small fish - big sharks, page-11

Broker targets and commentary after FY report :

Macquarie 29/03/2011 5 Underperform $0.41 - 11.8%
Sigma's loss and special dividend payment were as expected, and the Healthcare component was pleasing, the broker suggests. With new management in charge the broker sees scope to unlock some more value.



The big "however" is, however, the perennial threat of PBS changes along with the risk of another Pfizer-style withdrawal, the broker warns. Underperform retained.

Target falls to 41c from 55c.


Citi 29/03/2011 5 Downgrade to Sell, High Risk from Hold $0.23 - 50.5%
Citi analysts comment the release of the FY11 results (year ends in January) was a "messy" exercise, but largely in line with expectations. The announcement of a 15c in special dividends was also in line.

While the special dividend is likely to support the share price in the short term, speculate the analysts, they do believe significant risks remain. To make matters worse, the analysts also believe that post the special dividend the shares actually look expensively priced.

Downgrade to Sell from Hold and the price target falls to $0.23 from $0.26.


BA-Merrill Lynch 29/03/2011 5 Underperform $0.43 - 7.5%
Target $0.43 (was $0.40). Full year earnings were slightly better than the broker had forecast but the special dividend was lower than anticipated.

PBS reforms remain a key for the earnings outlook for the company and post the result the broker retains an Underperform rating.


JP Morgan 29/03/2011 3 Neutral $0.27 - 41.9%
Target $0.27 (was $0.42). The group's earnings result was a complex one in the broker's view and has not removed all concerns about the remaining businesses in the portfolio.

The special dividend with the result was also slightly disappointing in the broker's view, so post the result there is no change in Neutral rating. Price target has been adjusted to reflect the special dividend.




UBS 29/03/2011 5 Sell $0.28 - 39.8%
Sigma's result was largely as expected, the broker notes, containing significant write-downs. The broker sees some stabilisation now of the underlying business, but still wonders what real upside there is in the market ahead.

The balance sheet has improved but Sell maintained.


Credit Suisse 29/03/2011 5 Underperform $0.28 - 39.8%
With the full year earnings result now in the broker has updated its model to reflect continuing earnings and the payment of a 15c special dividend.

Changes to forecasts have no impact on the broker's price target. There remains uncertainty with respect to PBS reforms and lost wholesaling revenues and so the broker retains an Underperform rating.



Deutsche Bank 29/03/2011 3 Hold $0.50 7.5%
While the result was somewhat messy given it included asset sales and a restatement of previous earnings, the broker suggests the interim result was a solid start for Sigma's new management team.

The special dividend was lower than expected but sees the broker lift earnings forecasts. Price target is unchanged and the broker retains a Hold rating.