Australian Broker Call

UBS rates ALQ as Neutral (3) -

On first inspection UBS assesses the ALS Ltd FY24 results as meeting expectations.

The company reported a 1% increase in net profit, reaching $316.5m, in line with the lower end of its guidance range of $310-325m, notes the broker.

FY24 sales grew by 7% to A$2.6bn, and EBIT remained flat at $492m. A final 19.9c dividend was declared, 20% franked.

Management guided to mid-single-digit organic revenue growth for FY25 and anticipates modest operating margin improvements in life sciences with a mixed performance expected across the divisions.

UBS adjusts FY25 and FY26 EPS forecasts by -3% to account for the change in leverage post the Wessling acquisition.

Neutral rating. Target $13.30.

Target price is $13.30 Current Price is $13.79 Difference: minus $0.49 (current price is over target).
If ALQ meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.78, suggesting downside of -11.8% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates AUB as Outperform (1) -

Macquarie reviews the Australian insurance brokers and concludes they face a challenging M&A environment as market multiples are no longer driving significant accretion. 

The analyst highlights reasons, including the change by Arthur J. Gallagher (AJG) in its tax method in October 2023, gaining $200m in tax credits for future M&A and the US has banned non-compete clauses from September 2024, which could influence Australian regulations. 

Despite high M&A volumes, limited accretion for listed brokers is expected due to the higher valuation multiples.

An Outperform rating and $33.34 target are maintained for AUB Group.

Target price is $33.34 Current Price is $29.63 Difference: $3.71
If AUB meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $34.82, suggesting upside of 18.2% (ex-dividends)

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

Shaw and Partners rates BC8 as Buy (High Risk) (1) -

In a positive development for Black Cat Syndicate, according to Shaw and Partners, management has announced a development package for the Myhree and Boundary open pits, part of the 100% owned Kal East Gold Project.

The company has entered into an Ore Sale Agreement with Paddington Gold Pty Ltd, the owner of the Paddington mill. The broker anticipates this will bring forward cashflow and potentially result in the production of 100koz in 2025.

The terms of the agreements are commercial in confidence.

The Buy, High Risk rating and 74c target are retained.

Target price is $0.74 Current Price is $0.35 Difference: $0.39
If BC8 meets the Shaw and Partners target it will return approximately 111% (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

Shaw and Partners rates BCB as Buy, High Risk (1) -

Shaw and Partners believes we are in a period of elevated coking coal prices, driven by a shortage of material in India, and Bowen Coking Coal is a leveraged way to play this thematic.

Global steel production (which utilises coking coal) is continuing to grow in line with global GDP and is particularly fast growing in the developing world, highlight the analysts.

The Buy, High Risk rating is maintained and the target edges up to 24c from 23c as the broker's coal price forecast upgrades more than offset near-term higher costs.

Target price is $0.24 Current Price is $0.07 Difference: $0.172
If BCB meets the Shaw and Partners target it will return approximately 253% (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

Ord Minnett rates BEN as Hold (3) -

Following the release of better-than anticipated trading data by Bendigo & Adelaide Bank, Ord Minnett has increased its forecasts. Upon that revision, EPS is only forecast to decline -3% in FY24, the broker highlights.

The positive revision does not affect Ord Minnett's fair value assessment, which remains at $10.50. The Net Interest Margin (NIM) is still projected to decline by -4bps to 1.90%.

The cost/income ratio over the medium term is estimated at 56%, alongside a projected return on equity of 8%. DPS forecasts have been lifted. Hold.

Target price is $10.50 Current Price is $10.92 Difference: minus $0.42 (current price is over target).
If BEN meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.82, suggesting downside of -11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.4

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

Morgan Stanley rates CSL as Overweight (1) -

Morgan Stanley's proprietary Plasma Collection Centre Data for May show plasma volumes for the industry continued to grow.

Only April industry centre rollout data are available, showing an increase of 3.8% year-on-year, with US and EU centres for CSL increasing by 3% year-on-year.

For CSL, the Overweight rating and $310 target are unchanged. Industry view: In-Line.

Target price is $310.00 Current Price is $277.90 Difference: $32.1
If CSL meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $316.73, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates DDR as Neutral (3) -

UBS lowers its target for Dicker Data by -18% to $9.65 after lowering its FY24 earnings forecast by -6% following a further review of last week's 1Q market update. Larger forecast earnings downgrades by consensus are expected.

