Australian Shares Recommendations

Have a look at your charts! Rio Tinto [RIO] Limited is at $72.50 rising $2.25 today as a result of their release of a strong December 2005 quarter production result. The quarter continued the strong operational performance seen in the first 9 months of 2005. UBS values Rio Tino at A$51.21 (DCF, 10% d.r)using [DCF = Discounted Cash Flow Analysis]

With last night's close of $32.63 Macquarie Reseach Equities has a 12 month target on NAB to $34. Might be worth a look on the charts.

Woodside Petroleum unleashes its' 10 Year Growth Expansion Plan: There's an interesting article in the AFR today about the growth expansion plans that Woodside Petroleum has (WPL) - the aggressive goal is to generate up to half the company's revenue overseas within 10 years by seeking new oil and gas reserves in the United States and Africa.

Is this an opportunity? The way I look at it is that this opportunity has a medium risk to it - you need to track this one of you want to participate. Their 12 month price target is $6.55 which is an upside of almost 50% above yesterday's closing price...

"The second largest private hospital group in Australia plunged to an 8 month low of $4.38 after announcing that weak pathology earnings in NSW and Victoria would result in the company’s human pathology earnings falling below that forecast in their December 2004 prospectus."

UK Takeover Panel Disclosure

Macquarie Bank is considering a bid for the London Stock Exchange (LSE). As adviser to Euronext, a possible bidder, the UK Takeover Panel requires UBS to disclose that it is acting for Euronext on all research on Macquarie Bank and its listed and unlisted funds

Another Transaction Announced

Event: Rio announces share repurchase programme

Rio has announced that it has commenced a programme to buy back shares during the period which commences on 20 December 2005 and ends on the announcement of Rio’s results on 2 Feb 06. The buy back programme will be managed by an independent third party, which makes its trading decisions in relation to Rio Tinto’s securities independently of, and uninfluenced by, Rio Tinto.

Impact: Enables Buy Back to continue through black out

Following ANZ’s AGM on Friday, Macquarie Research Equities (MRE) have upgraded their FY06 EPS numbers by 0.5%, to reflect the improvement in New Zealand margins and the improvement in the outlook for the bank’s wealth management division. ANZ is MRE’s preferred stock in the sector as (1) NZ pressures easing, (2) the bank’s Australian and institutional businesses are targeting double digit growth (3) the stock is trading at a 7–8% discount to its peers, and (4) its share price offers 7% upside against MRE’s 12-month target price.

Shares in Westpac (WBC) have jumped over 2% in morning trade to lead the banking sector higher after announcing an increase to its buy-back program. Australia’s fourth-biggest bank has increased the size of its buy-back to $1b, a $300m increase over its announced target size of $700m. Macquarie Research Equities (MRE) reiterate their outperform recommendation and is MRE’s second top pick in the banking sector behind ANZ.

[BHP] UBS: – A$21.60 Buy 2 Target: A$27.00 - BHP approves its share of NWS Angel development: BHP Billiton today approved its share of the North West Shelf Venture’s Angel development. BHP will contribute US$200m (16.67% share) towards the gas and condensate field off the north west coast of Australia. The development is required to provide additional gas supply for LNG Train 5 (under construction) and meet future WA domestic gas demand.

Impact: Angel already in our forecasts

[ANZ] UBS Buy 1– A$23.26 Target: A$27.00: More positive outlook commentary

At ANZ's AGM it stated "We are seeing a similar rate of growth in earnings in the first two months of 2006 to that which we experienced in 2005 and our current expectation is that this will continue for the balance of the year". Management appears more comfortable with the earnings outlook than with its previous FY result comments of "continued good results in the year ahead".

Growth expected in NZ. Margin contraction less than 2005