Australian Broker Call

Macquarie rates ALD as Outperform (1) -

Ampol has reportedly approached Z Energy ((ZEL)) with a takeover offer. According to Macquarie the potential takeover is in line with Ampol's strategy given its near saturation in the Australian market. 

Z Energy's earnings volatility has decreased following the closure of the company's Marsden Point refinery and conversion to an import terminal. Macquarie notes this was likely a catalyst for Ampol's offer. 

The broker notes a takeover would increase Ampol's New Zealand market share to 60%, and the New Zealand Commerce Commission may assess necessary divestment. 

The Outperform rating and target price of $34.95 are retained. 

Target price is $34.95 Current Price is $28.03 Difference: $6.92
If ALD meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $31.79, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in December.

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 ANN as Overweight (1) -

In anticipation of FY21 results and FY22 guidance on August 24, Morgan Stanley expects a decline in EPS to US$1.81 (consensus US$1.80) in FY22 from US$2.02 (consensus US$1.93) for FY21.

The broker expects the healthcare division to contract in FY22 as pandemic related surge demand wanes on tough comparisons. This is
expected to be tempered by a continued acceleration in Industrial & Surgical.

The analyst feels the key debate will center around Ansell's ability to still grow FY22 EPS against Morgan Stanley's expected circa -10% decline. The broker maintains the Overweight rating and $51 target price. Industry view is In-Line.

Target price is $51.00 Current Price is $40.97 Difference: $10.03
If ANN meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $44.99, suggesting upside of 12.1% (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

Citi rates AX1 as Downgrade to Sell from Neutral (5) -

Citi envisages the current multiple of 22x FY22 price/earnings reflects little risk stemming from recurring lockdowns, disrupted sales and casual employment. There is also less stimulus in the economy compared with the same time in 2020 amid increasing supply chain risks.

For example, key supplier Adidas has recently indicated it was affected by factory lockdowns in Vietnam.The broker now expects like-for-like sales in the first half will decline by -7.5%.

Rating is downgraded to Sell from Neutral and the target reduced to $2.50 from $3.10.

Target price is $2.50 Current Price is $2.80 Difference: minus $0.3 (current price is over target).
If AX1 meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.72, suggesting upside of 3.7% (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

Morgans rates BBT as Add (1) -

BlueBet Holdings has entered into an exclusive agreement with the Colorado River Indian Tribes (CRIT) and BlueWater Resort & Casino (owned by CRIT) to pursue online sports betting market-access in Arizona.

Morgans views this favourably and notes it helps mitigate the risk of an unsuccessful outcome in Virginia (decision still expected in first quarter of 2022).

The analyst leaves forecasts and valuation unchanged and awaits a decision on the application before incorporating the opportunity into estimates. The Add rating and $2.44 target price are unchanged.

Target price is $2.44 Current Price is $2.06 Difference: $0.38
If BBT meets the Morgans target it will return approximately 18% (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

Citi rates CBA as Neutral (3) -

In an initial take on today's FY21 result, Citi assesses it is relatively in-line, albeit with a number of positive and negative one-off items. However, the result was considered overshadowed by a $6bn off-market buy-back announcement, ahead of the broker's forecast $5bn.

The analyst believes investors will receive the capital return announcement well, but will be starting to ask at what point is it priced-in. Operationally, the broker was surprised by the narrowness of revenue growth, which was confined to A&NZ mortgages.

Business banking revenues declined despite strong volume growth, and system excess liquidity was evident in lower trading revenues and continued contraction in Institutional Banking and Markets (IB&M).

The dovidend of $3.50 was slightly better than Citi's expectations of $3.45. The broker retains its Buy rating and $96.75 target price.

Target price is $96.75 Current Price is $106.56 Difference: minus $9.81 (current price is over target).
If CBA meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.54, suggesting downside of -17.2% (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 CBA as Underperform (5) -

Having had an initial glance over today's FY21 release, Macquarie doesn't think investors will be surprised. Both the financial result as the $6bn buyback announced should be broadly in line with expectations, says the broker.

What is important, in Macquarie's view, is this remains Australia's premium bank, but its shares are trading at a super-premium multiple.

Underperform. Target $88.50.

Target price is $88.50 Current Price is $106.56 Difference: minus $18.06 (current price is over target).
If CBA meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $89.54, suggesting downside of -17.2% (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

Citi rates CGF as Neutral (3) -

Citi finds little in the results to change its view assessing, while FY22 guidance has probably been set conservatively, the FY22 return on equity target of the cash rate plus 12% is "rather paltry".

Theoretically, this could improve in time from growth in the funds management business and scaling of the recently-acquired bank. The broker retains a Neutral rating and raises the target to $6.10 from $6.00.

Target price is $6.10 Current Price is $5.89 Difference: $0.21
If CGF meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Credit Suisse rates CGF as Neutral (3) -

FY21 results were in line with Credit Suisse estimates. Nevertheless, volatility was prominent. The benefit of a higher COE will margin did not flow through to the bottom line and it was the result of a one-off early ABS instrument repayment and higher year-end distributions.

Annuity book growth of 0.3% benefited from strong sales in Japan without which there would have been no growth.

Credit Suisse reiterates a Neutral rating with a $6.05 target, asserting the retirement of the CEO raises the prospect of Challenger as an M&A target.

Target price is $6.05 Current Price is $5.89 Difference: $0.16
If CGF meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Macquarie rates CGF as Neutral (3) -

Challenger's released results for FY21 were in line with guidance provided in June, and the company has reiterated guidance for FY22, expecting pre-tax profit of $430-480m. 

Macquarie notes at midpoint this guidance implies a Life cost of equity margin of around 2.5% in FY22. The broker highlighted the strong Life book growth of 14.4% and total Life sales of $6.9bn in FY21. 

The Neutral rating is retained and the target price increases to $5.70 from $5.30.

Target price is $5.70 Current Price is $5.89 Difference: minus $0.19 (current price is over target).
If CGF meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.01, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

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

Morgan Stanley noted few surprises after Challenger's in-line FY21 result and intact FY22 guidance. Normalised profit (PBT) was -1% below estimates. Within this, revenues beat by around 1.5% though costs increased by 5%.

The broker's normalised profit forecasts are broadly unchanged. The price target falls to $5.60 from $5.65 and the Equal-weight rating is unchanged. Industry view: In-line.

While a move into banking (prior Mylife MyFinance acquisition) adds diversity and reduces earnings volatility, the analyst is not sure if it can lift group return on equity. Returns are lower in institutional lending and it is considered sub-scale versus the major banks.

Target price is $5.60 Current Price is $5.89 Difference: minus $0.29 (current price is over target).
If CGF meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.01, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Morgans rates CGF as Add (1) -

Most metrics from the FY21 result for Challenger were in-line with recently provided guidance, assesses Morgans. FY22 guidance was unchanged with profit (NPBT) to be in the range of $430m-$480m.

The broker highlights a 35% rise in FY21 total Life sales on the previous corresponding period. This was considered to be a robust divisional result for Funds Management, when combined with strong funds under management (FUM) growth. 

The analyst sees the result as the bottoming of earnings, with sales momentum appearing to be improving and life margins stabilising. The Add rating is maintained and the target price increases to $6.49 from $6.45.

Target price is $6.49 Current Price is $5.89 Difference: $0.6
If CGF meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

UBS rates CGF as Neutral (3) -

FY21 pre-tax profit was in line with UBS forecasts. Challenger has confirmed FY22 guidance of $430-480m.

Life spread margins now appear to have stabilised and retail life sales remain buoyant. Although the outlook for the first quarter may be soft because of the pandemic UBS still expects double-digit net book growth.

The main surprise for UBS was the announcement of the retirement of the CEO in March 2022, as the timing is ahead of potential regulatory catalysts and could overhang the stock in the short term.

Neutral maintained. Target rises to $6.10 from $5.80.

Target price is $6.10 Current Price is $5.89 Difference: $0.21
If CGF meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.01, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.1

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

Citi rates CPU as Sell (5) -

The FY21 result was largely in line with prior guidance, Citi notes. Guidance for FY22 management EPS growth of 2% on constant FX is similar to the broker's forecasts.

What is surprising to Citi is guidance for margin income of US$107m in the legacy book in FY22 as this is well ahead of prior indications. Only a modest recovery in mortgage servicing is expected as government restrictions continue to impact.

Citi suspects FY21 will be the bottom of the earnings cycle while the rebound in FY22 is only likely to be slight. Sell rating and $15 target retained.

Target price is $15.00 Current Price is $16.29 Difference: minus $1.29 (current price is over target).
If CPU meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.96, suggesting upside of 9.7% (ex-dividends)

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: 0.1

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

Morgan Stanley rates CPU as Overweight (1) -

The FY21 result was in-line with Morgan Stanley and consensus. FY22 guidance was around -1% below the analyst's estimate. 

The broker retains its Overweight rating, given the exposure to higher rates, the CCT acquisition remains on track, other growth options and an around US$30m improvement in cost targets. The $17.60 price target is unchanged. Industry view is In-Line.

Target price is $17.60 Current Price is $16.29 Difference: $1.31
If CPU meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $17.96, suggesting upside of 9.7% (ex-dividends)

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: 0.1

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

UBS rates CPU as Neutral (3) -

At first glance, UBS considers the FY21 results soft, albeit broadly in line with forecasts, and suspects the market was too optimistic on the underlying earnings outlook for FY22 while unlikely to give full credit to margin income upside.

Beyond FY22, Computershare has lifted its cost saving estimates by $30m. FY22 growth guidance for earnings per share is 2% or 53.4c.

Neutral maintained. Target is $16.25.

Target price is $16.25 Current Price is $16.29 Difference: minus $0.04 (current price is over target).
If CPU 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 $17.96, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in June.

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: 0.1

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

Credit Suisse rates CRN as Outperform (1) -

The Coronado Global Resources first half result was in line with expectations. Management's priority is deleveraging and strengthening the balance sheet ahead of expected opportunities for acquisitions, as major miners shed their coal assets.

A reinstatement of the dividend is possible but Credit Suisse suspects management is more interested in growth.

2021 earnings estimates are reduced by -22% and the dividend pay-out ratio is lowered to zero in 2022 and 30% in 2023. Outperform maintained. Target is $1.60.

Target price is $1.60 Current Price is $0.97 Difference: $0.63
If CRN meets the Credit Suisse target it will return approximately 65% (excluding dividends, fees and charges).

Current consensus price target is $1.33, suggesting upside of 32.8% (ex-dividends)

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: 1.0

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

Macquarie rates CRN as Outperform (1) -

While Coronado Global Resources' revenue and underlying earnings for the first half were largely in line with expectations, the company's net loss for the period was 54% higher than forecast.

Macquarie notes the discrepancy was due to higher depreciation and amortisation, finance and tax charges. The company is guiding to a stronger second half, with coal pricing negotiations expected to drive a pricing tailwind 

Given first half results, the broker has reduced earnings per share forecasts for 2021 by -44% which has also driven a decrease in the target price of -8%. 

The Outperform rating is retained and the target price decreases to $1.10 from $1.20. 

Target price is $1.10 Current Price is $0.97 Difference: $0.13
If CRN meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.33, suggesting upside of 32.8% (ex-dividends)

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: 1.0

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

Morgans rates CRN as Add (1) -

Morgans assesses no surprises in the first half result, given quarterly financial releases, though was pleased by unchanged 2021 guidance, which implies stronger second half volumes. A second half net cash position and modest dividends beyond that are expected.

The broker points out the company has always been a leveraged met coal price play more than a play on production growth or development. As a result of materially higher second half coal prices the target rises to $1.21 from $1.06. Add rating maintained.

Target price is $1.21 Current Price is $0.97 Difference: $0.24
If CRN meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $1.33, suggesting upside of 32.8% (ex-dividends)

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: 1.0

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

Macquarie rates DXS as Neutral (3) -

Dexus' acquisition of APN Property has been approved by the APN Property unitholders and the Supreme Court of Victoria. Macquarie expects the transaction to be around 1% accretive to adjusted funds from operations and is forecasting adjusted funds from operations for FY22 of 52.5 cents per share. 

This follows Macquarie increasing adjusted funds from operations by around 4.3% in recent weeks following the acquisition of Capital Square T1. 

The Neutral rating is retained and the target price increases to $11.04 from $10.99. 

Target price is $11.04 Current Price is $10.46 Difference: $0.58
If DXS meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $10.63, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Macquarie rates EHE as Outperform (1) -

Macquarie considers the medium to longer-term outlook for the aged-care sector favourable, despite volatility related to the pandemic.

Specifically Estia Health has valuation appeal and a favourable position relative to listed peers.

The broker tempers occupancy forecasts, reducing FY22 to 92.6% from 93.6%. Outperform maintained. Target is reduced to $3.05 from $3.15.

Target price is $3.05 Current Price is $2.48 Difference: $0.57
If EHE meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.24, suggesting downside of -7.2% (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 FMG as Outperform (1) -

Macquarie anticipates a strong result when the company reports on August 30. A final dividend of $2.20 is expected to be announced, which would be a record and at the top of the pay-out range.

Benefits continue to ensues from strong iron ore price realisation and the stock is trading on a FY22 free cash flow and dividend yield of 10%, which rises to more than 15% at spot prices.

The Outperform rating and target price of $27.00 are retained. 

Target price is $27.00 Current Price is $22.51 Difference: $4.49
If FMG meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $22.14, 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: 0.0

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

Macquarie rates ING as Neutral (3) -

Inghams Group is guiding to underlying operating earnings of $203-213m and net profit of $96-103m when it reports on August 20. Macquarie expects the lower end of these ranges, reflecting the impact of the pandemic in the final few weeks of FY21.

The broker notes a major retail contract is up for renewal in the first half of FY22 which provides uncertainty, with the risk of some volume loss or margin impact. Target is reduced to $3.95 from $4.03. Neutral maintained.

Target price is $3.95 Current Price is $3.95 Difference: $0
If ING meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting upside of 6.4% (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 JHX as Upgrade to Buy from Neutral (1) -

The first quarter result revealed a strong uptake of high-value product amidst volume growth. Citi expects earnings momentum will remain in the company's favour amid a multi-year recovery in US housing.

While expectations are running high the broker still considers the stock attractive on a PE relative basis and upgrades to Buy from Neutral.

The medium-term prospects of Colorplus and textured panels underpin forecasts for ASP growth of 6.8% and 6.3% in FY23 and FY24, respectively. Target is raised to $56.20 from $46.20.

Target price is $56.20 Current Price is $49.32 Difference: $6.88
If JHX meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $55.05, suggesting upside of 9.9% (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: 0.8

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

Credit Suisse rates JHX as Neutral (3) -

First quarter revenue was in line with expectations. Net profit guidance for FY22 is raised to US$550-590m. The broker notes the operating segments withstood cost pressures better than previously expected, yet there are higher costs coming through in corporate which temper earnings forecasts.

The broker expects James Hardie will retain its mix shift and higher margin in FY23, even if the market balance normalises. Neutral maintained. Target is raised to $47.40 from $39.80.

Target price is $47.40 Current Price is $49.32 Difference: minus $1.92 (current price is over target).
If JHX meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $55.05, suggesting upside of 9.9% (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: 0.8

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

Macquarie rates JHX as Outperform (1) -

First quarter results were ahead of Macquarie's expectations. The broker liked just about everything in the quarter as volumes grew faster than expected and price realisation was stronger. Moreover, new products are gaining traction.

The stock continues to trade at a discount to historical PE relative to the ASX200 Industrials and the broker finds this attractive, maintaining an Outperform rating. Target is raised to $59.00 from $49.55.

Target price is $59.00 Current Price is $49.32 Difference: $9.68
If JHX meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $55.05, suggesting upside of 9.9% (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: 0.8

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

Morgan Stanley rates JHX as Overweight (1) -

The first quarter result beat Morgan Stanley's earnings (EBIT) forecast by 10%, with strong volume growth and price/mix gains in all markets. There's considered upside risk to full year guidance and the price target is increased to $59 from $50. Overweight rating. 

The result was driven by stronger revenue growth in the Asia Pacific and EU Building Products, explains the analyst. However, the primary factor was considered Nth America fibre cement (NAFC) earnings (EBIT) margins of 29.3%, up 30bps versus the previous corresponding period.

Industry view is In-Line.

Target price is $59.00 Current Price is $49.32 Difference: $9.68
If JHX meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $55.05, suggesting upside of 9.9% (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: 0.8

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

Ord Minnett rates JHX as Accumulate (2) -

Ord Minnett reports James Hardie Industries delivered a strong first-quarter result, with net profit of US$134.3m a 19% beat on the broker's forecast. Management has raised FY22 guidance to US$550-590 following the result. 

Ord Minnett notes while the company continues to experience cost pressure across the business increases are more than offset by price, mix and savings from the LEAN manufacturing initiative. 

It is Ord Minnett's view that James Hardie Industries remains the best-quality company in its coverage. The Accumulate rating is retained and the target price increases to $54.00 from $50.00.

Target price is $54.00 Current Price is $49.32 Difference: $4.68
If JHX meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $55.05, suggesting upside of 9.9% (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: 0.8

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

UBS rates JHX as Buy (1) -

James Hardie made a strong start to FY22, as UBS suspected. US volume growth was ahead of expectations and EBIT margins were resilient.

The company is making early headway with its strategy and the broker believes the early gains in converting Cemplank to Hardie brand exteriors will continue.

Capital expenditure guidance for the next three years has increased to US$250-300m and the broker lauds the proactive approach to adding capacity. Buy rating maintained. Target rises to $54.70 from $51.20.

Target price is $54.70 Current Price is $49.32 Difference: $5.38
If JHX meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $55.05, suggesting upside of 9.9% (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: 0.8

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

Ord Minnett rates MIN as Buy (1) -

Mineral Resources released its FY21 financials today and Ord Minnet, upon first glance, believes the underlying result has missed expectations by between -7-9%, depending on which metric exactly is chosen.

The broker thinks FY22 guidance is mixed, slightly below on iron ore and lithium, but $650m in capex lower than expected. Ord Minnett had penciled in $824m.

Another negative is that operational costs (opex) are equally above expectation. In addition, the analysts suspects the Ashburton project is delayed and this may see expectations for first production pushed out.

Target price is $59.03 Current Price is $60.30 Difference: minus $1.27 (current price is over target).
If MIN meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $58.65, suggesting downside of -2.8% (ex-dividends)

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

Morgans rates MP1 as Hold (3) -

Morgans assesses a strong FY21 result with an acceleration in sales notable in the fourth quarter. Revenue was up 35% year-on year though growth was dampened by a strong Australian dollar. Gross profit grew 43%. 

The broker highlights the Megaport Virtual Edge (MVE) pipeline is strong and the company will increase its investment spend organically (and via a small acquisition) in FY22. The MVE pipeline underpins the analyst's FY22 sales forecast of 45% year-on-year growth.

Morgans lifts it target price to $17.71 from $16.61 and maintains its Hold rating, preferring to add to share holdings on any price weakness.

Target price is $17.71 Current Price is $17.90 Difference: minus $0.19 (current price is over target).
If MP1 meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.72, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Ord Minnett rates MP1 as Downgrade to Sell from Hold (5) -

FY21 saw some lumpy growth, notes Ord Minnett, as it was affected by currency movements and covid-19, although the company finished on a high note with record fourth-quarter growth.

The broker lowers the rating to Sell from Hold and the target price falls to $15 from $15.50, as growth investment may take time to bear fruit. These investments include in the indirect sales channel and the continued focus on new product developments. 

In a largely pre-released result, the company reported FY21 revenue of $78.3m, up 35% on FY20 and in-line with the broker's forecast. The reported net loss of -$55m widened on a year ago, driven largely by unrealised currency losses, explains the analyst.

Target price is $15.00 Current Price is $17.90 Difference: minus $2.9 (current price is over target).
If MP1 meets the Ord Minnett target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.72, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

UBS rates MP1 as Buy (1) -

Megaport achieved breakeven at the EBITDA line in FY21. The company will increase its reinvestment in costs in FY22 to drive further revenue growth beyond the second half.

UBS highlights several potential drivers of upside including leveraging the PartnerVantage program and monetising the SD-WAN opportunity.

The broker incorporates the large uplift in cost reinvestment in FY22 and a modest incremental revenue benefit in its forecasts. Buy rating maintained. Target is raised to $20.45 from $18.75.

Target price is $20.45 Current Price is $17.90 Difference: $2.55
If MP1 meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $17.72, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

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

Due to recent share price strength the broker lowers its rating to Hold from Add and the $27.50 target price is unchanged.

Morgans sees a marginal benefit in the wider context, of the agreement to purchase Citigroup’s Australian consumer business. Pre-tax cost synergies of circa -$130m pa are expected to be realised over three years, with the majority expected to be achieved in the first two years.

Target price is $27.50 Current Price is $26.97 Difference: $0.53
If NAB meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates NVX as Add (1) -

Phillips 66, the major US refiner, is buying around 78m of new shares in Novonix at circa $2.63 based on current spot exchange rates. The cash will help fund an increase in Novonix Anode Materials' (NAM) production capacity as per the company’s three-step growth plan.

Petroleum coke supplied by oil refineries is one of the key inputs for NAM. Morgans believes a supply agreement is likely which de-risks the company’s growth plans. Morgans lifts its target price to $4.53 from $3.34, while retaining a Speculative Buy.

