Australian Broker Call

Bell Potter rates 360 as Buy (1) -

Bell Potter has reviewed its numbers for Life360 post earnings result. The key change is a -2% downgrade in revenue forecasts in 2023, 2024 and 2025 driven by lower average revenue per paying circle which has reduced subscription forecasts.

Despite the revenue downgrades there is negligible change in earnings forecasts as the broker continues to expect good cost control and a trajectory to modest positive earnings in 2025.

Despite expecting a 2023 result consistent with guidance Bell Potter still sees the result as a potential catalyst for the share price given the anticipated continued strong growth in paying circles and also the provision of initial 2024 guidance.

Buy retained, target falls to $11.00 from $11.25.

Target price is $11.00 Current Price is $7.66 Difference: $3.34
If 360 meets the Bell Potter target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 34.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates ABY as Buy (1) -

Citi believes a fairer bid for Adore Beauty, and one the company may accept, would be closer to $1.86 per share, with the retailer having recently rejected a $1.30 per share offer.

The broker assumes this based on Adore Beauty's 8-10% earnings margin target, extrapolating that an 8% earnings margin on FY24 sales would see the company report $15m in earnings.

However, Citi notes near-comparable online retailers have only been able to achieve an earnings margin above 8% during the peak of the pandemic. The Buy rating and target price of $1.25 are retained.

Target price is $1.25 Current Price is $1.14 Difference: $0.11
If ABY meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $1.18, suggesting upside of 2.9% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates ARX as Buy (1) -

Aroa Biosurgery posted first half revenue growth and an earnings loss weaker than forecast. Gross margin across the group was held
constant at 84%, and closing cash was $34m. In Bell Potter's view there is no risk of a capital raise at this time despite the cash burn.

Sales of the Myriad product were a feature of top line growth. Revenues increased by 80% year on year and now represent 33% of total product sales and growing. A de-stocking event by TELA Bio was reflected in a -13% decline in reported revenues from the sale of OviTex products.

Guidance implies second half revenues a long way ahead of the first half result. There is significant stretch in this target, hence Bell Potter remains cautious. Target falls to $1.15 from $1.45, Buy retained.

Target price is $1.15 Current Price is $0.72 Difference: $0.435
If ARX meets the Bell Potter target it will return approximately 61% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates ARX as Add (1) -

Aroa Biosurgery's 1H results were in line with Morgans forecasts and management reconfirmed FY24 guidance, helped along by favourable currency movements. 

Sales for Myriad rose by 80% to NZ$10.1m, comprising 33% of all product sales, a percentage the analyst anticipates will increase to 35% for FY24.

The broker makes no changes to forecasts and the Add rating and $1.50 target are unchanged.

Target price is $1.50 Current Price is $0.72 Difference: $0.785
If ARX meets the Morgans target it will return approximately 110% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates ASG as Outperform (1) -

Macquarie observes demand for luxury vehicles remains strong (on normalising supply) after reviewing Autosports Group's 1H results, which beat expectations. However, a skew of sales mix to used cars impacted the gross margin.

Revenue growth guidance of around 23-25% for the 1H exceeded the broker's circa 15% forecast, due to the annualised impact of acquisitions and ongoing normalisation of new vehicle supply.

While the analyst's EPS forecasts rise, the target falls to $3.10 from $3.15 on a lower assumed multiple given the current macroeconomic uncertainty. Outperform.

Target price is $3.10 Current Price is $2.32 Difference: $0.78
If ASG meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $3.22, suggesting upside of 39.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates CCX as Neutral (3) -

As expected by Macquarie, sales for City Chic Collective improved over Q2, after discounting in Q1. At the AGM, management reaffirmed guidance for a return to profitability in the 2H.

While Australian stock levels have reduced, they remain elevated in the US where promotions are continuing, explains the analyst.

Macquarie lowers sales and gross margin percentage expectations for FY24, and sales estimates further out. The target falls by -22% to 38c, partly due to a lower assumed multiple. Neutral.

