Research Policies

Below you will find links which provide details of Morgans research policies.

Share Market Terms

Recommendation structure

Equity recommendations

The recommendation for all stocks is determined by the total shareholder return, which considers the implied upside/downside to the target price along with the dividend yield. An Add/Reduce recommendation indicates an upside/downside of 10% or more, while a Hold recommendation suggests less than 10% movement.

A Speculative Buy recommendation applies to stocks exposed to a higher than usual level of risk, which is often accompanied by the potential for higher than usual capital upside. Risk may be influenced by factors including lack of earnings (e.g. start-ups, explorers), vulnerable balance sheets, small size and lower liquidity/higher volatility. Investors should exercise caution in determining their exposure to higher risk stocks in portfolios and consider whether the additional risk aligns with their overall investment objectives.

The target price is the level the stock should currently trade at if the market accepted the analyst's view of the stock, provided the necessary catalysts are in place to effect the change in perception.

If it is felt that the catalysts are not fully in place to effect a re-rating of the stock to its warranted value, the target price will differ from 'fair' value.

Given the volatility of share prices and our pre-disposition not to change recommendations frequently, these performance parameters should be interpreted flexibly.

Performance in this context generally reflects total shareholder return and the horizon is 12 months.

Fixed Interest Security Recommendations


The current credit spread and yield of the security compare favourably to peer securities and offers an attractive total return for new investors.


The security's current pricing reflects fair value relative to peer securities.


The current credit spread and yield looks expensive relative to peer securities. Holders should consider alternative securities.

Fixed Interest Sector Ratings


On balance, the sector offers good value (for the level of risk) relative to other fixed interest sectors.


On balance, the sector does not offer compelling value (for the level of risk) relative to other fixed interest sectors.


On balance, the sector does not offer sufficient value (for the level of risk) relative to other fixed interest sectors.

Independence statement

Morgans Financial Limited (Morgans) has policies and procedures designed to assist in identifying and managing possible conflicts of interest and inside information that might affect or raise questions about the independence of research. The intent of this statement is to outline Morgans position with regards to the independence of its research analysts.

Morgans complies with the guidelines set out by the Australian Securities and Investments Commission (ASIC) in research regulatory guidance notes: RG79, RG181 and RG264.

All research analysts and other Morgans staff with whom analysts interact are provided with training and guidance on how to identify inside information and potential conflicts, and how to act in those circumstances. Research management and compliance staff provide assistance and guidance where required.

Research analysts are responsible for raising conflicts or potential conflicts with Research management or compliance staff to ensure these are reviewed at the appropriate level within Morgans.

Research coverage decisions

Decisions regarding the initiation or discontinuation of coverage on a specific stock are made collaboratively by Research management and the analyst. Factors considered include market capitalisation, index position, liquidity, investment attractiveness, potential catalysts such as index inclusion, merger and acquisition activity, new market entries, under-coverage in the market, sector coverage alignment, client interest, and available resources.

Corporate advisory mandates will not include any commitment or inducement to provide research.

Research analyst independence

All research analysts report directly to the Director of Research, who reports directly to the Managing Director.

Morgans has robust physical and electronic information barriers between Research staff and staff performing corporate advisory or sales functions.

Research analysts produce research independently from other areas of Morgans. The lead analyst(s) responsible for a research report is required to ensure the views expressed in each research report accurately reflect his/her personal views.

Prior to publication, all research reports are reviewed by the Research review panel (senior editor and senior analysts) to ensure they comply with Morgans editorial guidelines and regulatory requirements. Research reports are not made available to non-research employees of Morgans (except compliance staff) before it is available to clients. Research reports are available via email, the website and approved third party vendors.

When amending research documents (including recommendations, opinions or material changes to a price target), the research analyst bases decisions on generally available information.

Research documents include disclosures as required by regulatory requirements. This includes analyst disclosure of any material conflict of interest known at the time of publishing.

Any requests for access to financial models maintained or prepared by research analysts, whether from internal or external sources, are referred to Research management.

Research analysts will not express their views on valuation information of a company during non-deal meetings or the pre-solicitation phase of a capital raising.

The compensation of research analysts is determined by a number of factors, however is not directly linked to specific transactions. Compensation will, in part, reflect the overall profitability of Morgans as a whole. Analysts are not allowed to receive or accept alternative remuneration from any source.

Coverage policy

Decisions to initiate or discontinue coverage on a particular stock are made by research management in conjunction with the analyst. Research management may take into account input with respect to coverage requests from other business areas within Morgans.

There are several factors taken into consideration when an analyst initiates coverage or ceases coverage on a stock. These may include:

  • Market capitalisation, index position, liquidity
  • Investment attractiveness including fundamental analysis
  • Potential catalysts (e.g. index inclusion)
  • Merger and acquisition activity
  • New to market
  • Under-covered in the market
  • Rounds out sector coverage
  • Well held by clients
  • Available resources to cover