Australian Broker Call

Credit Suisse rates 29M as Initiation of coverage with Outperform (1) -

Copper miner 29Metals is a favourable alternative to OZ Minerals ((OZL)) in the space, suggests Credit Suisse. The company's two mines also offer significant gold and zinc by-products and have mine lives to 2030-plus.

Management aspires to grow production by 50% over the next seven years and there is substantial exploration opportunity at and near the mine sites, the broker notes.

Coverage initiated with an Outperform rating and $2.65 target.

Target price is $2.65 Current Price is $2.47 Difference: $0.18
If 29M meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.02, suggesting upside of 19.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates 29M as Outperform (1) -

Macquarie’s commodity strategy team has upgraded its zinc price forecasts by 4-6% for 2021-2022, and 7% in the long term, due to stronger underlying zinc demand. Hence, the broker upgrades earnings forecasts, and lifts it target price for 29Metals to $3.30 from $3.

The analyst points out the company offers strong operational leverage not only to zinc but also to copper.

Target price is $3.30 Current Price is $2.47 Difference: $0.83
If 29M meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $3.02, suggesting upside of 19.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates A2M as Buy (1) -

In light of ongoing border closures and a requirement for the company to take greater control of its brand development, UBS revisits the outlook for both English-label infant formula (IF) sales and margins.

The broker believes English-label IF sales will lift from $0.5bn in FY21 to $1.0bn in FY24. It's considered this will occur with no inventory tightening, a partial recovery in daigou demand, full recovery in cross-border e-commerce and a modest lift in wholesale prices.

The broker's Buy rating is maintained and its target is reduced to NZ$12 from NZ$13.50.

Current Price is $6.07. Target price not assessed.

Current consensus price target is $6.43, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.1

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

UBS rates ABC as Neutral (3) -

Following a period of suspension of coverage, UBS now forecasts FY21 profit of $128m, based on strong housing volumes and a more positive view around lime earnings. The broker maintains its Neutral rating and lifts its target price to $3.75 from $3.13.

The boost in forecast lime earnings comes as the broker believes Adbri is providing additional tonnes to Alcoa during a transition period, despite the contract expiring on 30 June 2021. It's assumed this will last till the end of 2021.

Target price is $3.75 Current Price is $3.76 Difference: minus $0.01 (current price is over target).
If ABC meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.32, suggesting downside of -13.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Ord Minnett rates AMC as Accumulate (2) -

Consistent with guidance, Ord Minnett forecasts Amcor to deliver constant currency earnings per share growth of 14.5% in FY21 and 8% growth in FY22.

The broker expects management to set a guidance range of 5–10% when it reports the FY21 result on Wednesday, 18 August.

Heading into the result, Ord Minnett sees Amcor as a low-risk investment with a stable and highly diversified earnings stream that would appeal to investors looking for defensive exposure.

While raw material headwinds remain challenging, the broker sees a reprieve in sight.

The Accumulate rating is unchanged and the target increases to $17.50 from $17.00.

Target price is $17.50 Current Price is $15.80 Difference: $1.7
If AMC meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $17.22, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

UBS rates ASX as Neutral (3) -

UBS retains its Neutral rating and $70 target price after trading statistics were released for July.

The broker makes minor forecast earnings changes on weaker velocity assumptions in FY22, higher futures volume growth and stronger first half capital raisings.

Target price is $70.00 Current Price is $80.75 Difference: minus $10.75 (current price is over target).
If ASX meets the UBS target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $74.98, suggesting downside of -8.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates BEN as Outperform (1) -

Bendigo and Adelaide Bank announced that its collective provisions in the second half are expected to decline by around -$19m, primarily because of the improved economic outlook.

The broker lifts its EPS forecasts for FY21, given lower impairment charges though makes no change to its $11 target price. The Outperform rating is maintained.

Target price is $11.00 Current Price is $10.58 Difference: $0.42
If BEN meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $10.42, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgan Stanley rates BEN as Underweight (5) -

Bendigo and Adelaide Bank has announced its FY21 impairment charge of -$18m, implying a $1.5m benefit in the second half. Morgan Stanley notes the second half benefit includes a $19.4m collective provision release and a -$17.9m underlying charge. 

