Australian Broker Call
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September 25, 2019
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| ILU - | ILUKA RESOURCES | Upgrade to Outperform from Neutral | Macquarie |
| NCM - | NEWCREST MINING | Downgrade to Underperform from Neutral | Macquarie |
| NHC - | NEW HOPE CORP | Downgrade to Underperform from Neutral | Macquarie |
| ORE - | OROCOBRE | Downgrade to Underperform from Neutral | Macquarie |
| S32 - | SOUTH32 | Downgrade to Underperform from Neutral | Macquarie |
| SFR - | SANDFIRE | Downgrade to Neutral from Outperform | Macquarie |
| WHC - | WHITEHAVEN COAL | Downgrade to Neutral from Outperform | Macquarie |
AHG AUTOMOTIVE HOLDINGS GROUP LIMITED
Automobiles & Components
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Overnight Price: $3.68
Macquarie - Cessation of coverage
Forecast for FY20:
Current consensus EPS estimate is 18.0, implying annual growth of N/A. Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 20.4. |
Forecast for FY21:
Current consensus EPS estimate is 21.0, implying annual growth of 16.7%. Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 17.5. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.88
Macquarie rates ALX as Neutral (3) -
Macquarie notes the Virginia Department of Transportation has signed off on a corridor study to address bottlenecks on the ramps to the Greenway/DTR interchange as has the Metropolitan Washington Airports Authority.
This should lift savings in travel time and, despite competition, the broker believes it will be positive for traffic flow. Overall, the broker remains attracted to the strong yield in the stock. Neutral rating and $8.25 target maintained.
Target price is $8.25 Current Price is $7.88 Difference: $0.37
If ALX meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $8.01, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 30.00 cents and EPS of 82.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.3, implying annual growth of 211.6%. Current consensus DPS estimate is 30.0, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 22.3. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 32.00 cents and EPS of 87.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 50.3, implying annual growth of 42.5%. Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 15.7. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $13.63
Macquarie rates APE as Initiation of coverage with Outperform (1) -
Macquarie considers the merger with Automotive Holdings compelling. The merged group is targeting $30m in synergies within the first 12 months.
AP Eagers management's track record provides confidence in execution while positioning the business to adapt to an evolving landscape.
The main catalysts over time, and the broker's view, will be improved stock liquidity and inclusion in the index.
Macquarie initiates coverage of AP Eagers with an Outperform rating and $15.60 target.
Target price is $15.60 Current Price is $13.63 Difference: $1.97
If APE meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $13.89, suggesting upside of 1.9% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 36.00 cents and EPS of 50.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 45.4, implying annual growth of -12.7%. Current consensus DPS estimate is 34.9, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 30.0. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 50.80 cents and EPS of 71.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.1, implying annual growth of 21.4%. Current consensus DPS estimate is 42.1, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 24.7. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.36
Macquarie rates AWC as Underperform (5) -
Macquarie reviews commodity price forecasts and the most significant changes are made to alumina, with reductions of -5% and -10% to forecasts for 2019 and 2020, respectively.
As a result, Alumina Ltd 2019 and 2020 earnings estimates fall -11% and -22%, respectively. Target is reduced to $1.50 from $1.80. Underperform reiterated.
Target price is $1.50 Current Price is $2.36 Difference: minus $0.86 (current price is over target).
If AWC meets the Macquarie target it will return approximately minus 36% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.30, suggesting downside of -2.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 8.66 cents and EPS of 18.93 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.6, implying annual growth of N/A. Current consensus DPS estimate is 12.4, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 12.7. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 10.36 cents and EPS of 14.63 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.7, implying annual growth of -4.8%. Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 13.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $236.91
Macquarie rates CSL as Outperform (1) -
China now accounts for an increasing proportion of the company's albumin revenue. Macquarie's forecasts assume a continuation of robust growth, supported by increasing expenditure on healthcare and the rising prevalence of chronic disease.
The broker believes CSL is well-positioned in relation to its plasma-derived products. More generally, the collection centre network is a competitive advantage relative to peers. Outperform rating and $250 target maintained.
Target price is $250.00 Current Price is $236.91 Difference: $13.09
If CSL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $241.99, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 293.93 cents and EPS of 653.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 670.6, implying annual growth of N/A. Current consensus DPS estimate is 292.8, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 35.3. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 336.36 cents and EPS of 739.71 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 764.1, implying annual growth of 13.9%. Current consensus DPS estimate is 332.9, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 31.0. |
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
Overnight Price: $7.82
Credit Suisse rates DOW as Neutral (3) -
Credit Suisse notes speculation that the Spotless division is preparing to divest the laundries business. The laundries business is assessed to be worth $300-360m and proceeds could range from $175-235m.
