repercussions of guilty verdict, page-7

Just encase anyone is wondering here are some broker calls.



RBS Australia 13/11/2009 3 Hold $1.90 12.4%
Target $1.90 (was $2.29). In the broker's view the move by SP Telemedia ((SOT)) to expand via a proposed acquisition of Pipe Netorks ((PWK)) will put pressure on iiNet to do something similar, as it needs increased scale to justify upgrading its systems.

Higher marketing and promotion costs are likely to impact, and the broker has lowered its numbers to reflect this, the result being a cut in its price target.

Hold rating retained.

JP Morgan 07/10/2009 1 Overweight $2.77 63.9%
The broker notes a copyright case against the company began yesterday and it sees scope for some share price pressure as a result of negative commentary about the company until it can offer its opening remarks.

The case, which relates to illegal file sharing, is likely to impact on all internet service providers, in the broker's view.

With the stock trading at a discount to the small cap end of the market, there is no change to the Overweight rating or $2.77 price target.

Macquarie 18/08/2009 1 Outperform $2.05 21.3%
iiNet's result was in line with guidance and the broker. The broker notes iiNet's shares have run hard this year following a re-rating of the small cap sector. It still sees strong growth in FY10 but beyond that it's not so sure.

The broker is going to have a think about the effects of rising competition and broadband improvements on iiNet's latter forecasts, and report back. The rating stays in the meantime.

BA-Merrill Lynch 18/08/2009 1 Buy, High Risk $2.50 47.9%
The broker notes the result was largely in-line with its expectations and consensus. However, FY10-11 EPS estimates are cut by 2%-3%, but this is due to higher depreciation and amortisation expectations in FY10 and a higher proportion of lower margin subscribers in FY11.

Otherwise, the broker notes that not only is the stock trading on 10x FY10 earnings, it also boasts a track record of increasing both subscribers and underlying margins despite tough economic conditions.

This mix, says Merrills, "continues to look attractive". As such, the Buy call and target price are maintained post the result.