It is the broker's view that investors are unlikely to be surprised by the provision release and underlying charge. According to Bendigo and Adelaide Bank, the collective provision considers potential impacts of current and further lockdowns. 

The Underweight rating and target price of $9.90 are retained. Industry View: In-line.

Target price is $9.90 Current Price is $10.58 Difference: minus $0.68 (current price is over target).
If BEN meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.42, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates BEN as Hold (3) -

Bendigo and Adelaide Bank has pre-released its impairment expense for FY21, ahead of its result on Monday, 16 August, and Ord Minnett has adjusted its financial model accordingly.

Ord Minnett notes credit costs for FY21 were $18m, below the broker's previous estimate of $23m, while the loan loss charge reflects a $19.4m net release of the collective provision - which the broker notes is small compared to the $127.7m provision raised for the covid impact to date.

Incorporating the lower impairment charge has resulted in a 1% uplift to the broker's FY21 cash net profit forecast, while FY22 and FY23 estimates remain unchanged.

Hold recommendation and the target price of $10.70 are both unchanged.

Target price is $10.70 Current Price is $10.58 Difference: $0.12
If BEN meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $10.42, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates BHP as Outperform (1) -

In a move largely expected by Macquarie, BHP Group has approved the US$544m development of the Shenzi North oil project and US$258m to advance study work on the Trion oil project in the Gulf of Mexico.

In an initial assessment, the broker retains its Buy rating and $60 target price.

Despite the recent fall in spot iron-ore prices, earnings upgrade momentum remains strong, with a spot price scenario generating 40% and 97% higher forecast earnings than Macquarie's base case for FY22 and FY23, respectively.

Target price is $60.00 Current Price is $53.14 Difference: $6.86
If BHP meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $51.06, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Morgan Stanley rates BHP as Overweight (1) -

The BHP Group Board has approved the Shenzi North Oil project for total capital expenditure of US$544m, and the progressing of the Trion project with a budget of US$258m. 

Morgan Stanley reports the company expects Shenzi North to generate an internal rate of return of 35%, while Trion's first production is expected in FY26-FY27 given likely final investment decision by mid-2022. 

The broker notes both projects have been excluded from forecasts pending approval.

The  Overweight rating is retained with a target price of 2,360p. Industry view: In-Line. 

Target price is $53.95 Current Price is $53.14 Difference: $0.81
If BHP meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $51.06, suggesting downside of -1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

UBS rates BLD as Downgrade to Neutral from Buy (3) -

Following a period of suspension from coverage of Boral, UBS resumes with a Neutral rating and $7.35 target price (previously Buy and $5.40). The broker forecasts profit of $174m (continuing operations) for the FY21 result. 

The analyst's long-term earnings (EBIT) margin for Boral Australia is largely dependent on the transformation process, which targets a benefit of $200-250m in Australia. Fly Ash is seen as the valuation swing factor, with management currently pursuing a sale of the business.

Target price is $7.35 Current Price is $7.11 Difference: $0.24
If BLD meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.05, suggesting downside of -0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.4

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

Credit Suisse rates BSL as Neutral (3) -

The broker cites current steel spreads and an update from the company for lifting BlueScope Steel earnings forecasts. The broker has nevertheless not found evidence of outperformance versus spreads if adjusted for product mix.

This implies a return to past earnings levels if spreads normalise, the broker suggests.

Target rises to $25.20 from $22.50, Neutral retained.

Target price is $25.20 Current Price is $23.57 Difference: $1.63
If BSL meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $26.57, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgan Stanley rates CBA as Underweight (5) -

Given changes to accounting policies, Commonwealth Bank of Australia has made updates to previously reported expenses for FY20 and the first half of FY21, of around -$100m and -$25m respectively. 

Accordingly, FY20 cash profit reduces approximately -1% and FY21 first half cash profit reduces approximately -0.5%. Morgan Stanley's cash profit forecasts also reduce by less than -0.5% through to FY24.

The Underweight rating and target price of $89.00 are retained. Industry view: In-line.

