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Macquarie research notes that a tough macro has been driving stock performance for contractors in recent months. The upcoming reporting season however will refocus the market's attention on the micro. Achievement of FY13 guidance, quality of underlying results, cashflow and balance sheets, and FY14 guidance vs consensus will be key. The broker notes that Downer EDI (DOW target price $4.50) remains the top pick. The company has a good level of underlying earnings, relatively flat FY14 outlook, solid 2H13 expected cashflow and price-to-earnings discount to the sector.


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