

June quarter production and shipments were both in line with Citi, although the broker’s FY13 earnings forecasts are reduced to account for a lower realised price and higher D&A. The broker notes the company still has $417m in cash and thus remains well funded to complete growth projects to expand production to beyond 12mtpa.

It will not be an easy ask, however, the broker noting that the type of growth envisioned would require access to rail, something yet to be secured. The Buy call and $1.10 target price are maintained.

Target price is $1.10 Current Price is $0.91 Difference: $0.19

If AGO meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Citi forecasts a full year FY13 dividend of 3.00 cents and EPS of 6.00 cents. At the last closing share price the estimated dividend yield is 3.30%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.17.

Market Sentiment: 0.6

Macquarie rates AGO as Neutral (3) -

Atlas Iron reported June quarter production results with shipments of 2.2wmt broadly in line with the broker's expectations. The company is comfortably cash flow positive. Incorporating FY14 production and cost guidance has translated to 2-30% cuts to Macquarie's earnings forecasts. The broker has factored in higher operating costs in the medium-term.

The price target is unchanged at $1.00. Atlas Iron looks cheap on earnings multiples if it can deliver successfully on growth projects and Macquarie believes there is sufficient risk around both the delivery schedule and capital cost to maintain a Neutral stance. This is despite the value proposition should the company hit its growth targets.

Target price is $1.00 Current Price is $0.91 Difference: $0.09

If AGO meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Macquarie forecasts a full year FY13 dividend of 3.00 cents and EPS of 2.60 cents. At the last closing share price the estimated dividend yield is 3.30%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.00.

Market Sentiment: 0.6

UBS rates AGO as Neutral (3) -

Shipments in the quarter were20% on the prior quarter and came in 1% ahead of the broker’s estimates. FY 13 shipments added up to 7.4Mt, which was also in line with guidance.

Guidance for higher costs and lower production has weighed on FY 14 earnings, as has the prospect of higher D&A changes has taken a toll on forecasts, FY13-14 earnings forecasts are cut by 35% and 22%. The Neutral call and 85c price target are maintained.

Target price is $0.85 Current Price is $0.91 Difference: minus $0.06 (current price is over target).

If AGO meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June. UBS forecasts a full year FY13 dividend of 0.00 cents and EPS of 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.33.

Market Sentiment: 0.6

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Credit Suisse rates MBN as Neutral (3) -

It was a weak quarter, mostly because of low recoveries given mined tonnes came from the central pit. Thus, lower grade stockpiled ore had to be blended with central zone ore in order to reduce magnesium levels. Unit cash cost were also high, but this was expected given already known operational issues and lower output.

Explosives are also running out and this is also limiting material movement and ore production. Management says this should be sorted by the end of the month, but CS doesn’t know. The Neutral call is maintained, with a better nickel prices needed to justify anything higher.
Target price is $0.10 Current Price is $0.08 Difference: $0.02

If MBN meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in December. Credit Suisse forecasts a full year FY13 dividend of 0.00 cents and EPS of minus 7.36 cents.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.09.

Market Sentiment: 0.3

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BA-Merrill Lynch rates MMS as Downgrade to Underperform from Buy (5) -

Target $6.00 (was $15.50). The broker believes proposed changes to tax laws for novated leases will begin impacting earnings immediately and heavily given the company’s utter reliance on this space to both generate profit and to grow into new markets.

FY14-15 earnings forecasts are cut by 52% and 64, the broker thinking the market will price this development in pretty quick once the stock starts trading. The recommendation is taken all the way down to Underperform from Buy, the broker pointing to the prospect a risk profile that has increased exponentially.

Target price is $6.00 Current Price is $15.36 Difference: minus $9.36 (current price is over target).

If MMS meets the BA-Merrill Lynch target it will return approximately minus 61% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June. BA-Merrill Lynch forecasts a full year FY13 dividend of 24.00 cents and EPS of 84.00 cents. At the last closing share price the estimated dividend yield is 1.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.29.

Market Sentiment: -1.0

Citi rates MMS as Downgrade to Sell from Neutral (5) -

Target $12.60 (was $16.62). The company has pre-announced its unaudited FY13 result, reporting revenue of $331m to bring in a $62m net profit. The company also said it was not in a position to provide guidance for the 2H13 dividend. The problem, proposed changes to fringe benefit taxes on autos.