Management of Downer EDI had previously announced a portfolio review of its mining business, which the broker also expects to result in a divestment. The mining business is estimated to be worth $835-930m and net proceeds could be $465-560m.
Management is expected to return the bulk of proceeds to shareholders via an on-market share buyback. Credit Suisse retains a Neutral rating and raises the target to $8.00 from $7.70.
Target price is $8.00 Current Price is $7.82 Difference: $0.18
If DOW meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $8.45, suggesting upside of 8.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 31.81 cents and EPS of 48.61 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 53.4, implying annual growth of 24.5%. Current consensus DPS estimate is 31.4, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 32.65 cents and EPS of 48.15 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.7, implying annual growth of 6.2%. Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ECX ECLIPX GROUP LIMITED
Vehicle Leasing & Salary Packaging
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Overnight Price: $1.71
UBS rates ECX as Buy (1) -
The company's strategy update has revealed a level of detail and scope for cost reductions that are ahead of UBS estimates. No formal FY19 guidance was provided.
EclipX is targeting a cost to income ratio of 45% by the end of FY21 with annualised cost savings of $20m versus the broker's estimates of $10-15m.
The company is exploring monetisation opportunities for Right2Drive and is undertaking a branch reduction to preserve capital.
UBS found the update incrementally positive as an improving financial position was conveyed. Buy rating and $1.80 target maintained.
Target price is $1.80 Current Price is $1.71 Difference: $0.09
If ECX meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $1.73, suggesting upside of 1.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 0.00 cents and EPS of 11.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.4, implying annual growth of -47.5%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 0.00 cents and EPS of 15.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.3, implying annual growth of 27.9%. Current consensus DPS estimate is 6.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $7.80
Macquarie rates ILU as Upgrade to Outperform from Neutral (1) -
Macquarie upgrades to Outperform from Neutral, reflecting a view that the share price over-reacted to the downside risk in the zircon market. The broker calculates Iluka Resources is now trading on free cash flow yields of 13-15%.
Target is raised to $8.70 from $8.50. The broker assesses material upside risk to forecasts running at a spot price scenario.
Target price is $8.70 Current Price is $7.80 Difference: $0.9
If ILU meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $8.94, suggesting upside of 14.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 14.00 cents and EPS of 78.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 70.5, implying annual growth of -2.4%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 11.1. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 32.00 cents and EPS of 98.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.0, implying annual growth of 17.7%. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 9.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $37.39
Macquarie rates NCM as Downgrade to Underperform from Neutral (5) -
Following the recent rally in the share price Macquarie has downgraded to Underperform from Neutral. Target is $35.
Target price is $35.00 Current Price is $37.39 Difference: minus $2.39 (current price is over target).
If NCM meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $31.25, suggesting downside of -16.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 36.90 cents and EPS of 124.18 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 167.5, implying annual growth of N/A. Current consensus DPS estimate is 35.9, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 22.3. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 34.06 cents and EPS of 111.27 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 147.9, implying annual growth of -11.7%. Current consensus DPS estimate is 28.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 25.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.25
Citi rates NHC as Neutral (3) -
New Hope Corp's price target has declined to $2.30 from $2.55 as commodity analysts at Citi have updated their price deck forecasts. The team observes that nearly every commodity went down in price in Q3, further believing the risk skew remains to the downside.
Price forecasts for thermal coal and copper in particular have been reduced. None of the ratings for individual stocks have changed. Neutral rating thus remains intact.
Target price is $2.30 Current Price is $2.25 Difference: $0.05
If NHC meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $2.65, suggesting upside of 17.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 7.70 cents and EPS of 15.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.8, implying annual growth of -13.8%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 10.3. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 7.40 cents and EPS of 14.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.6, implying annual growth of -19.3%. Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NHC as Downgrade to Underperform from Neutral (5) -
Macquarie reduces thermal and coking coal price forecasts for 2019 and 2020, which weakens the outlook. Moreover, uncertainty surrounding the future of New Acland adds to the pressure on the stock.
Rating is downgraded to Underperform from Neutral. Target is reduced to $2.10 from $2.20.
Target price is $2.10 Current Price is $2.25 Difference: minus $0.15 (current price is over target).
If NHC meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.65, suggesting upside of 17.8% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 12.80 cents and EPS of 25.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.8, implying annual growth of -13.8%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 10.3. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 5.00 cents and EPS of 9.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.6, implying annual growth of -19.3%. Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $11.71
Macquarie rates NST as Outperform (1) -
The mill at Pogo will undergo a US$30m upgrade to lift capacity to 1.3mtpa. Macquarie also notes doubling the mine development rates will remove the current constraints.
The broker continues to be impressed by the exploration potential, and in-mine drilling has already delivered meaningful upgrades to reserves and resources.
Macquarie maintains an Outperform rating and raises the target to $15.00 from $14.20.
Target price is $15.00 Current Price is $11.71 Difference: $3.29
If NST meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $11.53, suggesting downside of -1.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 16.00 cents and EPS of 48.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 62.5, implying annual growth of 156.1%. Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 19.00 cents and EPS of 72.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 74.0, implying annual growth of 18.4%. Current consensus DPS estimate is 18.2, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 15.8. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.14
Credit Suisse rates OGC as Outperform (1) -
The exploration target at Waihi has increased to 8-10mt at 4-6g/t as drilling results continue to exceed expectations for the Martha underground operation.
A study is progressing to evaluate the potential upgrade to the existing Waihi plant based on the results and potential of WKP. WKP is 10km from Martha and the maiden resource of 635,000 ounces is expected to grow significantly.
Outperform rating and $4.25 target maintained.
Target price is $4.25 Current Price is $4.14 Difference: $0.11
If OGC meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $4.78, suggesting upside of 15.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 4.26 cents and EPS of 14.55 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.7, implying annual growth of N/A. Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 22.1. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 5.62 cents and EPS of 19.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.1, implying annual growth of 93.0%. Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 11.5. |
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
Overnight Price: $2.62
Macquarie rates ORE as Downgrade to Underperform from Neutral (5) -
Macquarie downgrades to Underperform from Neutral. Target is $2.50.
Target price is $2.50 Current Price is $2.62 Difference: minus $0.12 (current price is over target).
If ORE meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.82, suggesting upside of 46.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 2.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 3.0, implying annual growth of -85.6%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 87.3. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of 15.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 5.0, implying annual growth of 66.7%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 52.4. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.61
Citi rates S32 as Buy (1) -
Price target for South32 has risen to $3.40 from $3.10 as commodity analysts at Citi have updated their price deck forecasts. The team observes that nearly every commodity went down in price in Q3, further believing the risk skew remains to the downside.
Price forecasts for thermal coal and copper in particular have been reduced. None of the ratings for individual stocks have changed. Buy rating thus remains intact. South32's forecasts have increased by 22% and 24% respectively for this year and next.
Target price is $3.40 Current Price is $2.61 Difference: $0.79
If S32 meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $3.20, suggesting upside of 22.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 12.77 cents and EPS of 24.55 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.0, implying annual growth of N/A. Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 18.45 cents and EPS of 35.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.8, implying annual growth of 21.8%. Current consensus DPS estimate is 13.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 9.7. |
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
Macquarie rates S32 as Downgrade to Underperform from Neutral (5) -
Reductions to alumina and coking coal price forecasts have weakened the earnings outlook for South32 and Macquarie downgrades to Underperform from Neutral.
The broker notes the company has started to materially underperform both BHP Group ((BHP)) and Rio Tinto ((RIO)).
The absence of iron ore in the portfolio and the declining alumina and aluminium prices have combined to drive the underperformance, in Macquarie's view. Target is reduced to $2.60 from $2.70.
Target price is $2.60 Current Price is $2.61 Difference: minus $0.01 (current price is over target).
If S32 meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.20, suggesting upside of 22.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 7.66 cents and EPS of 19.16 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.0, implying annual growth of N/A. Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 6.95 cents and EPS of 17.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.8, implying annual growth of 21.8%. Current consensus DPS estimate is 13.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 9.7. |
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
Overnight Price: $6.53
Macquarie rates SFR as Downgrade to Neutral from Outperform (3) -
Following the recent rally in the share price, Macquarie downgrades to Neutral from Outperform. Target is steady at $6.80.
Target price is $6.80 Current Price is $6.53 Difference: $0.27
If SFR meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $7.11, suggesting upside of 8.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 22.00 cents and EPS of 61.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.6, implying annual growth of 26.6%. Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 7.9. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 31.00 cents and EPS of 89.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 107.1, implying annual growth of 29.7%. Current consensus DPS estimate is 34.4, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 6.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.01
Morgan Stanley rates SLC as Equal-weight (3) -
Superloop has announced a $90m re-capitalisation plan to pay down debt. FY20 guidance for operating earnings (EBITDA) of $14-16m was reiterated.
Morgan Stanley notes, at this stage, it is not clear if the largest shareholder, Bevan Slattery, will participate in the raising.
However, the move de-risks the balance sheet, which the broker considers positive. The longer term opportunity in connectivity remains intact although sales momentum has been below Morgan Stanley's expectations.
Equal-weight rating, $1.10 target and In-Line industry view maintained.
Target price is $1.10 Current Price is $1.01 Difference: $0.09
If SLC meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 4.00 cents. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 EPS of minus 1.00 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TWE TREASURY WINE ESTATES LIMITED
Food, Beverages & Tobacco
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Overnight Price: $17.99
Citi rates TWE as Sell (5) -
Citi analysts report back from the company's Investor Day that management has grabbed the opportunity to outline its focus on growing market share, particularly through increased premium wine sales mix and sourcing wine from different countries.
Citi analysts seem not convinced, instead arguing any success will involve a step change in market share in the US market, where the past three years have seen a decline in market share. Otherwise, the strategy comes with plenty of execution risk, they point out.
Also, the analysts highlight Treasury's average price per case remains below the industry average in Australia, the UK and the US. Sell rating retained with the analysts remaining sceptical as ever, and sticking with a price target of $15.60.
Target price is $15.60 Current Price is $17.99 Difference: minus $2.39 (current price is over target).
If TWE 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 $18.66, suggesting upside of 3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 46.00 cents and EPS of 71.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.1, implying annual growth of 25.2%. Current consensus DPS estimate is 46.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 24.6. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 54.00 cents and EPS of 81.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.7, implying annual growth of 18.6%. Current consensus DPS estimate is 55.8, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates TWE as Accumulate (2) -
The company has reiterated FY20 earnings (EBITS) growth forecasts of 15-20%. The vintage of 2018 is high-quality which should provide a boost to FY21, Ord Minnett notes.
The company had considered a spin-off of the commercial business but has not progressed as margins have subsequently improved. A 25% EBITS margin target has been set for the Americas which the broker considers fair.
Accumulate rating and $20 target maintained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $20.00 Current Price is $17.99 Difference: $2.01
If TWE meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $18.66, suggesting upside of 3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 47.00 cents and EPS of 73.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.1, implying annual growth of 25.2%. Current consensus DPS estimate is 46.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 24.6. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 59.00 cents and EPS of 93.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.7, implying annual growth of 18.6%. Current consensus DPS estimate is 55.8, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates TWE as Buy (1) -
Treasury Wine has reiterated FY20 earnings (EBITS) guidance for growth of 15-20% and flagged a slight skew to the second half.
UBS observes the company is confident in the long-term opportunity and the main drivers of growth will be margins in the US and the top line in Asia.
The broker envisages potential upside to guidance given favourable currency movements. Buy rating and $20.50 target maintained.
Target price is $20.50 Current Price is $17.99 Difference: $2.51
If TWE meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $18.66, suggesting upside of 3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 48.70 cents and EPS of 74.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.1, implying annual growth of 25.2%. Current consensus DPS estimate is 46.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 24.6. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 60.10 cents and EPS of 92.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.7, implying annual growth of 18.6%. Current consensus DPS estimate is 55.8, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 20.7. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.13
Citi rates WHC as Buy (1) -
Whitehaven Coal's price target has declined to $3.70 from $4 as commodity analysts at Citi have updated their price deck forecasts. The team observes that nearly every commodity went down in price in Q3, further believing the risk skew remains to the downside.
Price forecasts for thermal coal and copper in particular have been reduced. None of the ratings for individual stocks have changed. Buy rating thus remains intact.
Target price is $3.70 Current Price is $3.13 Difference: $0.57
If WHC meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $4.00, suggesting upside of 27.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 23.00 cents and EPS of 17.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.8, implying annual growth of -55.5%. Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 13.2. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 9.00 cents and EPS of 18.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.9, implying annual growth of 4.6%. Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WHC as Downgrade to Neutral from Outperform (3) -
Reductions to 2019 and 2020 coking coal estimates and 2019 reductions for thermal coal have weakened the outlook and Macquarie downgrades to Neutral from Outperform. Target is reduced to $3.40 from $4.00.
Target price is $3.40 Current Price is $3.13 Difference: $0.27
If WHC meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $4.00, suggesting upside of 27.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 12.00 cents and EPS of 24.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 23.8, implying annual growth of -55.5%. Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 13.2. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 5.00 cents and EPS of 23.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.9, implying annual growth of 4.6%. Current consensus DPS estimate is 12.6, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 12.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| AHG | AUTOMOTIVE HOLDINGS | $3.68 | Macquarie | N/A | 2.65 | -100.00% |
| ALX | ATLAS ARTERIA | $7.88 | Macquarie | 8.25 | 8.12 | 1.60% |
| AWC | ALUMINA | $2.36 | Macquarie | 1.50 | 1.80 | -16.67% |
| BHP | BHP | $36.56 | Macquarie | 40.00 | 41.00 | -2.44% |
| CIA | CHAMPION IRON | $2.58 | Macquarie | 4.20 | 4.30 | -2.33% |
| DOW | DOWNER EDI | $7.82 | Credit Suisse | 8.00 | 7.70 | 3.90% |
| FMG | FORTESCUE | $8.55 | Macquarie | 10.10 | 10.60 | -4.72% |
| ILU | ILUKA RESOURCES | $7.80 | Macquarie | 8.70 | 8.50 | 2.35% |
| MLX | METALS X | $0.19 | Macquarie | 0.17 | 0.16 | 6.25% |
| NHC | NEW HOPE CORP | $2.25 | Citi | 2.30 | 2.55 | -9.80% |
| Macquarie | 2.10 | 2.20 | -4.55% | |||
| NST | NORTHERN STAR | $11.71 | Macquarie | 15.00 | 14.20 | 5.63% |
| OZL | OZ MINERALS | $9.49 | Macquarie | 12.00 | 11.70 | 2.56% |
| RIO | RIO TINTO | $91.00 | Macquarie | 110.00 | 114.00 | -3.51% |
| S32 | SOUTH32 | $2.61 | Citi | 3.40 | 3.10 | 9.68% |
| Macquarie | 2.60 | 2.70 | -3.70% | |||
| WHC | WHITEHAVEN COAL | $3.13 | Citi | 3.70 | 4.00 | -7.50% |
| Macquarie | 3.40 | 4.00 | -15.00% |
Summaries
| AHG | AUTOMOTIVE HOLDINGS | Cessation of coverage - Macquarie | Overnight Price $3.68 |
| ALX | ATLAS ARTERIA | Neutral - Macquarie | Overnight Price $7.88 |
| APE | AP EAGERS | Initiation of coverage with Outperform - Macquarie | Overnight Price $13.63 |
| AWC | ALUMINA | Underperform - Macquarie | Overnight Price $2.36 |
| CSL | CSL | Outperform - Macquarie | Overnight Price $236.91 |
| DOW | DOWNER EDI | Neutral - Credit Suisse | Overnight Price $7.82 |
| ECX | ECLIPX GROUP | Buy - UBS | Overnight Price $1.71 |
| ILU | ILUKA RESOURCES | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $7.80 |
| NCM | NEWCREST MINING | Downgrade to Underperform from Neutral - Macquarie | Overnight Price $37.39 |
| NHC | NEW HOPE CORP | Neutral - Citi | Overnight Price $2.25 |
| Downgrade to Underperform from Neutral - Macquarie | Overnight Price $2.25 | ||
| NST | NORTHERN STAR | Outperform - Macquarie | Overnight Price $11.71 |
| OGC | OCEANAGOLD | Outperform - Credit Suisse | Overnight Price $4.14 |
| ORE | OROCOBRE | Downgrade to Underperform from Neutral - Macquarie | Overnight Price $2.62 |
| S32 | SOUTH32 | Buy - Citi | Overnight Price $2.61 |
| Downgrade to Underperform from Neutral - Macquarie | Overnight Price $2.61 | ||
| SFR | SANDFIRE | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $6.53 |
| SLC | SUPERLOOP | Equal-weight - Morgan Stanley | Overnight Price $1.01 |
| TWE | TREASURY WINE ESTATES | Sell - Citi | Overnight Price $17.99 |
| Accumulate - Ord Minnett | Overnight Price $17.99 | ||
| Buy - UBS | Overnight Price $17.99 | ||
| WHC | WHITEHAVEN COAL | Buy - Citi | Overnight Price $3.13 |
| Downgrade to Neutral from Outperform - Macquarie | Overnight Price $3.13 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 9 |
| 2. Accumulate | 1 |
| 3. Hold | 6 |
| 5. Sell | 6 |
Wednesday 25 September 2019
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the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
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should contact their personal adviser before making any investment decision.
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