Australian Broker Call

Macquarie rates AIZ as Outperform (1) -

Macquarie updates forecasts for changes to its oil price outlook over 2018/19. The broker's proprietary airfare database continues to be favourable for the company, with improved yields expected to offset fuel headwinds in the near-term.

Forecasts for FY18 and FY19 are reduced by -1.5% and -1.1% respectively.

Outperform maintained. Target is NZ$3.90.

Current Price is $2.99. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: -0.3

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

Citi rates EVT as Sell (5) -

The Australian weekly box office is currently down -15% to date, albeit improving from a trough seen in late August.

While acknowledging that the film slate is improving, Citi retains a Sell rating because of domestic market concerns such as industry-wide discounting, a loss of market share to Hoyts recliner re-seat strategy and margin pressure from electricity prices. Target is $11.30.

Target price is $11.30 Current Price is $13.17 Difference: minus $1.87 (current price is over target).
If EVT meets the Citi target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Ord Minnett rates EXP as Buy (1) -

The company has recently announced the acquisition of Big Cat Green Island Reef Cruises and Tropical Journeys for $56.07m. The purchases are to be funded by a $60.6m equity entitlement offer.

Given the extensive range of assets now at the company's disposal in Far North Queensland, Ord Minnett now considers it reasonable that both cost and revenue synergies will be realised.

The broker increases the price target to $1.02 from $0.90. Buy rating maintained on a strong growth outlook and the likelihood of further adventure tourism acquisitions.

Target price is $1.02 Current Price is $0.88 Difference: $0.14
If EXP meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

UBS rates FBU as Buy (1) -

The New Zealand government has indicated it will build a proposed 100,000 affordable homes over the next 10 years, which UBS calculates, all else being equal could boost residential construction expenditure by around 10%.

 Moreover, a further NZ$700m will be spent on home insulation grants and tourism infrastructure over the next five years. The broker estimates the Auckland housing shortage is currently at around -30,000 and continues to worsen.

The stock remains one of the few large NZ stocks where the broker envisages value and a Buy rating is maintained. Target is NZ$8.35.

Current Price is $6.96. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.5

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

Macquarie rates GMA as Outperform (1) -

The company has updated premium earnings and 2017 guidance. While the changes affect 2017 distributions, December quarter claims are lower than Macquarie expected.

The broker reduces forecasts for earnings per share by -7.9% for 2017 and by -0.9% for 2018. Outperform rating retained. Target is raised to $3.76 from $3.66.

Target price is $3.76 Current Price is $3.05 Difference: $0.71
If GMA meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates GMA as Sell (5) -

The company's review of earnings suggests a meaningful negative hit to medium-term estimates. UBS is not surprised by the outcome, as its negative view was primarily based on a deteriorating loss ratio over 2-3 years, as housing imbalances normalise.

The broker reflects the news with medium-term downgrades to estimates of -22% in FY18 and -10% in FY19. A Sell rating is retained, reflecting downside valuation risks along with macro housing concerns. Target is $2.60.

Target price is $2.60 Current Price is $3.05 Difference: minus $0.45 (current price is over target).
If GMA meets the UBS target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

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

Macquarie Group has sold its 11.3% principle holding in Macquarie Atlas ((MQA)). Morgan Stanley estimates the total gain on sale was over $200m, although most of this was already booked in the first half when the company re-classified and marked to market its investment.

The broker estimates a gain on sale to be booked in the second half of around $40m. Equal-weight rating and In-Line industry view retained. Target is $100.

Target price is $100.00 Current Price is $98.14 Difference: $1.86
If MQG meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $96.39, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Macquarie rates MYR as Neutral (3) -

Total sales for the second quarter to the end of November were down -2.3% and sales during the first two weeks of December have further weakened, down -5.0%.

Underlying first half net profit is expected to be materially below the prior corresponding half, although no specific guidance has been provided.

Macquarie expects earnings to remain under pressure and believes the execution risk on the New Myer strategy is high. Potential corporate activity suggests some support for the share price.

Neutral maintained. Target is $0.72.

Target price is $0.72 Current Price is $0.64 Difference: $0.08
If MYR meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $0.62, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.4

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

Citi rates ORI as Sell (5) -

The company has signalled a recovering outlook for the medium term, underpinned by improving volume and fading headwinds from negative price re-sets.

Citi still expects the impact of price re-sets will remain negative in FY19 and forecasts this to be around -$30m.

FY18 guidance is unchanged, although the company has indicated that planned maintenance at  Kooragang Island and Burrup in the first half will mean the profit is skewed to the second half.

The company confirmed it had a new contract with BHP ((BHP)) in the Pilbara, and the contract means Burrup will be fully loaded by FY20.

Target is $17. Sell maintained.

Target price is $17.00 Current Price is $18.17 Difference: minus $1.17 (current price is over target).
If ORI meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.37, suggesting upside of 1.1% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Deutsche Bank rates ORI as Hold (3) -

The company has affirmed its outlook for 2018, with performance expected to be skewed to the second half as maintenance at Kooragang Island and Burrup is carried out.

