Australian Broker Call

Shaw and Partners rates BML as Buy (1) -

Shaw and Partners observes Boab Metals' off-take agreement with Trafigura for lead-silver concentrate, including a US$30m prepayment as part of financing, which may include debt from the Northern Australia Infrastructure Fund.

The broker is very positively disposed to the announcement and anticipates a final investment decision for the Sorby Hills project in mid-2025. The project has upfront capex of -$264m, and the off-take agreement covers 75% of the lead-silver concentrate.

The Buy, High Risk rating and 40c target are maintained.

Target price is $0.40 Current Price is $0.16 Difference: $0.245
If BML meets the Shaw and Partners target it will return approximately 158% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates DMP as Downgrade to Neutral from Buy (3) -

Citi lowers its target for Domino's Pizza Enterprises by -11% to $33.25 after lifting the valuation discount for the European segment, and downgrades the rating to Neutral from Sell. The analyst's earnings forecasts are unchanged.

The broker expresses increased caution about trading in France, highlighting the need for improved franchise partner engagement and better consumer perception.

Recent initiatives, including new product development, have yet to materially improve sales trends, raising concerns over the planned advertising increase.

In Japan, the broker remains cautious and will assess Christmas trading (which contributes approximately 30% of market profit) before adopting a more positive outlook.

Target price is $33.25 Current Price is $31.25 Difference: $2
If DMP meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $33.58, suggesting upside of 10.1% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Bell Potter rates DVP as Buy (1) -

Develop Global has finalised the terms for a $100m loan facility with Trafigura under a five-year off-take agreement for Woodlawn concentrate production.

Bell Potter highlights the loan terms are attractive and play a critical role in de-risking the restart of Woodlawn. The broker notes  approximately 50% of the plant refurbishment is complete, with production scheduled to commence in the March 2025 quarter.

With production pulled forward by one quarter, Bell Potter now forecasts Develop Global will be EPS positive in FY25, compared to a previously expected EPS loss.

The Buy rating remains unchanged, with the target price maintained at $3.50.

Target price is $3.50 Current Price is $2.46 Difference: $1.04
If DVP meets the Bell Potter target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Ord Minnett rates EDV as Hold (3) -

The recent strike at Woolworths Group's ((WOW)) distribution centres in NSW and Victoria resulted in a -$25m loss for Endeavour Group on the Dan Murphy's and BWS stores, Ord Minnett notes.

Due to time lags in re-stocking liquor stores, disruptions are expected to last until December 22, with an estimated sales loss of -$53m.

Ord Minnett lowers FY25 EPS forecast by -3.2%. Hold rating maintained with an unchanged $4.20 target price.

Target price is $4.20 Current Price is $4.28 Difference: minus $0.08 (current price is over target).
If EDV 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 $4.89, suggesting upside of 14.5% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

UBS rates EDV as Buy (1) -

UBS highlights the sales lost to date for Endeavour Group from the Woolworths Group ((WOW)) industrial action at -$25m, with further impacts expected due to the lags in restocking stores.

The broker assumes lost sales of -$40m and lowers EPS forecasts by -1.9% for FY25 and -0.2% for FY26.

UBS highlights Metcash ((MTS)) and Coles Group ((COL)) are enjoying a tailwind from the industrial problems, but the analyst does not believe there will be a sustained market share loss for Endeavour or Woolworths at this stage.

Buy rated with a $5 target price.

Target price is $5.00 Current Price is $4.28 Difference: $0.72
If EDV meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.89, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Shaw and Partners rates FFM as Buy (1) -

Shaw and Partners maintains a Buy rating with a $1.90 price target for FireFly Metals, noting high-grade and thick intersections from the latest drilling results at Green Bay.

The standout result includes a 86.3m intercept at 3.7% copper equivalent, which the broker describes as the best hole to date. These results are expected to contribute to the resource update anticipated in the June quarter of 2025.

The broker sees these results as reinforcing the quality of the Green Bay project, which is focused on copper equivalent resources.

No changes have been made to the broker’s financial forecasts for FireFly Metals in this report. The risk profile remains high due to the early-stage nature of the project.

