Deciding which shares to buy and which shares to sell is one of the toughest decisions an investor has to make. Thankfully there are teams of analysts out there trying to make the decision-making process that little bit easier.
Two recommendation changes that caught my eye this week are as follows:
Perseus Mining Limited (ASX: PRU)
This gold producer has seen its shares downgraded to a sell rating by analysts at Citi. Its analysts were clearly not impressed with the surprise production guidance downgrade last week. For the six months ending June 30 2017 the miner expects to produce between 90,000 and 100,000 ounces, compared to the recently revised estimate of between 125,000 and 145,000 ounces.
Perseus is certainly a gold miner I would avoid. Its all-in sustaining cost during the first-half was US$1,583 an ounce, whereas the spot gold price currently sits at around US$1,212 an ounce. With the gold price looking likely to fall lower this year, the future looks bleak for Perseus in my opinion.
Sydney Airport Holdings Ltd (ASX: SYD)
Australia's busiest airport has caught the eye of analysts at Morgans today. Its shares have been upgraded from hold to an add rating thanks largely to the recent drop in its share price. A research note out of the broker reveals its analysts have slapped a $7.04 target price on its shares.
Whilst I believe the tourism boom Australia is experiencing should allow Sydney Airport to grow strongly for the foreseeable future, I'd like to see its share price drop a touch lower before making an investment. Currently its shares are changing hands at 33x estimated FY 2017's earnings according to CommSec, which I think is a little expensive.