Target price is $89.00 Current Price is $103.41 Difference: minus $14.41 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.54, suggesting downside of -13.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.5

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

Morgan Stanley rates CCX as Overweight (1) -

Despite City Chic Collective competitor Torrid recently listing in the US, Morgan Stanley's view is that both companies will be able to take market share from incumbents given the large and increasing total addressable market.

Torrid currently holds 3.6% US market share, while City Chic Collective holds 0.5%. In a total addressable market of US$49bn, both companies have room to increase market share in the region, according to the broker.

The Overweight rating is retained and the target price increases to $6.25 from $4.75. Industry view is In-Line.

Target price is $6.25 Current Price is $5.30 Difference: $0.95
If CCX meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.83, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

While it is Morgan Stanley's view that a shift to banking will add diversity to Challenger, the broker notes return on equity growth will not be immediate.

Challenger is acquiring MyLife MyFinance bank to expand retirement offerings, initially offering retail term deposits, small and medium loans and asset finance.

While major banks typically have higher return on equity rates than Challenger, returns are lower in institutional lending. Morgan Stanley notes it is unclear if the company will be able to broaden into higher margin small and medium loans.

The Equal-Weight rating and target price of $5.65 are retained. Industry view: In-line.

Target price is $6.50 Current Price is $5.73 Difference: $0.77
If CGF meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Credit Suisse rates CIP as Neutral (3) -

Centuria Industrial's FY21 result was in line with expectation but FY22 guidance is slightly below, when the broker had expected upside from acquisitions, flat leasing spreads and 75% of the portfolio on fixed rent reviews.

That said, revaluations have driven upside to net tangible assets and the balance sheet has the capacity for further acquisitions, albeit the market is very competitive, the broker notes.

Target rises to $3.90 from $3.42, Neutral retained.

Target price is $3.90 Current Price is $3.86 Difference: $0.04
If CIP meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 1.1% (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

Macquarie rates CIP as Outperform (1) -

Centuria Industrial REIT reported its FY21 results which were directly in-line with Macquarie's estimates and guidance. FY22 funds from operations (FFO) guidance was for no less than 18.1cps (below the broker's forecast) and DPS guidance of 17.3cps.

The broker suggests FY22 growth drivers show underlying growth and acquisitions are partially offset by an increase in responsible entity fees. The latter have resulted from significant revaluations realised in FY21. 

Despite headwinds in cashflows, Macquarie remains positive on the outlook for industrial valuations and therefore Centuria Industrial REIT. The broker maintains the Outperform rating and lifts its target price to $4 from $3.89.

Target price is $4.00 Current Price is $3.86 Difference: $0.14
If CIP meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 1.1% (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

Morgan Stanley rates CIP as Overweight (1) -

On the back of a reported funds from operations of $91.4m for FY21, Centuria Industrial REIT is guiding to a minimum 18.1 cents funds from operations per share and 17.3 cents dividend per share for FY22.

Morgan Stanley notes guidance is a slight miss on the broker's forecast, but highlights Centuria Industrial historically updates guidance throughout the year following acquisitions and that FY22 is shaping up to be another active year for acquisitions.

The Overweight rating and target price of $3.90 are retained. Industry view: In-line.

Target price is $3.90 Current Price is $3.86 Difference: $0.04
If CIP meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 1.1% (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 CIP as Downgrade to Accumulate from Buy (2) -

Centuria Industrial REIT reported FY21 funds from operations (FFO) of $91.4m, up 44% on FY20 and broadly in line with Ord Minnett’s $92.1m forecast.

The company has nearly doubled its portfolio value in the past 12 months to $2.9bn following $920m of net acquisitions and $590m in revaluations, which saw net tangible asset value (NTA) rise 36% to $3.83.

Ord Minnett notes the portfolio is in good shape with a 9.6-year average weighted average lease expiry (WALE) and a 96.9% occupancy rate, down slightly.

The broker believes Centuria Industrial REIT remains the best way to play Australian industrial and, while guidance was a touch soft, expect positive industry dynamics to continue to support the stock.

Following the recent strong run in the share price, the broker has downgraded the REIT to Accumulate from a Buy rating and raises the target to $4.10 from $4.00.

