RBS Australia 29/01/2010 1 Upgrade to Buy from Hold $60.00...

RBS Australia 29/01/2010 1 Upgrade to Buy from Hold $60.00 17.5%
Target $60.00 (was $50.00). The broker has lifted its earnings forecasts for the group to reflect lower bad debt assumptions and expectations of higher IPO and M&A revenues.

THe changes mean an increase in price target and this supports the broker's upgrade to a Buy rating.

BA-Merrill Lynch 29/01/2010 1 Upgrade to Buy from Neutral $70.00 37.0%
The broker notes that after a Following a significant reshaping of the business, the stock still trades as if a return to high-teen return on equity is unlikely.

However, Merills is of the opinion that a combination of market conditions, payoffs from recent investments and improving revenue productivity from staff will carry the group back toward the high-teens.

In fact, the broker notes that Macquarie posted three straight years of outperformance after bottoming in the last down-cycle.

FY10-11 EPS is lifted by 8% and 12%, which equates to around 30% per year EPS growth from 2010-12. The improved view sees the broker upgrade its recommendation to Buy from Neutral, with the target price lifting to $70.00 (from $60.60).