Australian Broker Call

Citi rates ABC as Neutral (3) -

Citi analysts have reviewed their assumptions regarding the widely touted infrastructure boom in light of changing macro conditions.

Their conclusion is metro projects are most likely at risk, also given questionable track records in the past.

Neutral rating retained for Adbri with estimates rising on the back of better forecasts for mining projects. Marking to market of peer multiples still reduces the broker's price target to $2.62 from $3.52.

Target price is $2.62 Current Price is $2.44 Difference: $0.18
If ABC meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 39.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Morgans rates ANP as Speculative Buy (1) -

Morgans notes that access to capital within the Biotechnology sector has thinned, as evidenced by recent market offerings.

As a result, the broker no longer views some of its previous funding assumptions for Antisense Therapeutics as viable. After marking-to-market these assumptions, the company's valuation is significantly diluted and the target price falls to $0.27 from $0.58.

The analyst is more reacting to investor caution around funding, as there is no tangible reason as yet to believe stated timeframes for achieving clinical progression can't be met. The Speculative Buy rating is unchanged.

Target price is $0.27 Current Price is $0.08 Difference: $0.19
If ANP meets the Morgans target it will return approximately 238% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates AUB as No Rating (-1) -

Incorporating AUB Group's $880m Tyers acquisition into its forecasts, Macquarie reduces its earnings per share estimates -1.6% in FY22 to account for equity raise dilution, but lifts estimates 12.5% in FY24 when it anticipates synergy benefits will be realised. 

The broker notes AUB Group is targeting $25m in annual run-rate earnings, to be fully realised in 18 months. 

The broker remains restricted on rating.

Current Price is $17.81. Target price not assessed.

Current consensus price target is $25.92

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates AX1 as Neutral (3) -

Citi's retail analysts believe the widely anticipated slow down in consumer spending may not yet show up in market updates by small cap retailers in the short term.

However, challenges remain in the form of rising costs of doing business. The analysts are not sure what margins will look like when financial results are reported.

Accent Group's rating remains Neutral but the price target has been pulled down to $1.22 from $1.45 on reduced forecasts.

Baby Bunting ((BBN)) and Bapcor ((BAP)) are the broker's top small cap retail picks given the relatively less discretionary nature of their respective operations.

Target price is $1.22 Current Price is $1.24 Difference: minus $0.02 (current price is over target).
If AX1 meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.43, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates BLD as Downgrade to Sell from Neutral (5) -

Citi analysts have reviewed their assumptions regarding the widely touted infrastructure boom in light of changing macro conditions.

Their conclusion is metro projects are most likely at risk, also given questionable track records in the past.

In direct response, the rating for Boral has been downgraded to Sell from Neutral. Price target shifts to $2.57 from $3.60 on reduced forecasts.

Target price is $2.57 Current Price is $2.70 Difference: minus $0.13 (current price is over target).
If BLD meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.98, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.3

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

UBS rates BWX as Buy (1) -

UBS reduces its target price to $1.20 from $2.55 for BWX to reflect a guidance downgrade, a higher share count and an increased weighted average cost of capital. Underlying earnings (EBITDA) guidance was cut by around -60% from the range provided on May 5.

The downgrade was mainly due to a strategic decision to abandon the company's practice of year-end investment buys, explains the broker. The underperformance in digital and delays to the US expansion of Mineral Fusion Wholefoods also contributed.

The company will raise $23m in equity to reduce gearing. The Buy rating is maintained.

Target price is $1.20 Current Price is $0.67 Difference: $0.53
If BWX meets the UBS target it will return approximately 79% (excluding dividends, fees and charges).

Current consensus price target is $0.88, suggesting upside of 35.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates CSR as Downgrade to Hold from Accumulate (3) -

Ord Minnett notes that housing is at a global inflection point as rates rise and early signs of a slowdown are emerging.

The broker expects earnings are peaking for CSR. Target price falls to $4.65 from $6.30. Rating is downgraded to Hold from Accumulate. 

The broker retains a Hold rating for Boral ((BLD)) and Adbri ((ABC)). Boral's target price falls to $3.15 from $3.25 and Adbri's target price falls to $2.75 from $3.30.

James Hardie Industries ((JHX)) remains Ord Minnett's sector pick and retains its Buy rating. Target price slips to $52 from $53.10.

Target price is $4.65 Current Price is $4.12 Difference: $0.53
If CSR meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.02, suggesting upside of 47.1% (ex-dividends)

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Credit Suisse rates HUB as Outperform (1) -

Credit Suisse suggests a slowdown in flows indicated by March quarter industry data is behind a slowdown in flows for Hub24 and Netwealth Group. This gives the broker greater confidence that flows for both companies will likely recover into FY23-25.

Both companies reported flows in the March 2022 quarter that were below expectations. Due to greater valuation support, the analyst prefers the Outperform-rated Hub24. The $38 target price is retained.

Target price is $38.00 Current Price is $20.29 Difference: $17.71
If HUB meets the Credit Suisse target it will return approximately 87% (excluding dividends, fees and charges).

Current consensus price target is $31.38, suggesting upside of 53.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates IGO as Buy (1) -

UBS raises its FY23 earnings forecast by 3% for IGO on the rising market price for spodumene. It's noted that while global economic growth concerns continue to weigh on some commodity prices, lithium prices continue upwards.

The Buy rating is maintained and the target price rises to $12.25 from $12.15.

Target price is $12.25 Current Price is $10.05 Difference: $2.2
If IGO meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $13.26, suggesting upside of 32.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Credit Suisse rates LLC as Outperform (1) -

In an end of financial year review of Lendlease Group, Credit Suisse lowers its earnings forecasts and reduces its target price to $12 from $12.59. Funding cost assumptions are increased and earnings for the Development and Construction division are lowered.

Despite the downgrades, the broker still views Lendlease Group as a medium-term earnings recovery story (as long as management proves it is delivering on its strategy), and maintains its Outperform rating.

Target price is $12.00 Current Price is $9.32 Difference: $2.68
If LLC meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $12.40, suggesting upside of 36.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates LTR as Outperform (1) -

Liontown Resources' Kathleen Valley lithium mine received Ford Motor Company's tick of approval in the form of a $300m debt facility to further development of the site. 

Macquarie notes Ford signed a binding offtake agreement for up to 150,000 dry metric tonnes of spodumene per annum.

The broker highlights this latest contract means Liontown Resources has secured offtake agreements for 450,000 dry metric tonnes spodumene per annum, or 90% of planned production.

Liontown Resources has now formally approved development of the project, but has lifted pre-production capital costs 15%. Macquarie lowers its earnings forecasts -8%, -8% and -4% in FY24, FY25 and FY26 respectively, to account for increased financing costs. 

The Outperform rating is retained and the target price decreases to $1.85 from $1.90.

Target price is $1.85 Current Price is $1.12 Difference: $0.73
If LTR meets the Macquarie target it will return approximately 65% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Citi rates NCK as Buy (1) -

Citi's retail analysts believe the widely anticipated slow down in consumer spending may not yet show up in market updates by small cap retailers in the short term.

However, challenges remain in the form of rising costs of doing business. The analysts are not sure what margins will look like when financial results are reported.

The rating for Nick Scali remains Buy but the price target has been pulled down to $12 from $15.50 on reduced forecasts.

Baby Bunting ((BBN)) and Bapcor ((BAP)) are the broker's top small cap retail picks given the relatively less discretionary nature of their respective operations.

Target price is $12.00 Current Price is $8.29 Difference: $3.71
If NCK meets the Citi target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates NWL as Outperform (1) -

Credit Suisse suggests a slowdown in flows indicated by March quarter industry data is behind a slowdown in flows for Hub24 and Netwealth Group. This gives the broker greater confidence that flows for both companies will likely recover into FY23-25.

Both companies reported flows in the March 2022 quarter that were below expectations. Due to greater valuation support, the analyst prefers the Outperform-rated Hub24. The target for Netwealth Group is decreased to $16.75 from $17.50. Outperform.

Target price is $16.75 Current Price is $12.15 Difference: $4.6
If NWL meets the Credit Suisse target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $15.88, suggesting upside of 29.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

UBS rates OZL as Upgrade to Buy from Neutral (1) -

While UBS lowers its price target to $23.65 from $26.50 for OZ Minerals on lower earnings forecasts after a 2022 guidance downgrade, the rating rises to Buy from Neutral.

Some caution is warranted on the short-term outlook for copper though the company's shares are now trading at a discount to the amended target price, explains the analyst.

The company lowered 2022 copper guidance by -8% due to covid absenteeism and weather impacts, as well as labour and inflationary pressures.

Target price is $23.65 Current Price is $17.75 Difference: $5.9
If OZL meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $22.77, suggesting upside of 27.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Macquarie rates PLS as Outperform (1) -

Preliminary production and shipments from Pilbara Minerals in the fourth quarter have exceeded Macquarie's expectations by 40% and 20% respectively, and subsequently drove a cash flow beat of 17-18%. The broker's full year earnings forecast increases 7%. 

The company announced its decision to expand process plant capacity to 640-680,000 dry metric tonnes per day, from a current 540-580,000. At a cost of $297.5m according to the company, expansion costs have come in $100m higher than Macquarie has anticipated. 

The Outperform rating is retained and the target price increases to $4.20 from $3.90.

Target price is $4.20 Current Price is $2.30 Difference: $1.9
If PLS meets the Macquarie target it will return approximately 83% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 56.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Ord Minnett rates PLS as Buy (1) -

Pilbara Minerals's June-quarter production update outpaced Ord Minnett's forecast by 41%, and shipments outpaced by 13%.

The update reveals strong production and export of spodume paired with rising capital expenditure and costs (cost guidance rose 30% in two months, notes the broker).

Ord Minnett cuts the target price to $3.50 from $4.25 but retains a Buy recommendation, expecting the company's strong cash flow and balance sheet will allow it to ride out the storm.

Target price is $3.50 Current Price is $2.30 Difference: $1.2
If PLS meets the Ord Minnett target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 56.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates SHV as Buy (1) -

A  'lockdown' has been imposed on honeybees in NSW to prevent further spread of the Varroa mite. UBS will be monitoring the situation as Select Harvests cautions on a potentially significant impact to FY23 almond production, if the outbreak is not contained.

Almonds require bee pollination in the last three weeks of August to produce a commercial crop. The broker points out the mite is an established pest in California, where almond production has doubled over the past ten years.

The target price slips to $7.10 from $7.20 on adjustments separate to the mite outbreak. The Buy rating is maintained.

Target price is $7.10 Current Price is $5.01 Difference: $2.09
If SHV meets the UBS target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates TAH as Upgrade to Outperform from Neutral (1) -

Macquarie expects the launch of Tabcorp Holdings' new wagering app, as well as regulatory reforms, should see the company be more competitive moving forward.

The broker notes Tabcorp Holdings hopes to launch its app ahead of the September Spring Carnival, with a focus on a simpler and faster interface. 

Macquarie expects Tabcorp Holdings to show more discipline around capital, suggesting the company may look to service markets like Victoria or Western Australia with a digital product. 

The rating is upgraded to Outperform from Neutral and the target price increases to $1.20 from $1.05.

Target price is $1.20 Current Price is $1.08 Difference: $0.12
If TAH meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.12, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates TWE as Hold (3) -

Ord Minnett notes the latest US Nielsen wine-industry figures show continuing declines in volume and price, which has led to a -2.8% year-on-year fall in sales in the four weeks to June 18.

The broker notes Treasury Wine Estates's gap to industry sales growth has widened, sales falling -5.2% on a -10.3% volume crunch.

This was partially offset by price and mix says the broker, and the broker retains its Hold rating and $12.80 target price.

Target price is $12.80 Current Price is $11.54 Difference: $1.26
If TWE meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $13.41, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates TYR as Downgrade to Neutral from Outperform (3) -

Tyro Payments looks to achieve a full year total transaction value of $34.4bn, a miss on Macquarie's expected $35.2bn but the broker notes the discrepancy is not indicative of an economic slowdown. 

Macquarie notes weekly total transaction values have held up, as merchant growth and price inflation offsets cost of living pressures. The broker has reduced its expected total transaction value per terminal for three halves from the second half of FY23 to account for a period of subdued economic activity.

The rating is downgraded to Neutral from Outperform and the target price decreases to $0.75 from $2.15. The broker notes an increasingly competitive environment will make it hard for Tyro Payments to re-rate in the near term.

Target price is $0.75 Current Price is $0.65 Difference: $0.1
If TYR meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.69, suggesting upside of 340.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates TYR as Buy (1) -

While the announced departure of Tyro Payments CEO and Managing Director Robbie Cook adds uncertainty, UBS feels it also creates an opportunity for a ceo with a deeper financial and/or technology background.

The broker retains its $2.30 target price and Buy rating.

Target price is $2.30 Current Price is $0.65 Difference: $1.65
If TYR meets the UBS target it will return approximately 254% (excluding dividends, fees and charges).

Current consensus price target is $2.69, suggesting upside of 340.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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