Target price is $4.10 Current Price is $3.86 Difference: $0.24
If CIP meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 1.1% (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

UBS rates CIP as Neutral (3) -

Centuria Industrial REIT's FY21 funds from operations (FFO) beat UBS estimates, with a distribution of 17cps pre-announced. The broker retains its Neutral rating and lifts the target price to $3.81 from $3.72.

Despite strong tailwinds for industrial, scope for a further re-rate in FY22 is unlikely, according to the broker. Guidance is considered to underscore this, reflecting a respectable but unexciting 2.9% growth on FY21.

The analyst sees potential for some cap rate compression though this has mostly played out over FY21.

Target price is $3.81 Current Price is $3.86 Difference: minus $0.05 (current price is over target).
If CIP 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 $3.90, suggesting upside of 1.1% (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

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

Following a period of suspension of coverage for CSR, UBS now forecasts FY22 profit of $180m, based on a more positive view of Australian housing volumes and margins. Property is valued at $900m and long-run Building Product earnings (EBIT) margins are assumed to be 11% by 2026.

The broker lowers its target price to $6.10 from $6.17 and lifts its rating to Buy from Neutral. It's felt the market is yet to fully price-in an extended housing cycle, and resulting elevated earnings.

Target price is $6.10 Current Price is $5.75 Difference: $0.35
If CSR meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.35, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in March.

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

Morgans rates DEL as Upgrade to Add from Hold (1) -

Morgans upgrades its rating to Speculative Buy from Hold, believing the share price has found a floor near $0.20, after soft trading following its IPO. The broker's target price of $0.25 is maintained.

The analyst highlights domestic spot gas prices have surged, and recent volatility in spot electricity prices have provided significant opportunities for gas fired generation.

Target price is $0.25 Current Price is $0.21 Difference: $0.04
If DEL meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates JHX as Outperform (1) -

In the wake of US homebuilders reporting, Macquarie notes trends are supportive of its investment thesis on James Hardie Industries, which reports next Tuesday, August 10. The broker retains its Outperform rating and $49.55 target price.

US builders were consistent in their message that demand remains strong and demographics, work-from-home and rates are supporting continued solid demand, points out the broker.

The analyst notes the key variance for result expectations are volumes in North America and Europe, and associated conservatism in margin expectations, compounded by concerns for freight and pulp costs.

Target price is $49.55 Current Price is $47.36 Difference: $2.19
If JHX meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $47.14, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

UBS rates JHX as Buy (1) -

UBS expects James Hardie Industries to commence the year with an upgrade to FY22 profit guidance. This is considered likely from a combination of resilient US housing activity, repairs and renovation volumes and conservative cost inflation guidance by management.

Following a period of suspension from coverage, the broker lifts its target price to $51.20 from $47 and retains its Buy rating. The analyst thinks management's input-cost-headwinds guidance of -US$100-150m is overly negative and expects only -US$90m.

North America remains the key driver of medium-term earnings momentum, points out UBS.

Target price is $51.20 Current Price is $47.36 Difference: $3.84
If JHX meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $47.14, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Morgans rates KLL as Add (1) -

Morgans downgrades its rating to Speculative Buy from Add, due to increasing near-term uncertainties. Management has flagged headwinds, and is now exploring expansion studies for Beyondie to offset the rising cost pressures that were noted in its recent quarterly.

The broker points out the company is still exploring how it would fund the expansion needed to defend margins. Morgans retains its $0.29 target price.

Target price is $0.29 Current Price is $0.22 Difference: $0.07
If KLL meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Morgan Stanley is forecasting third quarter cash profit of $1.55bn for National Australia Bank, with areas of key interest including small and medium loan growth, margin management, cost control and exposure to sectors of interest.

The broker notes National Australia Bank looks to be making good on its claim to build momentum in Australian retail banking. Data suggests the company achieved an annualised growth rate of around 8% in mortgages during the June quarter.

The Equal-Weight rating and target price of $27.20 are retained. Industry view: In-Line.

Target price is $27.20 Current Price is $26.54 Difference: $0.66
If NAB meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

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) -

While July 2021 weakness was largely expected given the 75% order growth in the previous period, Citi believes Nick Scali's 24% order growth on July 2019 was impressive given lockdown disruptions.