The broker suggests investors will need to see a rebound in sales before becoming more interested in the stock given the size of the 1Q sales decline. Also, sentiment was negatively impacted in March when the founder sold down stock to settle a divorce.

A summary of the initial assessment of 1Q results by UBS follows.

Dicker Data reported a surprise -10% miss on 1Q24 sales year-on-year according to UBS, well below the analyst and consensus estimates.

On a positive note, costs remain well controlled, with a 1Q24 profit down -5% year-on-year.

Gross margins were slightly higher year-on-year, though further details are needed, notes the broker.

The broker attributes the decline to a strong prior year comparison and subdued market conditions, particularly in the physical security business impacted by the building and construction sector slowdown.

Target price is $9.65 Current Price is $9.11 Difference: $0.54
If DDR meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $11.08, suggesting upside of 22.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Bell Potter rates ELD as Buy (1) -

First half underlying profit for Elders of $14.4m fell short of the $19.8m forecast by Bell Potter. Earnings (EBIT) also missed as a better-than-expected contribution from retail was offset mainly by a weaker Wholesale result.

Management retained FY24 EBIT guidance and expects the rural products margin to benefit from continued progress in
backward integration. Livestock volumes are also expected to remain high, while the pricing outlook is positive.

The Buy rating is retained and the target price rises to $9.30 from to $9.10 on the broker's higher baseline earnings forecast.

Target price is $9.30 Current Price is $8.30 Difference: $1
If ELD meets the Bell Potter target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.88, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates ELD as Buy (1) -

Elders reported a 1H24 EBIT miss compared to the Citi analyst's forecast, with the softer results primarily due to higher costs.

Revenue came in at $1,342m, slightly ahead of the Citi forecast but -3% below consensus and gross profit, excluding equity accounted profits was 20% above expectations.

Of note, according to the broker, was the 18c dividend per share, well above Citi's expectation at 8c and consensus at 11c.

Management retained full-year EBIT guidance of $120-140m, supported by an improved outlook for 2H24 driven by favourable conditions in winter crop regions and livestock price recovery.

Slight adjustments are made to the broker's earnings forecasts. Buy rating and $8.50 target retained.

Target price is $8.50 Current Price is $8.30 Difference: $0.2
If ELD meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $8.88, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates ELD as Downgrade to Neutral from Outperform (3) -

Macquarie highlights Elders underlying interim NPAT of $14m is below the forecast $22m, impacted by higher depreciation and amortisation costs.

Management expects a stronger 2H24, driven by improved seasonal conditions, stabilising gross margins, and a recovery in livestock prices, noting a rebound from pricing lows.

The broker highlights weather remains a critical factor, with favourable conditions in NSW/QLD but less favourable in VIC/SA/WA, which require follow-up rain.

The broker adjusts FY24 EPS by -3% and -1% for FY25. Downgrade to Neutral from Outperform and target raised to $8.35 from $8.25.

Target price is $8.35 Current Price is $8.30 Difference: $0.05
If ELD meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.88, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Shaw and Partners rates ELD as Buy (1) -

Elders' 1H sales beat the Shaw and Partners forecast by 12.4%, while underlying earnings (EBIT) and underlying profit were misses of -6.6% and -23.3%, respectively. A 50% franked interim dividend of 18cps was declared compared to the broker's 6cps estimate.

Management expects better trading conditions during the 2H, as client sentiment continues to improve following a return to average seasonal conditions.

The Buy rating is retained and the broker's target price increases to $9.10 from $9.00 after increasing FY24-26 EPS forecasts by 2.6%, 5% and 5.2%, respectively.

Target price is $9.10 Current Price is $8.30 Difference: $0.8
If ELD meets the Shaw and Partners target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $8.88, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates FBU as Downgrade to Hold from Buy (3) -

As Fletcher Building continues to release disappointing market updates, Ord Minnett has now acknowledged the company is more troubled than the broker had appreciated.

The broker's fair value calculation has been slashed to $2.70 (NZ$2.90), from $5.70 previously. The expectation is that FY25 will yet again prove a difficult and challenging year.

Dividends are not expected to return until FY26. Rating has shifted to Hold from Buy.

Target price is $2.70 Current Price is $2.73 Difference: minus $0.03 (current price is over target).
If FBU meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.77, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: -0.5

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

Macquarie rates GLN as Neutral (3) -

Galan Lithium announced a $14m equity raising following a $2.25m raise through an At-the-Market Subscription Deed.

Macquarie expects another $50m will need to raised in the next 6-months for the Hombre Muerto West (HMW) project and points to the fiscal constraints as al risk of delays for HMW.

The company also signed an agreement with the Catamarca government to pay 7% royalties on LiCl sales for permitting HMW1.

Macquarie adjusts earnings forecasts for the equity raising. FY24 EPS declines -17% and -66% through to FY27.

Neutral rating unchanged. Target price cut to 25c from 35c.

Target price is $0.25 Current Price is $0.24 Difference: $0.015
If GLN meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Shaw and Partners rates GTK as Buy (1) -

Gentrack Group's 1H results revealed revenue and earnings (EBITDA) beats of 23% and 20%, respectively, against Shaw and Partners forecasts.

Management upgraded FY24 guidance for revenue and earnings (EBITDA) by 17% and 9%, respectively, and now expects the working capital outflow to narrow materially in the 2H.

The broker notes growth in all regions and highlights underlying utilities revenue grew by 60% year-on-year. The target is increased to $9.10 from $6.90 due to higher forecast cashflows.

Target price is $9.10 Current Price is $8.60 Difference: $0.5
If GTK meets the Shaw and Partners target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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 HVN as Upgrade to Outperform from Neutral (1) -

The Macquarie analyst forecasts a positive outlook for Australian discretionary retailers due to an anticipated upgrade cycle in AI-ready PCs and an echo boom from COVID-era purchases. 

The expected 34% uplift in the PC market by FY25 is driven by a shorter replacement cycle and higher prices for AI-capable devices, notes the broker.

JB Hi-Fi,  Harvey Norman, and Wesfarmers are expected to benefit significantly. FY25 earnings forecasts for Harvey Norman have been upgraded by 3.7%.

Outperform rating upgraded from Neutral and the target raised to $5.30 from $5.10.

Target price is $5.30 Current Price is $4.29 Difference: $1.01
If HVN meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $4.76, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates JBH as Upgrade to Outperform from Neutral (1) -

The Macquarie analyst forecasts a positive outlook for Australian discretionary retailers due to an anticipated upgrade cycle in AI-ready PCs and an echo boom from COVID-era purchases.

The expected 34% uplift in the PC market by FY25 is driven by a shorter replacement cycle and higher prices for AI-capable devices, notes the broker.

JB Hi-Fi,  Harvey Norman, and Wesfarmers are expected to benefit significantly. FY25 earnings for JB Hi-Fi have been raised by 4.5%.

Upgrade to Outperform from Neutral and the target lifted to $63 from $61.

Target price is $63.00 Current Price is $56.55 Difference: $6.45
If JBH meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $56.55, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates JHX as Buy (1) -

In a first look at today's 4Q results for James Hardie Industries, Citi points out not only did adjusted net income fall short of the consensus forecast by -3%, but also FY25 guidance was a -13% miss.

Both theses misses were driven by a rising advertising spend with the North American gross margin increasing by around 600bps, but the EBIT margin rose by only 440bps, observes the broker.

The SG&A expense for the 4Q increased to US$164m, or US$124m after corporate costs, which the analyst explains is nearly a 40% increase year-on-year.

During the 4Q, R&D appeared to step up, and tax was higher, explains the broker, but these were largely offset by better net interest.

Overall, Citi is concerned by the lack of flexibilty around the SG&A spend which is negatively impacting near-term profitability, even though it may be the right long-term strategy to develop a brand/moat.

Buy. Target $63.

Target price is $63.00 Current Price is $54.77 Difference: $8.23
If JHX meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $61.58, suggesting upside of 31.9% (ex-dividends)

The company's fiscal year ends in March.

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: 0.6

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

UBS rates JHX as Buy (1) -

In a first take on James Hardie Industries 4Q24 results, UBS analysts note the company reported a -3% quarter earnings miss compared to UBS forecasts and management flagged FY25 net profit guidance of US$665m, some -13% below consensus.

The broker points to the group's FY24 net profit at US$708m,  in line with consensus, but North American volumes and EBIT margins were slightly below expectations.

Management flagged long-term incentive targets for the North American EBIT margin have been increased to circa 30%, in line with UBS forecasts.

Buy. Target $66.50.

Target price is $66.50 Current Price is $54.77 Difference: $11.73
If JHX meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $61.58, suggesting upside of 31.9% (ex-dividends)

The company's fiscal year ends in March.

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: 0.6

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

Citi rates LLC as Neutral (3) -

Lendlease Group will hold a strategy update on 27 May, which Citi considers will be of significant interest due to ongoing activist shareholder pressure for strategic changes in the company.

The broker anticipates potential positive impact on the share price if announced changes align with activist recommendations, such as reducing exposure to non-core assets, shifting capital back to core markets, and further cost reductions.

The analyst highlights execution speed and capability are critical to gaining investor trust and achieving a sustained re-rating of the company's stock.

Citi retains current financial forecasts, but cautions around a potential further FY24 earnings downgrade resulting from the ATO tax bill.

Neutral rating and $6.90 target unchanged.

Target price is $6.90 Current Price is $6.12 Difference: $0.78
If LLC meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.56, suggesting upside of 39.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

In updating FY25 forecasts for Mirvac Group, Morgan Stanley was faced by competing forces. 

On the one hand, the broker expects less development profits in the period, lower passive earnings and lower-value apartment settlements.

On the other hand, the analyst anticipates downside risks will be largely offset by better residential momentum, lower debt, and joint venturing of assets.

Equal-weight. The target falls to $2.35 from $2.41. Industry view: In-Line.

Target price is $2.35 Current Price is $2.07 Difference: $0.28
If MGR meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.47, suggesting upside of 20.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

Despite a better-than-forecast result from Canada, Citi points to ongoing declining Australian sales with discretionary spending under pressure, as the main culprit for the underwhelming 3Q24 loss for Michael Hill.

The company reported a -$10m EBIT loss against the broker's $6.8m profit estimate for the period.

Group sales growth of 4.7% for the first 45 weeks of FY24 was driven by Canada, but management failed to provide any comments about trading improvements.

The analyst slashes earnings forecasts with a -54.1% decline in FY24 EPS and -22.1% for FY25.

The rating is downgraded to Neutral from Buy and the target is lowered to 66c from 92c, with the analyst expressing concerns around heightened execution risks for the business.

Target price is $0.66 Current Price is $0.48 Difference: $0.18
If MHJ meets the Citi target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates MHJ as Outperform (1) -

The expected improvements in sales momentum in 2H24 for Michael Hill did not materialise, Macquarie observes, with reported 3Q24 sales remaining consistent with 1H24.

Australian sales growth driven by Bevilles and the core Michael Hill brand continued to decline, while higher input costs and aggressive promotions pressured gross margins, leading to a 3Q24 EBIT loss of -$10m, notes the analyst.

Macquarie's FY24 EBIT forecast has been lowered by -53%, with the net result now expected to be a -$1m loss, down from a positive $15m estimate.

Revised target price of $0.85 from $1.05. Overweight rating unchanged with the broker encouraged by market share gains and the potential FY25 earnings recovery.

Target price is $0.85 Current Price is $0.48 Difference: $0.37
If MHJ meets the Macquarie target it will return approximately 77% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Bell Potter rates MMS as Buy (1) -

Bell Potter reviews its investment thesis for McMillan Shakespeare following the Federal Budget which projected moderating growth for NDIS participant support payments over four years.

The broker also reviewed the implications of the 3Q report provided to the Disability Ministers, which was headlined by a 0.5% net increase quarter-on-quarter for participants within the NDIS.

Bell Potter downgrades its NDIS participant forecasts but continues to target more than 25,000 novated lease deals for FY24. Overall, a  positive outlook is maintained for leasing demand.

The target slips to $22.20 from $22.50. Buy.

Target price is $22.20 Current Price is $17.61 Difference: $4.59
If MMS meets the Bell Potter target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $21.99, suggesting upside of 27.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

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

Citi rates NHC as Neutral (3) -

According to the Citi analyst, New Hope reported a strong April quarter with saleable coal production up 21% quarter-on-quarter (QoQ) and 27% year-on-year (YoY).

Coal sales increased by 21% QoQ and 12% YoY, while Bengalla mine’s free on board (FOB) cash costs decreased by -7.8% QoQ to $73.4/t, notes the broker.