Target price is $0.38 Current Price is $0.38 Difference: $0.005
If CCX meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $0.46, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates CKF as Neutral (3) -

Collins Foods has reported a stronger than expected first half result, with net profits of $31.2m a 37% beat to consensus expectations. Europe performed strongly, with earnings from the region up 52% year-on-year, partly on 16% store count growth.

Citi notes the company's Taco Bell brand also returned to same store sales growth in the period, and same store sales have continued to marginally accelerate in the early weeks of the second half. The Taco Bell development pause will be reviewed over the coming half.

The Neutral rating and target price of $11.10 are retained.

Target price is $11.10 Current Price is $11.01 Difference: $0.09
If CKF meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $11.99, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates CKF as Neutral (3) -

Macquarie explains 1H results for Collins Foods exceeded consensus forecasts due to stronger same store sales (SSS) growth across all divisions. The target is increased to $11.10 from $9.70. 

The master franchise structure in the Netherlands is driving improved results, notes Macquarie, with margins up by 150bps to 13.6%.

The broker highlights revenue and underlying earnings (EBITDA) growth for KFC Australia of 9% and 11%, respectively, partly due to a large take up of e-commerce, which now accounts for 28% of sales.

The analyst notes a significant slowdown in the first six weeks of 2H trading (SSS growth to 2.9% for KFC Australia), most likely due to the impacts from rising cost of living upon the consumer. Neutral.

Target price is $11.10 Current Price is $11.01 Difference: $0.09
If CKF meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $11.99, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgans rates CKF as Add (1) -

First half earnings (EBITDA) and profit for Collins Foods beat Morgans forecasts by 9.2% and 29.2%, respectively, on lower-than-expected finance costs. The target is raised to $12.40 from $10.50.

Same store sales growth for KFC Europe and KFC Australia was 8.8% and 6.6%, respectively, driven by higher prices, explains the broker.

The analyst highlights resilience of consumer demand for KFC in Australia, along with promising long-term European growth opportunities, and retains an Add rating, despite a share price rally in response to the 1H result. Taco Bell is seen (largely) as a free option.

Target price is $12.40 Current Price is $11.01 Difference: $1.39
If CKF meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $11.99, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates CKF as Accumulate (2) -

Ord Minnett upgrades Collins Foods's target price 3% to $14.40 from $14 to reflect the time value of money and an improved sales outlook, and considers the stock to be strongly undervalued.

The broker observes the store rollout is proceeding faster than expected and the European business is also staging a strong performance despite rising costs and weaker consumer sentiment, staging same-store sales growth of 9% in FY23, which continued into the first six weeks of the November half.

Margin forecasts are steady. Accumulate rating retained.

Target price is $14.40 Current Price is $11.01 Difference: $3.39
If CKF meets the Ord Minnett target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $11.99, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates CKF as Neutral (3) -

Collins Foods's interim result outpaced the UBS forecast thanks largely to strong performance from KFC in Europe, which drove a 1% revenue beat, a 9% earnings (EBITDA) beat, and a 25% net profit after tax beat.

UBS observes most Australian fast food players, excluding pizza, have raised prices, which is promising for margins and suggests EBITDA guidance may be conservative, says the broker.

The broker expects price increases in Europe will offset rises in minimum wages. EPS forecasts rise 11% to 19% across FY24 to FY25.

Neutral rating retained. Target price rises to $10.95 from $9.65.

Target price is $10.95 Current Price is $11.01 Difference: minus $0.06 (current price is over target).
If CKF meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.99, suggesting upside of 6.7% (ex-dividends)

The company's fiscal year ends in May.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates CNU as Hold (3) -

Ord Minnett highlights Chorus's secure dividend growth profile, observing the company's dividend yield of 6.3% is already trading at higher than the ASX and NZX average.

The broker forecasts a three-year DPS compound annual growth rate of 5% from 2024 and says the slow build-out of NZ's fibre network is "on the verge of prodigious monetisation", making earnings utility-level secure, and expects the company will likely plum for a distribution of 75% of free cash flow.

Regulation remains a risk but the broker estimates the company's regulatory prospects during the current round of regulatory rumbling to be "sanguine".