Buy, High risk. Target price $1.90, unchanged.

Target price is $1.90 Current Price is $1.15 Difference: $0.755
If FFM meets the Shaw and Partners target it will return approximately 66% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Morgan Stanley rates GDG as Initiation of coverage with Overweight (1) -

Morgan Stanley initiates coverage on Generation Development with an Overweight rating, citing potential to emulate Hub24 ((HUB)) due to an extended growth runway.

The broker forecasts higher EPS growth and share price upside in the medium-term, driven by the company's strong value propositions within structural growth sectors.

Generation Development owns GenLife, covering Investment Bonds and Annuities, and Lonsec, encompassing Managed Accounts and Research.

Morgan Stanley notes Managed Accounts benefit from rising adviser adoption, boosting productivity and efficiency, while Investment Bonds gain from growing demand for tax-efficient growth and alternatives to superannuation.

The broker sets a $4.75 target.

Target price is $4.75 Current Price is $3.80 Difference: $0.95
If GDG meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Ord Minnett rates GMG as Accumulate (2) -

Ord Minnett highlights the change in Goodman Group's strategy to focus on data centres over warehouses/distribution centres, with at least 50% of the group's work-in-progress expected to be data centres in the next year, up from 42% currently.

Management is also shifting to the higher end of the value chain, offering fully fitted facilities where the group not only constructs the centres but also maintains the infrastructure, noted by the broker as power and cooling. Clients then install servers.

The analyst believes the strategy is "sound" and expects data centres to represent around 80% of work-in-progress within five years, with two-thirds being operating assets.

Ord Minnett lifts EPS forecasts by 13% for FY25 and 15% for FY26. Target price rises to $41 from $35.

Target price is $41.00 Current Price is $36.98 Difference: $4.02
If GMG meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $39.14, suggesting upside of 4.4% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

UBS rates GQG as Neutral (3) -

GQG Partners reported better-than-feared net inflows for November, according to UBS, with Adani, a prime focus of the market, highlighted by the analyst as "largely immaterial."

Intra-month net inflows have continued to December 6, though UBS suggests the November slowdown may not have been a one-off due to Adani and indicates a more meaningful slowdown was occurring before the Adani-related slowdown.

The broker suggests funds have been flowing out of international equities and back into US equities, as evidenced by the tracking of GQG's International Opportunities Fund, which showed net outflows in December month-to-date of -US$40m.

The stock is Neutral rated. Target price lifts to $2.32 from $2.30.

Target price is $2.32 Current Price is $2.26 Difference: $0.06
If GQG meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.91, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Citi rates IMD as Sell (5) -

Analysts at Citi haved been sceptical about momentum assumptions for Imdex that have pulled the share price a long way from the trough twelve months ago.

Citi doesn't doubt the bottom is in as far as exploration spending is concerned, but the analysts remain convinced exploration remains "soft" nevertheless, with a recent visit to the Kalgoorlie region confirming just that.

The market is pricing in too much of a good news story, the analysts emphatically repeat. Consequently, Citi reiterates its Sell rating for Imdex.

Target price is $1.95 Current Price is $2.55 Difference: minus $0.6 (current price is over target).
If IMD meets the Citi target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.28, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Macquarie rates IPL as Neutral (3) -

Macquarie lowers its Australian dollar forecasts by -2.0-3.5 cents, averaging US$0.6390, US$0.6450, and US$0.6700 over FY25, FY26, and FY27, respectively.

Incitec Pivot's earnings benefit from these lower currency estimates through earnings translation for Dyno Americas, which contributes 35% of FY24 EBIT, and higher domestic DAP prices.

The broker raises its target price to $3.15 from $3.05. Neutral rating maintained.

Target price is $3.15 Current Price is $3.07 Difference: $0.08
If IPL meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Morgans rates MME as Speculative Buy (1) -

Morgans updates its forecasts for MoneyMe following the recent AGM, noting the larger-than-expected skew toward secured assets has negatively impacted the net interest margin (NIM).

Overall, the business has been performing well in the broker's view, with the loan book exceeding expectations for the first quarter.

