Broker Notes: Why analysts name Aussie Broadband and Challenger to buy now?
$Aussie Broadband Ltd (ABB.AU)$: J.P. Morgan reiterates its overweight rating and cuts its target price by 3.2% to A$6.10.
The selloff that greeted Aussie Broadband's 4Q trading update looks overdone to J.P. Morgan analyst Mark Busittil. Shares in the fixed-line communications provider fell 16% on release of the update but Busittil says the content was reasonable. Residential customer numbers at the end of 4Q were lower than Busittil expected and he concedes that the outlook is for customer churn above historical levels, but adds that the company has restored call staff to normal levels in response.
$Challenger Ltd (CGF.AU)$: Jarden upgrades the stock to overweight from neutral.
Significant market movements over 2H are likely to impact Challenger's annual net profit, but Jarden says value is emerging in the fund manager's stock. "We see sufficient capital buffers to absorb mark-to-market losses and retain regulatory capital ratios above the midpoint of its target range," analysts led by Kieren Chidgey say in a note. With a robust capital footing, this positions Challenger well to benefit from a "brighter macro backdrop ahead," Jarden says.
The selloff that greeted Aussie Broadband's 4Q trading update looks overdone to J.P. Morgan analyst Mark Busittil. Shares in the fixed-line communications provider fell 16% on release of the update but Busittil says the content was reasonable. Residential customer numbers at the end of 4Q were lower than Busittil expected and he concedes that the outlook is for customer churn above historical levels, but adds that the company has restored call staff to normal levels in response.
$Challenger Ltd (CGF.AU)$: Jarden upgrades the stock to overweight from neutral.
Significant market movements over 2H are likely to impact Challenger's annual net profit, but Jarden says value is emerging in the fund manager's stock. "We see sufficient capital buffers to absorb mark-to-market losses and retain regulatory capital ratios above the midpoint of its target range," analysts led by Kieren Chidgey say in a note. With a robust capital footing, this positions Challenger well to benefit from a "brighter macro backdrop ahead," Jarden says.
Buy: Also known as strong buy and "on the recommended list." Needless to say, buy is a recommendation to purchase a specific security.
Sell: Also known as strong sell, it's a recommendation to sell a security or to liquidate an asset.
Hold (Neutral): In general terms, a company with a hold recommendation is expected to perform at the same pace as comparable companies or in line with the market.
Underperform: A recommendation that means a stock is expected to do slightly worse than the overall stock market return. Underperform can also be expressed as "moderate sell," "weak hold," and "underweight."
Outperform: Also known as "moderate buy," "accumulate," "add," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.
Sell: Also known as strong sell, it's a recommendation to sell a security or to liquidate an asset.
Hold (Neutral): In general terms, a company with a hold recommendation is expected to perform at the same pace as comparable companies or in line with the market.
Underperform: A recommendation that means a stock is expected to do slightly worse than the overall stock market return. Underperform can also be expressed as "moderate sell," "weak hold," and "underweight."
Outperform: Also known as "moderate buy," "accumulate," "add," and "overweight." Outperform is an analyst recommendation meaning a stock is expected to do slightly better than the market return.
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