Novonix is an early stage company set to capture rapidly growing demand for battery materials and technology, according to the analyst. It is considered particularly well positioned in the US market to establish a domestic supply chain.

Target price is $4.53 Current Price is $3.49 Difference: $1.04
If NVX meets the Morgans target it will return approximately 30% (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

UBS rates ORA as Neutral (3) -

Orora will report FY21 results on August 19 and UBS expects EBIT growth of 6%. Forecasts are largely backed by the performance improvement program for US distribution and strength in Australian beverage can volumes.

The balance sheet remains strong with leverage at 1.2x that is well below target yet M&A in North America is likely to be off the cards, UBS suggests, until the business can demonstrate a sustained improvement in organic growth.

A turnaround in North America is considered key to any re-rating. Neutral maintained. Target rises to $3.65 from $2.90.

Target price is $3.65 Current Price is $3.58 Difference: $0.07
If ORA meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.30, suggesting downside of -8.2% (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

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

Reckon's first half revenue of $37.5m was a 25% year-on-year increase but a -5% miss on Morgan Stanley's expectation. The broker notes this is due to divestment and acquisition timing.

With free cash flow for the first half exceeding reported net profit, debt reduction is around $4m ahead of expectations. Morgan Stanley notes there was a lack of discussion of Novatti's stake. 

Morgan Stanley is Equal-Weight rated with a target price of $0.96. Industry view: In-Line.

Target price is $0.96 Current Price is $1.08 Difference: minus $0.12 (current price is over target).
If RKN meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in December.

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 SCG as Equal-weight (3) -

Scentre Group has confirmed half-year distribution of 7 cents per share, causing debate in the market as to whether the company will be able to retain the 14 cents per share full year dividend previously guided to. 

Morgan Stanley notes that while Sydney lockdowns persist, and Melbourne and Brisbane remain volatile to their own lockdowns, these largely didn't impact first half results.

Further, the dividend per share guidance translates to around 70% of funds from operations, compared to the historical 90%, and so the company has room to absorb lockdown impact. 

The Equal-Weight rating and $2.98 target are retained. Industry view: In-line.

Target price is $2.98 Current Price is $2.59 Difference: $0.39
If SCG meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.84, suggesting upside of 9.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.2

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

Morgan Stanley rates SHL as Overweight (1) -

While Sonic Healthcare's FY21 earnings are expected to be released later in August, Morgan Stanley is forecasting 29% revenue growth to $8821m. Further the broker expects pre-tax earnings of $2018m and earnings per share of $2.89. 

The broker expects Sonic Healthcare to continue to benefit from covid testing, and is forecasting testing to contribute around $2.1bn in revenue in FY21, and continue to account for around $0.8bn in FY22. Further, the company has expressed intent to grow through acquisition. 

Morgan Stanley prefers Sonic Healthcare to other Australian Health Service names. The Overweight rating and target price of $39.50 are retained. Industry view: In-line.

Target price is $39.50 Current Price is $41.06 Difference: minus $1.56 (current price is over target).
If SHL meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $38.67, suggesting downside of -6.0% (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 SPK as Downgrade to Neutral from Outperform (3) -

Credit Suisse expects Spark New Zealand will deliver operating earnings at the top end of guidance when it reports on August 18. As part of the results, management is also due to update the market on a review of the infrastructure assets.

Other areas the broker will be scrutinising include commentary on the shift from pre-paid to monthly payment subscribers and the resulting revenue benefit, as well as the take-up of fixed wireless plans.

With the stock now trading through valuation the broker lowers the rating to Neutral from Outperform. While the upcoming infrastructure review has potential to be a positive catalyst Credit Suisse does not expect immediate monetisation. Target is steady at $4.50.

Target price is $4.50 Current Price is $4.54 Difference: minus $0.04 (current price is over target).
If SPK meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.50, suggesting downside of -0.7% (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: 0.3

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

Morgans rates UNI as Add (1) -

With Sydney now in its seventh week of lockdown and rolling lockdowns across other states, Morgans lowers FY22 forecasts by factoring-in a -$11.6m/-$6.7m sales/earnings (EBITDA) impact.

Looking beyond this, the broker sees meaningful store rollout upside, attractive store payback economics and gross margin upside from private label/direct sourcing penetration. Morgans retains its Add rating and $8.37 target price.

Target price is $8.37 Current Price is $6.93 Difference: $1.44
If UNI meets the Morgans target it will return approximately 21% (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