Hold rating and $7.20 target price retained.

Target price is $7.20 Current Price is $7.02 Difference: $0.18
If CNU meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates CSL as Overweight (1) -

The condition primary immune thrombocytopenia (ITP) accounts for around 6% of CSL's immunoglobulin (Ig) volumes, notes Morgan Stanley, after evaluating trial results by competitor argenx.

A recent study evaluating argenx's product Vyvgart Hytrulo for ITP in adults was partly unsuccessful, explains the broker, in that it did not meet its primary or secondary endpoints.

The Overweight rating and $334 target for CSL are unchanged. Industry View: In-Line.

Target price is $334.00 Current Price is $256.88 Difference: $77.12
If CSL meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $329.70, suggesting upside of 25.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.9

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates GTK as Buy (1) -

Shaw and Partners raises its target for Gentrack Group to $6.50 from $4.60 following FY23 results and upgraded (6%) FY24 guidance, which implies strong underlying growth. FY23 revenue beat management guidance by 7%.

The broker believes medium-term targets have been de-risked given strategic customer wins, including the software upgrade at Genesis Energy and a new contract win in Saudi Arabia.

The rise in the broker's target price was largely driven by higher medium term cashflows, higher terminal cashflows and the end of year roll-forward. The Buy rating is retained. 

Target price is $6.50 Current Price is $5.24 Difference: $1.26
If GTK meets the Shaw and Partners target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates IEL as Upgrade to Buy from Hold (1) -

The Sep Q is typically seasonally weaker for student placement volumes in Australia, which was evident in visas granted across IDP Education’s key source countries being down -12% year on year, Bell Potter notes, albeit slightly above pre-pandemic levels.

Bell Potter is more conservative on IDP’s Australian placement outlook with recent data portraying a normalisation of visas issued along with lower grant rates and the possibility of the government introducing policies to cap international student numbers to lower record migration levels.

However the modest downgrades to the broker's Australia placement assumptions are more than offset by an increase in multi-destination forecasts supported by encouraging northern hemisphere data.

Upgrade to Buy from Hold, target rises to $27.00 from $26.70.

Target price is $27.00 Current Price is $21.87 Difference: $5.13
If IEL meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $27.84, suggesting upside of 22.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates IFM as Buy (1) -

Infomedia has upgraded FY24 guidance by 1% at the midpoint, but guidance remains below UBS' and the consensus forecast, observes the broker.

UBS believes the company's transformation plan is already yielding benefits, pointing to new business, geographic growth and swifter contract implementation, and observes the consolidation of the SP/Americas operations are proceeding well. 

The broker spies plenty of positives: rising margins, further price rises in the wings, and a growing sales pipeline and strong conversions.

Buy rating and $2 target price retained.

Target price is $2.00 Current Price is $1.51 Difference: $0.495
If IFM meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $1.88, suggesting upside of 25.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates LNK as Neutral (3) -

Despite a largely positive update from Link Administration, Citi expects the market will remain cautious on the stock given recent history. The company also remains confident of a positive result as it continues to engage with Australian Super, with a update expected by year's end.

Year-to-date, the company is performing ahead of expectations and upgraded guidance for ongoing operations revenue growth to at least 6.5%, and operating earnings growth between 7-9%. Citi lifts its earnings per share forecasts 2% through to FY26.

The Neutral rating and target price of $1.40 are retained.

Target price is $1.40 Current Price is $1.24 Difference: $0.16
If LNK meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates LNK as Neutral (3) -

Management upgraded FY24 revenue and operating earnings (EBIT) guidance at Link Administration's AGM. The company noted operating EBIT (continuing) should be "up between 7% and 9%" compared to "at least 6%" previously.

While the current valuation for Link appears attractive, Macquarie maintains a Neutral rating in the belief consensus is not completely allowing for the exits from the Fund Solutions (FS) and Banking & Credit Management (BCM) businesses.

Medium-term interest expenses will also be higher than the market expects, in the broker's view. Target $1.25.