The contract from BHP ((BHP)) is expected to ensure the Burrup plant is fully loaded in 2020. The company has also signalled a potential technology acquisition of around $100-200m.

Deutsche Bank finds the outlook for FY19 much better, given the volume growth, efficiency benefits and stable pricing.

Hold retained. Target is $19.40.

Target price is $19.40 Current Price is $18.17 Difference: $1.23
If ORI meets the Deutsche Bank target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $18.37, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Macquarie rates ORI as Neutral (3) -

The company now expects FY18 ammonium nitrate volumes to be at the upper end of prior guidance. Macquarie forecasts 3% volume growth, similar to FY17.

Maintenance is planned for Kooragang Island and Burrup in the first half, which means the performance will be skewed to the second half.

The main story for Macquarie is that the company is on a growth trajectory should there be no more negative surprises in FY18.

Neutral rating retained. Target reduces to $19.60 from $19.62.

Target price is $19.60 Current Price is $18.17 Difference: $1.43
If ORI meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $18.37, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

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

The company is now guiding to volume growth at the upper end of guidance for FY18. This is consistent with Morgan Stanley's forecasts for 3-4% growth.

No new or unexpected price re-sets are considered likely in FY19. The company has also confirmed a successful tender on the BHP ((BHP)) contract, which is expected to allow Burrup to be fully loaded from 2020.

Equal-weight maintained. Target is $16.50. Industry view is Cautious.

Target price is $16.50 Current Price is $18.17 Difference: minus $1.67 (current price is over target).
If ORI meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.37, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Macquarie rates OSH as Outperform (1) -

The company has outlined its expansion on the Alaskan North Slope as well as an update on PNG growth. Macquarie welcomes the increased clarity around the development in Alaska but remains conservative with its base case assumptions.

Meanwhile, in PNG expansion is on track with management expecting to deliver commercial terms and project structure in the New Year.

Outperform rating maintained. Target price is $7.90.

Target price is $7.90 Current Price is $7.38 Difference: $0.52
If OSH meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $7.88, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.3

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

Macquarie rates RIO as Outperform (1) -

OyuTolgoi copper production for 2018 is guided at 125-150,000t and gold at 240-280,000 ozs.

Macquarie updates forecasts in line with the mid point of guidance, which results in a 90% upgrade to gold production forecasts for Oyu Tolgoi, slightly offset by a -29% downgrade to copper production.

Although Oyu Tolgoi currently represents around just 7% of the company's share of copper production the broker expects it will grow to 40% and contribute more than Escondida within 20 years.

Outperform rating. Target is $82.

Target price is $82.00 Current Price is $71.32 Difference: $10.68
If RIO meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $77.31, suggesting upside of 8.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.8

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

Ord Minnett rates SIQ as Accumulate (2) -

The company has provided a positive surprise against Ord Minnett's expectations, now expecting to report 2017 net profit of $64.0m. Recent acquisitions are tracking ahead of expectations, supported by slightly better organic growth.

Smartgroup has announce the acquisition of Fleet West for $9.0m and expects this to contribute $2.2m in operating earnings in 2018.

The broker raises the target to $11.15 from $9.60 and maintains an Accumulate rating.

Target price is $11.15 Current Price is $11.04 Difference: $0.11
If SIQ meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $10.06, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.6

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

Macquarie rates TAH as Reinstate Coverage with Outperform (1) -

Macquarie resumes coverage with an Outperform rating and $5.88 target. The company has finalised the Tatts ((TTS)) transaction.

Macquarie includes a $500m share buyback in FY19, but would not be surprised if Tabcorp pursues other capital management initiatives such as a special dividend, or retains flexibility for opportunities such as Western Australia's TAB or lottery business.

Target price is $5.88 Current Price is $5.32 Difference: $0.56
If TAH meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $5.13, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Morgans rates TCL as Hold (3) -

The company is undertaking a $1.9bn entitlement offer to support the funding of the West Gate tunnel project which has reached contractual close with the Victorian government.

The capital raising dilutes near-term metrics but the project delivers long-term value, Morgans observes. The broker expects Transurban to be able to deliver mid-to-high single digit growth in distributions in subsequent years.

Hold rating maintained. Target is raised to $12.65 from $11.94.

Target price is $12.65 Current Price is $12.84 Difference: minus $0.19 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.04, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Citi rates VRL as Sell (5) -

The Australian weekly box office is currently down -15% to date, albeit improving from a trough seen in late August.

While acknowledging that the film slate is improving, Citi retains a Sell rating because of domestic market concerns such as industry-wide discounting, a loss of market share to Hoyts recliner re-seat strategy and margin pressure from electricity prices. Target is  $3.50.

Target price is $3.50 Current Price is $3.87 Difference: minus $0.37 (current price is over target).
If VRL meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.69, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.5

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