Speculative Buy. Target falls to 21c from 22c.

Target price is $0.21 Current Price is $0.17 Difference: $0.04
If MME meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates ORI as Outperform (1) -

Macquarie lowers its Australian dollar forecasts by -2.0-3.5 cents, averaging US$0.6390, US$0.6450, and US$0.6700 over FY25, FY26, and FY27, respectively.

Orica's earnings forecasts benefit from these lower currency estimates, with the broker raising its target price to $20.78 from $20.51.

While the company has currency exposure across 38 countries, the US and Canadian dollars remain its largest exposures, partially diluting the overall impact.

Macquarie retains an Outperform rating.

Target price is $20.78 Current Price is $18.39 Difference: $2.39
If ORI meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $20.80, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Bell Potter rates PLS as Upgrade to Buy from Hold (1) -

Bell Potter upgrades Pilbara Minerals to Buy from Hold, with an unchanged $2.95 target price, citing weakness in the share price.

Notably, the short position in the stock has declined to 12% from around 20% since November 2023, following the stock’s removal from the MSCI Australia Index.

Pilbara maintains a strong balance sheet with $1.4bn in cash. The analyst notes lithium markets have stabilised and commodity prices have improved marginally.

Bell Potter lowers EPS forecasts by -11% in FY25 as lithium prices and forex are marked-to-market. FY26 EPS estimate remain unchanged.

Buy rated. Target remains $2.95.

Target price is $2.95 Current Price is $2.29 Difference: $0.66
If PLS meets the Bell Potter target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $2.90, suggesting upside of 27.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.2

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

Bell Potter rates PPT as Buy (1) -

Bell Potter notes the higher-than-expected ATO tax ruling on the proposed demerger and sale of Perpetual's Corporate Trust and Wealth Management business, at -$488m, compared to management's previous guidance of -$106m–$227m.

The company believes there are strong grounds to dispute the proposed tax liability. The broker describes the ATO ruling as disappointing, stating a better outcome had been anticipated.

Bell Potter considers the possible outcome of the KKR takeover, suggesting a premium would be required to secure control, while risks remain around the asset management business.

The stock remains Buy rated, with an unchanged target price of $24.76.

Target price is $24.76 Current Price is $20.07 Difference: $4.69
If PPT meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $22.70, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

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

Management at Perpetual has updated on the proposed scheme of arrangement with KKR, following Australian Tax Office engagement.

The company is now expected to pay tax of between -$493-529m, up from the broker's prior estimate of between -$106-227m, thereby lowering net cash proceeds from proposed sale of Trust & Wealth to $5.74-6.42 per share.

This increased tax payment lowers the chances of the sale completing, in the broker's view, as it makes the current combined Perpetual
group structure more attractive for shareholders.

Target $22.40. Equal-weight. Industry View: In-Line.

Target price is $22.40 Current Price is $20.07 Difference: $2.33
If PPT meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $22.70, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

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

Macquarie rates PXA as Outperform (1) -

Macquarie has extended its ramp-up timing assumptions for Pexa Group's UK operations to FY35 from the second half of FY26.

The broker applies a -50% discount to the valuation of the PEXA Exchange UK segment to account for "inherent and unavoidable uncertainties" affecting expectations.

Delays in integrating PEXA with the UK's Real-Time Gross Settlement (RTGS) system have impacted the timing of testing slots for potential platform users, explains tne analyst.

Macquarie retains an Outperform rating but lowers the target price to $14.64 from $16.90.

Target price is $14.64 Current Price is $12.72 Difference: $1.92
If PXA meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $15.05, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.7

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

Citi rates RGN as Buy (1) -

Upon revisiting their investment thesis for Region Group, Citi analysts have concluded the shares are presently trading at a -14% discount to Net Tangible Value, and thus they represent "value" for investors.

However, the analysts also suggest investors may need to remain patient until inflation and interest rates start to reduce, creating a better environment for earnings growth for the stock. Citi anticipates this to start sometime throughout 2025.

Buy. Target $2.60.

