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UBS has downgraded Coca-Cola Amatil (CCL) (SELL, price target $10.85), pointing to little upside potential earnings for the company, aside from ‘high single digit growth already factored into the share price.

The advice contradicts market commentator Charlie Aitken, who also just yesterday reaffirmed his belief in the strength of the beverage giant, putting a ‘buy’ recommendation on the stock with a price target of $13.60.

However UBS said that it remained cautious on the stock, saying its "stance reflects the risk of PE multiple compression & gently negative earnings momentum. Our $10.85 sum-of-the-parts based price target is unchanged."

UBS said its valuation had moved out to 17.3x FY11, 25% higher than its peers on the Aussie market and 15% above its NYSE listing.

Despite the diverging opinions on the price target, UBS and Charlie Aitken agreed on one thing.

”CCL is a high quality defensive with a well-communicated strategy & strong management track record,” UBS said.

Goldman Sachs has upgraded Iress Market Technology (HOLD, price target $9.32), arguing that the stock now trades at fair value. Moreover, the broker cites potential earnings tailwinds and corporate appeal.

Goldmans sees positive earnings risk stemming from rising financial industry employment levels, stronger exchange trading activity levels, the emergence of multi-markets and a robust product development pipeline.

The broker also cites solid acquisition firepower, imminent price rises and the impact of pending regulatory reviews surrounding the wealth management industry.

Beyond earnings tailwinds, Goldmans sees the potential for corporate activity given IRE’s strong cash flows, high returns on capital and dominant market position.

The broker cites the ASX as a likely suitors given ASX’s 19.2% stake in the company and a strong strategic rationale. Moreover, IRE would be financially EPS accretive for ASX.

The broker also neutralised its view on the stock on grounds that it is fairly valued. On Goldmans’ forecast IRE is trading on a CY10 PE of 19.2x and EV/EBITA multiple of 14.3x.

The broker notes that this appears broadly in line with companies that have similar valuation, growth and returns on capital.

Credit Suisse has downgraded CPU (NEUTRAL, price target $14.27) following recent shareprice strength, up 8% since the first half result, and appreciation of the Aussie dollar. The broker also cites subdued corporate actions conditions.

Credit Suisse notes that for the first quarter, global corporate activity was down 37% on the fourth quarter of FY09. CPU management expects improved M&A activity through CY10, with growth concentrated in North America.

The broker expects the second half to be weaker than the first half, however sees a recovery in FY11. In addition the recovery in corporate actions, Credit Suisse cites cost control, bolt on acquisitions and margin expansion as sources of medium term headwinds.

Credit Suisse says CPU is currently trading on 17x 12-month forward earnings, deemed as unchallenging relative to its listed peers and historical PEs given this stage of the global M&A/ECM cycle.

Goldman Sachs has upgraded Sims Metals Management (BUY, price target $28.84) after raising its earnings forecasts. The broker said this reflects higher scrap prices and currency revisions.

Goldman Sachs says scrap prices have increased significantly from around US$295 per tonne in Oct 09 to around US$455 per tonne currently. Beyond this, the broker said that its higher iron ore and coking coal forecasts suggest that scrap prices should be sustainably higher in the medium to longer term.

In addition, the broker suggests that margins and returns for SGM have troughed, as highlighted by the Schnitzer Steel Industries 2Q10 result. Schnitzer Steel is SGM's key global competitor.

More broadly, Goldman Sachs says it is attracted to SGM because of its low gearing, EPS upside via M&A and the prospect of high incremental returns on internal growth projects.

Based on the broker’s 12-month price target on SGM plus 12-month dividend, Goldman Sachs says the stock offers a total return of around 29%.

Following yesterday’s 25bps cash rate increase the general view is that the RBA will maintain its tightening bias. The April increase was the RBA’s fifth hike in six meetings, taking the cash rate to 4.25%, up from 3% at the start of October.

UBS argues that the central bank’s willingness to raise rates, despite recent softer data, suggests that it is focused on its positive medium term outlook. This, according to the broker, is the reason the RBA is looking to re-establish historically normal borrowing rates.

The key drivers for the April decision were Asian growth, high commodity prices, better credit markets, a rising terms of trade, inflation is set to rise and strong house prices.

Moreover, with the likelihood that the next batch of monthly economic data will be positive, UBS argues that the RBA is likely to lift the cash rate by 25bps in May, particularly given that June, post the Budget, is a traditionally difficult month to raise the cash rate.

Citi also expect a further 25bps increase in May. However, a significantly lower than expected first quarter CPI result and a weak jobs report on Thursday may challenge this.

Looking further out, Deutsche Bank expects the cash rate to increase to 6.00% in 2011, while Citi sees the RBA lifting the cash rate target to 5.25% by year-end and 6.25% by the end of 2011. UBS retains its mid 2011 cash rate target of 5.5%, and expects the RBA to reach 5% end 2010.

Credit Suisse downgraded MacArthur Coal (UNDERPERFORM, price target $14.50) arguing that it is time for traders to take profits. This follows news that Peabody Energy Corporation has offered to acquire all the shares in Macarthur.

Credit Suisse believes that Peabody can get a deal done at $14 to $15 per share, with the broker’s price target reflecting the mid-point of that range.

However, the broker noted that the maximum upside is $16 per share reflecting full value for MCC, but a counter-bidder would need to emerge for an offer to reach that level.

Given that, Credit Suisse believes that a $16 per share price tag would represent the best case scenario and that this would only add around 7.7% to the current share price, the broker argues that it is time to take profits.

Citi has downgraded TTS (HOLD, price target $2.60) citing headwinds to outperformance. The broker also cited weaker spending margins in Victorian gaming.

Citi said spending trends in Victorian gaming are also weak in early 2H10. Going forward Citi said the market would continue to lag given the absence of stimulus payments.

TTS lags TAH in share in this market, and given regulatory delays in opening new venues and relocating machines, is unlikely to claw back share in the twilight years of the license.

Citi noted that longer-term execution in NSW Lotteries looks promising, however the broker argued that the absence of stimulus payments in CY10 and rising interest rates will place further pressure on earnings momentum, creating a headwind for outperformance.

UBS has upgraded JHX (BUY, price target $8.30) despite headwinds in the US and rising pulp prices. The upgrade reflects the discount that has emerged due to recent share price weakness.

UBS notes that the price of pulp, which accounts for up to a quarter of cement costs, is up 38% from recent lows. The broker expects JHX to be pressured by the price increase in the March and June quarters, although the impact will be mitigated by higher volume.

In addition, UBS notes there is ongoing uncertainty and stress in the US housing market. The broker notes that delinquent loans are still rising sharply with volatility affected by the timing of the house tax credit expiration.

However, notes that JHX has underperformed the building materials sector by 10% in the last month. This is has seen the stock trade at a 15% discount to the broker’s valuation, prompting an upgrade to BUY.

Citigroup has upgraded NAB (BUY, price target $30.50) and raised its price target, arguing that recent sharemarket weakness has presented a buying opportunity. The broker says that concerns about execution risk regarding the potential AXA transaction were overdone.

Citi also said that the market is pricing in UK acquisition risk, which is also overdone. The broker said investors are concerned that NAB will add to its franchise before exiting the UK. However, Citi said NAB is likely to simply ride out the currency and bad debt cycle before exiting.

Moreover, Citi believes that NAB’s medium term outlook is promising. The company said it would benefit from a broader wealth management platform, improvement in commercial lending and the UK currency in FY11 and beyond.

Based on the a number of Citi’s valuation metrics, the broker concluded that NAB should be priced around $30.50, ahead of the yesterday’s closing price of $27.70.