Target price is $1.25 Current Price is $1.24 Difference: $0.01
If LNK meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates MVF as Outperform (1) -

Underlying profit guidance for the 1H, provided by Monash IVF at its AGM, was around 5% ahead of Macquarie's forecast.

Up until the end of October (in FY24), the company has gained 280bps of domestic fresh cycle share, highlights the analyst, with fresh cycles growth of 16.8% compared to the previous corresponding period. 

The broker increases its target to $1.50 from $1.40 on increased EPS forecasts, while the Outperform rating is maintained on ongoing structural tailwinds for the IVF industry.

Target price is $1.50 Current Price is $1.28 Difference: $0.22
If MVF meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.38, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates NIC as Buy (1) -

Citi has trimmed its target price for Nickel Industries, accounting for updated operational costs and expected nickel pricing.

The broker maintains announcing a larger dividend could prove a catalyst for Nickel Industries.

The Buy rating is retained and the target price decreases to 90 cents from 95 cents.

Target price is $0.90 Current Price is $0.72 Difference: $0.185
If NIC meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates ORR as Hold (3) -

Perseus Mining ((PRU)) has announced it has acquired a 19.9% interest in OreCorp as a strategic equity investment. Perseus will vote against a takeover bid from Canada's Silvercorp Metals which the OreCorp board has recommended.

Perseus has an interest to deploy its engineering, development and operating expertise and balance sheet to contribute to the development of OreCorp’s Nyanzaga Gold Project in Tanzania.

One of the key tenets of Bell Potter's investment thesis has been that the NGP is an attractive, significant scale, new gold project with strong financial performance metrics in a region that is experiencing a resurgence in investment.

Perseus needs to effect a smooth acquisition to maintain project momentum and it will need shareholder approval to do so. Hold and 53c target retained.

Target price is $0.53 Current Price is $0.46 Difference: $0.07
If ORR meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates RHC as Neutral (3) -

While Ramsay Health Care reiterated its expectations for earnings growth over FY24, it is yet to provide any quantitative guidance. With a higher tax rate now expected in France, Citi lowers its earnings forecasts -27%, -8% and -5% through to FY26.

Citi continues to see the sale of Ramsay Sante as a next logical step for the company. The broker sees few synergies between the two, and believes a sale could provide Ramsay Health Care with lower financing risk and higher return on invested capital.

The Neutral rating is retained and the target price decreases to $50.00 from $50.50.

Target price is $50.00 Current Price is $49.33 Difference: $0.67
If RHC meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $56.57, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates RHC as Neutral (3) -

Despite improving activity trends and increased staff availability in Australia and the UK, evident from management's AGM operational update, digital investments will constrain margin improvement in FY24/25, suggests Macquarie.

UK volume growth for Ramsay Health Care was ahead of the broker's forecasts, while Australia and France were in line.

Management noted a continuation of inflationary pressures in France.

The Neutral rating and $53.50 target are unchanged.

Target price is $53.50 Current Price is $49.33 Difference: $4.17
If RHC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $56.57, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates RHC as Equal-weight (3) -

Following Ramsay Health Care's AGM, Morgan Stanley again lowers its EPS forecasts due to greater-than-expected (ongoing) margin pressure in both France and the Nordic countries. High tax rates also negatively impacted the broker's EPS forecasts.

While overall volumes are improving, inflation and currency movements are continuing to pressure earnings in these countries, explain the analysts.

The Equal-weight rating is maintained, with the broker noting multiples still look stretched. Target $51.60. Industry view: In-Line.

Target price is $51.60 Current Price is $49.33 Difference: $2.27
If RHC meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $56.57, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates TPW as Buy (1) -

Post today's AGM update, Citi concludes Temple & Webster's sales are running ahead of the consensus forecast, seen as vindication for the broker's Buy rating.

Citi does highlight it is positive, but cautious nevertheless, given the outlook for consumer spending in Australia. There's also a suspicion new customers start off with small purchases and the question remains whether they'll stick around and keep coming back for more.

Target $6.50.

Target price is $6.50 Current Price is $6.46 Difference: $0.04
If TPW meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.56, suggesting downside of -11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources