The weekly wrap 2: CBA losing favour

This week research house Aspect Huntley decided to lift its rating on Westpac from hold to accumulate. For the purposes of correlation FNArena counts accumulate as a buy, although Aspect Huntley does have an ultimate buy rating within its five tier system.

The offset to Merrill Lynch upgrading NAB to neutral (hold) on the basis of its discount under apparently "less bad" Australian economic conditions is to downgrade Commonwealth Bank to underperform (or sell). The analysts have not changed their fundamental view on CBA as a larger and less risky proposition (alongside Westpac) than the smaller NAB or ANZ, but they have joined the pack in suggesting the stock is now overvalued.

Thus we have four ratings changes this week, resulting in NAB moving into equal second place with Westpac on the FNArena table of net buy/hold/sell recommendations among the major brokers. ANZ keeps first spot, but CBA, which continues to outperform and remains the only major still trading ahead of its average broker target price, has lost further ground to a 0/5/5 ratio. Ratings changes this week have taken the big four back to a net 7/10 buy/sell ratio from the 5/10 of the last couple of weeks.