The broker's forecast of -13% first-half FY22 like-for-like (LFL) sales decline assumes a -40% LFL sales decline in second-quarter FY22 accounting for lockdowns and production challenges in Vietnam and Malaysia.

Citi sees the biggest risk to FY22 earnings to be extended lockdowns but notes FY22 consensus forecasts were undemanding heading into the result and expects the company to emerge from any disruption relatively stronger than competitors.

The Buy rating is retained and the target price increases to 13.80 from $12.05.

Target price is $13.80 Current Price is $12.31 Difference: $1.49
If NCK meets the Citi target it will return approximately 12% (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 NCK as Outperform (1) -

Nick Scali's FY21 result was ahead of company guidance and Macquarie expectations, with profit around 5% ahead of the top end of guidance.

The broker notes FY22 trading is encouraging, store roll-out provides momentum and the company's appetite for M&A has the potential to add value. The analyst lifts earnings forecasts and raises the target price to $13 from $11.10.

As border closures persist, the analyst predicts domestic spending towards the furniture category will likely remain supported.

Target price is $13.00 Current Price is $12.31 Difference: $0.69
If NCK meets the Macquarie target it will return approximately 6% (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 PGH as Neutral (3) -

Driven by solid growth in Pact Group's core packaging and sustainability and materials handling business, Macquarie expects the group to deliver 7% earnings per share (EPS) growth in the year ahead.

When the group reports on 18 August, the broker forecasts $92m of net profit and has raised EPS estimates for FY22 by 2%, and for FY23 by 1% based on contract manufacturing and demand bump from lockdowns.

Neutral retained, target rises to $3.90 from $3.00.

Target price is $3.90 Current Price is $3.85 Difference: $0.05
If PGH meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.56, suggesting downside of -8.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates PNI as Downgrade to Hold from Add (3) -

Morgans lifts its target price to $14.48 from $11.85 though lowers its rating to Hold from Add, as the stock is now trading in-line with valuation. The company reported FY21 group profit 107% higher than the previous corresponding period (pcp). 

Group funds under management (FUM) closed up 52% on the pcp, driven by net inflows and investment performance. Net inflow momentum accelerated in the second half, with retail inflows of $2.6bn. The broker expects strong flows of $8bn in FY22.

The analyst points out FY22 commences with starting FUM greater than 20% above average FY21 levels, supporting a ‘baseline’ earnings level (before performance fees) around FY21 levels. 

Target price is $14.48 Current Price is $14.85 Difference: minus $0.37 (current price is over target).
If PNI meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.00, suggesting downside of -3.8% (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 PNI as Buy (1) -

Ord Minnett has downgraded Pinnacle Investment Management Group to Accumulate from Buy to reflect a more challenging valuation but generally views the organic growth outlook as positive with optionality around potential acquisitions given surplus capital.

The group reported net profit of $67.0m, up 107% over the year and ahead of Ord Minnett's $63.7m forecast.

Taking into account the result, higher starting funds under management (FUM) levels, and increased return on capital assumptions the broker increases earnings per share forecasts by 6-8% over the forecast period.

The target increased to $15.20 from $12.50.

Target price is $15.20 Current Price is $14.85 Difference: $0.35
If PNI meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $15.00, suggesting downside of -3.8% (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 RDY as Outperform (1) -

Ahead of the forecast $16.9m FY21 revenue when the acquisition was announced, ReadyTech's recently acquired Open Office has achieved the first set of earnout hurdles with 12-month trailing revenue of $18.26m and recurring revenue of $11.35m.

ReadyTech noted the result demonstrates the successful integration of Open Office into the company and is pleased with the progress of the business and growth opportunities now being executed.

Macquarie notes the outlook remains strong across all business segments and has increased earnings per share estimates for FY21/22: 2%/3%.

Outperform rating is maintained and the target price increases 4% to $2.85.

Target price is $2.85 Current Price is $2.48 Difference: $0.37
If RDY meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates REA as Outperform (1) -

REA Group released FY21 financials this morning and Macquarie, upon initial assessment, believes the 122c dividend announced is better-than-expected but profits slightly disappointed on higher interest and D&A. Plus the company is facing a higher tax burden.

