Unsurprisingly with earnings season in full swing there has been a number of broker upgrades and downgrades coming in.
Three key broker downgrades that caught my eye today are as follows:
ASX Ltd (ASX: ASX)
According to a research note out of Credit Suisse, analysts at the investment bank have downgraded its shares to an underperform rating with a $49.00 price target. Although the Australian Stock Exchange operator's half-year result was better than they expected, Credit Suisse expects lower investment earnings in the second-half and FY 2018. Whilst I like ASX's near-monopoly business, its shares do look a little on the expensive side considering its low levels of earnings growth.
Medibank Private Ltd (ASX: MPL)
The private health insurer has just had its shares downgraded to a reduce rating with a $2.40 price target by Morgans. I wasn't overly impressed with its half-year result last week, so would be inclined to agree with the leading broker on this one. Rising expenses, weak revenue growth, and lower profits in its insurance division led to half-year net profit after tax of $232 million. This was an increase of just 1.9% on the prior corresponding period.
Village Roadshow Ltd (ASX: VRL)
A research note out of Deutsche Bank reveals that its analysts have downgraded the entertainment company to a hold rating from a buy. Furthermore, Deutsche has lowered its price target on Village Roadshow's shares to $4.20. As well as posting a half-year loss of $6.7 million, management decided to not pay an interim dividend. Whilst the reasoning behind the move is sound, it is still a big disappointment for many investors. The company's turnaround is taking longer than expected, but it could be worth keeping an eye on at current prices.