Target price is $2.60 Current Price is $2.11 Difference: $0.49
If RGN meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.50, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Morgan Stanley rates S32 as Equal-weight (3) -

Morgan Stanley notes rising unrest in Mozambique has caused road blockages, disrupting alumina transport for South32's Mozal Aluminium operations.

While this is a negative development, the broker highlights that a shut-in could allow 50% of alumina sales to be made at spot prices, partially offsetting the impact.

The analysts estimate restart costs will be approximately -US$200m, including working capital, and the smelter is expected to remain offline until a power deal is finalised, anticipated by March 2026.

Mozal contributed 8% of South32's EBITDA in FY25, according to the broker. Morgan Stanley maintains an Equal-weight rating with a $3.30 target and an Attractive industry view.

Target price is $3.30 Current Price is $3.68 Difference: minus $0.38 (current price is over target).
If S32 meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.99, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Shaw and Partners rates SMI as Buy (1) -

Shaw and Partners highlights the resource drilling results at the Come-in-Time prospect within the 100%-owned Bendigo-Ophir Gold Project in New Zealand for Santana Minerals.

The drilling results reveal the emergence of a high-grade core, which the broker views as a significant development for the project's potential.

Shaw and Partners notes the strategic importance of this high-grade core for enhancing resource quality and future production potential. No changes have been made to financial forecasts in this report. 

Shaw and Partners maintains a Buy rating with added High Risk assessment. Target $1.14.

Target price is $1.14 Current Price is $0.47 Difference: $0.67
If SMI meets the Shaw and Partners target it will return approximately 143% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Shaw and Partners rates SPZ as Buy (1) -

The latest UK Government parking data show Smart Parking has increased market share through to the September quarter.

Shaw and Partners notes the company provided a robust trading update at the AGM, with earnings growth of 30% compared to the previous corresponding period.

Management highlighted at the AGM UK sites had increased by around 20% compared to the previous year, and the company's new target is 3,000 global parking sites by the end of FY28, up from 1,529 currently.

The broker continues to rate the stock as Buy, High Risk, with a $1.10 target price. No change to earnings forecasts.

Target price is $1.10 Current Price is $0.93 Difference: $0.17
If SPZ meets the Shaw and Partners target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates TCL as Neutral (3) -

Macquarie raises its target for Transurban Group to $13.00 from $12.67, reflecting better-than-expected traffic data across all markets in October and November.

While the broker has increased earnings forecasts for FY25 and FY26, the positive impact of additional near-term traffic is tempered by lower GDP growth expectations.

Macquarie retains a Neutral rating.

Target price is $13.00 Current Price is $12.98 Difference: $0.02
If TCL meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $13.52, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

UBS rates TCL as Buy (1) -

Transurban Group's out-of-cycle traffic update revealed group traffic rose 3.3% in October-November compared to a year earlier, exceeding UBS' expectations.

North American growth was robust at 6.4%, with Sydney at 4.7%, Brisbane at 3%, and Melbourne at 2%.

The group announced a 32c 1H25 dividend per share and reconfirmed FY25 guidance at 65c per share, consistent with the historical 2H dividend skew, the broker states.

Uncertainty around the NSW government toll reform is underpinning a valuation discount on the stock, with a response from the government expected by the end of 2024.

Target price lifts to $14.75 from $14.55. Buy rating remains.

Target price is $14.75 Current Price is $12.98 Difference: $1.77
If TCL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $13.52, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

Citi rates TWE as Buy (1) -

Citi expresses increased optimism about Treasury Wine Estates following recent store visits in China.

The broker will monitor potential impacts on future customer orders from parallel importing and consumer sentiment, as well as the underperformance of the 19 Crimes brand.

Citi views the -$27.5m acquisition of Ningxia Stone & Moon Winery Ltd in China as a positive step, improving government relations, local industry positioning, and long-term market access.

Additionally, the company's efforts to enhance local sourcing and production capabilities may mitigate risks from potential future Australian tariffs, explains the analyst.

Citi maintains a Buy rating with a $12.97 target.

Target price is $12.97 Current Price is $11.95 Difference: $1.02
If TWE meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.71, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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