Plenty to like throughout the report though (strong listings), and the analysts note prices have been lifted in Australia while the investment in the Indian market continues.

All in all, Macquarie anticipates market consensus will shift upwards for revenues but downwards for estimated profits following today's release.

The broker expects yield growth to be stronger than market expectations in the medium term, which will likely underpin consensus upgrades.

Target price is $185.00 Current Price is $167.28 Difference: $17.72
If REA meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $161.07, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Citi rates RMD as Neutral (3) -

ResMed reported fourth quarter results this morning and Citi, upon initial assessment, highlights adjusted EPS were above the broker's estimate and 5% above consensus. This was thought to derive from higher-than-expected Device sales, due to the Philips product recall.

Devices revenue was around 28% above the analyst's estimate, while Masks and SaaS were roughly in-line. Geographically, Americas revenue was circa 12% above, while RoW revenue was around a 15% beat against Citi.

ResMed expects to generate incremental device revenue of US$300-350m in FY22. This includes only devices (CPAP and ventilators) and nothing for Masks, and is limited by component supply, points out the analyst. 

At this stage, Citi retains its Neutral rating and $32.50 target price.

Target price is $32.50 Current Price is $37.18 Difference: minus $4.68 (current price is over target).
If RMD meets the Citi target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.46, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Ord Minnett rates RMD as Hold (3) -

In an initial review of ResMed's fourth quarter results, Ord Minnett assesses strong revenues, that beat the broker's estimate by 4%, due to a competitor recall. However, EPS was considered a small miss on higher operating costs and higher tax.

Management noted a recovery in demand as the pandemic winds-down along with a small ongoing contribution from covid-19 related demand.

In what the analyst considers a permanent boost, guidance was for $300-350m (Ord Minnett's estimate $180m) of additional device sales from the Respironics recall in FY22. This figure made no allowance for stronger mask sales. 

The broker expect the share price to be up by low-single-digits, given the positive commentary on the expected benefit from the competitor recall. At this stage, Ord Minnett's Hold rating and $33.50 target are unchanged.

Target price is $33.50 Current Price is $37.18 Difference: minus $3.68 (current price is over target).
If RMD meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.46, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Morgans rates RMS as Add (1) -

Ramelius Resources has extended forward guidance out to FY30, with a substantial uplift in gold production forecast from FY25 onwards.

In the near term, an uplift comes from a two year life extension at the high-margin Vivien mine, overlapping with high-grade ore from the Penny project, explains Morgans.

Management has flagged price pressures in the coming years, with tighter margins only partially offset by higher production forecasts. The broker maintains its Add rating and lowers its target price to $2.05 from $2.24.

Target price is $2.05 Current Price is $1.77 Difference: $0.28
If RMS meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.12, suggesting upside of 23.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates RRL as Add (1) -

Morgans assesses a strong fourth quarter, with FY21 guidance achieved. The performance from the Rosemont underground mine proved vital. The broker maintains its Add rating and lowers its target price to $3.93 from $4.08.

Regis Resources released FY22 guidance targeting 460-515koz of gold production at an all-in sustaining cost (AISC) of $1,290-$1,365/oz. This compares to FY21 overall production of 373koz at a cost of $1,373/oz.

While Tropicana contributed two months production, a planned shutdown completed in the quarter resulted in outsized reported costs, points out the analyst.

Target price is $3.93 Current Price is $2.58 Difference: $1.35
If RRL meets the Morgans target it will return approximately 52% (excluding dividends, fees and charges).

Current consensus price target is $3.47, suggesting upside of 36.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates RSG as Neutral (3) -

Resolute Mining's plan to sell Bibiani Gold Mine to Asante Gold Corporation for US$90m cash - with no material tax implications - has received Ghanaian Ministerial Consent to proceed.

As part of the agreement, three cash payments are to be paid, with the first US$30m deposit received and following US$30m paid on or before 6 months from completion (Feb 22), and the final US$30m paid on or before 12 months from completion.

Citi expects the sale price to approximate book value with minimal profit/loss on sale.

Citi retains its Neutral rating and target price of $0.60.