FY13-15 EPS forecasts are cut by 4%, 37% and 38% on the FBT ambiguity, which serves to pull the price target lower. The broker has also opted to get ahead of the swing, downgrading its recommendation to Sell.

Target price is $12.60 Current Price is $15.36 Difference: minus $2.76 (current price is over target).

If MMS meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June. Citi forecasts a full year FY13 dividend of 53.00 cents and EPS of 82.90 cents. At the last closing share price the estimated dividend yield is 3.45%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.53.

Market Sentiment: -1.0

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UBS rates SIR as Buy (1) -

Target $3.20 (was $3.30). The June quarter report was pretty much in line with the broker and there are only very minor changes to assumptions. The broker explains that given first production is not expected until 2016, EPS forecasts for those periods have little relevance at the moment.

The Buy call maintained, thinking another Kambalda or Falconbridge could be in the works with a little bit of luck. Given the quality and strategic nature of the nickel in concentrate from the Nova project, UBS thinks corporate appeal will only increase.

Target price is $3.20 Current Price is $2.37 Difference: $0.83
If SIR meets the UBS target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June. UBS forecasts a full year FY13 dividend of 0.00 cents and EPS of minus 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 26.33.

Market Sentiment: 1.0

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Citi rates SXY as Neutral (3) -

Target $0.80 (wasd $0.79). 4Q production came in 5% short of the last quarter and 11% below Citi’s estimates. Sales missed by 14% and revenue by 4%.

Slightly lower exploration expenses see FY13 net profit tweaked a bit higher, although FY14 numbers are down a little on deferred CSM revenues. The Neutral call is maintained, the broker not counting the upside from unconventional gas, but rather more conventional resources like Hornet and ongoing and increasing oil production from Western Flank.

Target price is $0.80 Current Price is $0.73 Difference: $0.075
If SXY meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Citi forecasts a full year FY13 dividend of 0.00 cents and EPS of 4.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.26.

Market Sentiment: 0.8

Credit Suisse rates SXY as Outperform (1) -

Target $0.85 (was $0.80) FY13 production was in-line with the broker, while FY14 guidance came in better than expected. The company otherwise remains debt free, sitting on $127m in cash, while capex for oil drilling is largely self-funding.

The valuation lifts on the upbeat guidance and the Outperform call is maintained, the broker seeing numerous potential catalysts.

Target price is $0.85 Current Price is $0.73 Difference: $0.125
If SXY meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Credit Suisse forecasts a full year FY13 dividend of 0.00 cents and EPS of 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.32.

Market Sentiment: 0.8

Deutsche Bank rates SXY as Buy (1) -

June quarter production was 7% above the broker's forecasts. Quarterly revenue was $33.1m, also above forecasts, because of a higher realised oil price and the stronger production.

Deutsche Bank believes the recent news on Hornet has materially increased the appeal of the company's gas acreage to potential farm-in partners. The broker's net asset value has increased because of a stronger-than-expected oil reserve upgrade and lower gas drilling expenditure for FY14.

The price target is raised to 80c from 75c and the Buy rating is retained.

Target price is $0.80 Current Price is $0.73 Difference: $0.075
If SXY meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June. Deutsche Bank forecasts a full year FY13 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.13.

Market Sentiment: 0.8

JP Morgan rates SXY as Overweight (1) -

The fourth quarter results contained few surprises for JP Morgan, except the oil price was 10% above estimates. This is unlikely to persist in the broker's view.

JP Morgan continues to like Senex for its exposure to the Cooper Basin and strategic exposure to lower unconventional gas in a higher priced east coast market. The share price has run strongly recently but the Overweight rating is maintained. The price target is raised to 87c from 82c.

Target price is $0.87 Current Price is $0.73 Difference: $0.145
If SXY meets the JP Morgan target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June. JP Morgan forecasts a full year FY13 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.13.

Market Sentiment: 0.8

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Chart Point - Gold: Technically we see more volatility, however the price action is constructive. Any dips look positive. The interesting aspect to the market is that we are trading above the break-down level this is supportive of a market that has changed its trend. Momentum indicators are toppy but nothing has been confirmed. Stops have to go in below the old low perhaps around US1180 would be a safe area.