Target price is $0.60 Current Price is $0.58 Difference: $0.02
If RSG meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

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

UBS expects momentum to continue, with lead indicators suggesting repairs and renovation markets should grow in FY22. This comes after the company's third quarter trading update showed a positive sales trend in the US and Europe. 

Following a period of suspension of coverage, the broker upgrades its rating to Buy from Neutral and lifts its target price to $6.16 from $4.84. A FY21 profit of $202m is forecast.

The analyst cautions the spot copper price at US$9,500/t remains a concern and represents a -$36m headwind in FY22. However, through a combination of price and cost-out, this is expected to be largely offset.

Target price is $6.16 Current Price is $5.64 Difference: $0.52
If RWC meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.56, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates S32 as Outperform (1) -

Underpinned by commodity price tailwinds, Macquarie expects South32 to report a strong FY21 result on August 19 and is forecasting revenue of US$6,283m, 3% higher year-on-year.

South32 has flagged an impairment charge of -US$728m for its Illawarra Metallurgical Coal operation and expects an effective tax rate of 35-45% for FY21.

Macquarie notes recent strength in aluminium, manganese, and coal prices have driven free cash flow yields in a spot price scenario to around 19% for FY22-24.

The broker has upgraded earnings per share estimates by 1-2% for FY22-27 to reflect the improved zinc prices outlook.

Outperform retained, target rises to $3.60 from $3.50.

Target price is $3.60 Current Price is $2.96 Difference: $0.64
If S32 meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $3.54, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates SGM as Upgrade to Outperform from Neutral (1) -

Sims' five-year improvement in earnings is impressive, Credit Suisse suggests, being not price or volume driven but reflecting cost reductions and gross margin management regardless of market conditions.

If Sims can sustain this, and volume growth is evident through a network with 20-30% of spare capacity, the company should hit its FY25 target, the broker believes.

Upgrade to Outperrform from Neutral. Target rises to $18.70 from $16.10.

Target price is $18.70 Current Price is $15.25 Difference: $3.45
If SGM meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $19.00, suggesting upside of 20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates SVW as Buy (1) -

Following the unconditional takeover of Boral ((BLD)), UBS estimates the transaction is 8-11% EPS accretive in FY22/23. With the transaction complete, it's expected investor attention will return to the operating outlook for both WesTrac and Coates.

The broker retains its Buy rating and $27.35 target price.

Target price is $27.35 Current Price is $23.83 Difference: $3.52
If SVW meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $27.87, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates TCL as Neutral (3) -

Despite traffic recovery on most toll roads through FY21, Citi believes Transurban Group's result on the 9th August will be affected by the recent Sydney lockdowns with the uncertainty around the timing of the end of lockdowns potentially impacting the ability to provide FY22 guidance.

The broker expects investor focus to be on the effect of lockdowns to date, updates on West Gate Tunnel project, and updates on flagged growth opportunities in Australia and the US.

Citi has cut first-half FY22 Sydney traffic assumptions and now expects Sydney traffic to be lower than first-half FY21.

The broker sees upside to the consensus dividend per share (DPS) forecast and is 2% to 4% ahead over FY22-FY24.

Neutral rating is unchanged and Citi's target price has lifted to $13.95 from $13.35 based on lower debt costs.

Target price is $13.95 Current Price is $14.23 Difference: minus $0.28 (current price is over target).
If TCL 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 $14.45, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates WES as Outperform (1) -

Macquarie retains an Outperform on Wesfarmers ahead of the FY21 result on 27-August and is forecasting FY21 group net profit of $2.36bn, up +17.5% on the previous period.

With ABS’ recent retail trade release for June-21 reflecting hardware, building & garden supplies spend at $9.8bn for 2H21 - 21% above second half FY19 ($9.8bn) and 2% ahead of second half FY20, the broker expects a strong result for Bunnings.

Macquarie has revised FY22 and FY23 earnings per share forecasts by 2.2% and 2.1%.

Target price increases to $63.45 from $58.12 to reflect higher peer multiples and roll-forward.

Target price is $63.45 Current Price is $63.35 Difference: $0.1
If WES meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $54.71, suggesting downside of -14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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