Management raised sales guidance for New Acland in FY24 to 0.8mt from 0.66mt due to a short term increase in rail capacity.

The analyst revises EPS forecasts by -6% for FY24 and -7.6% for FY25 on higher unit cost assumptions. Neutral rating and $4.85 target retained.

Target price is $4.85 Current Price is $4.95 Difference: minus $0.1 (current price is over target).
If NHC meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.91, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

Macquarie rates NHC as Underperform (5) -

Macquarie views the ramp up at New Acland as coming in slower than expected as reported in the 3Q24 trading update from New Hope.

The broker points to strong production and sales at Bengalla with its saleable coal production at 2,191kt, up 20% quarter-on-quarter (QOQ)), while New Acland's production and sales missed estimates by -15% and -25%, respectively.

Underlying EBITDA of $219m was -11% below Macquarie's estimate due to lower-than-expected sales.

The broker's estimates were updated post results, including guidance changes (lower Bengalla costs and upgraded New Acland production of 800kt versus 669kt) leading to a 3% increase in FY24 EPS forecasts, 

The target lifts 3% to $4.10 and the Underperform rating is retained.

Target price is $4.10 Current Price is $4.95 Difference: minus $0.85 (current price is over target).
If NHC 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 $4.91, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

Morgan Stanley rates NXL as Overweight (1) -

Morgan Stanley believes its Overweight thesis for shares of Nuix has been validated now that management has upgraded FY24 guidance, even though the broker described the update as an "incremental positive".

The company stated "Based on general positive trading into 2H, including a significant multi-year deal win, Nuix is likely to exceed its strategic target of growing statutory revenue by 10%".

This positive news matches the broker's industry feedback about client interest in Nuix's new products (e.g. Neo platform and new modules) and other product enhancements.

Target $2.50. Industry view is Attractive.

Target price is $2.50 Current Price is $2.98 Difference: minus $0.48 (current price is over target).
If NXL meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Shaw and Partners rates NXL as Buy (1) -

Shaw and Partners raises its target to $3.00 from $2.40 for Buy-rated Nuix following a "strong" FY24 earnings update.

Management now expects underlying EBITDA, which excludes non-operational legal costs, to be in the range of $63-68m, (8% ahead of the broker's forecast) due to general positive trading and a significant multi-year deal win. 

This outcome would be a 36% increase on FY23, notes the analysts.

FY24 guidance for statutory EBITDA is expected to be between $47-52m, implying a view on non-operating legal costs of -$16m, in line with Shaw's forecast.

Target price is $3.00 Current Price is $2.98 Difference: $0.02
If NXL meets the Shaw and Partners target it will return approximately 1% (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

Bell Potter rates PBH as Buy (1) -

Due to “continued strong year-to-date trading in H2 FY24 and increased operational efficiency and productivity”, management at PointsBet Holdings upgraded FY24 normalised EBITDA guidance to a loss of between -$4-6m from the former range of -$9-14m.

The broker's Buy rating and 63c target are maintained.

Bell Potter believes PointsBet is a potential takeover target given its market position (fifth largest in Australia), simplified structure (Australia and Canada) and proprietary technology, along with a healthy balance sheet.

Target price is $0.63 Current Price is $0.50 Difference: $0.13
If PBH meets the Bell Potter target it will return approximately 26% (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

Ord Minnett rates PBH as Buy (1) -

PointsBet Holdings' upgrade to FY24 guidance bodes well for FY25, predicts Ord Minnett. The analyst has increased forecasts in response.

It appears the business is reaping the rewards of a focus on profitable customers and operational efficiency, the broker highlights.

Revised forecasts still leave the company with projected losses this year and next, but reduced losses. Target lifted to 80c from 70c. Buy.

Target price is $0.80 Current Price is $0.50 Difference: $0.3
If PBH meets the Ord Minnett target it will return approximately 60% (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

Bell Potter rates PYC as Initiation of coverage with Speculative Buy (1) -

Bell Potter initiates coverage on clinical-stage biotech company PYC Therapeutics with a Speculative Buy rating.

The company is harnessing its differentiated RNA drug development platform to treat rare inherited diseases, and is currently progressing three drug candidates through clinical development.

The broker strongly believes PYC will succeed withe these drug candidates and expects multiple early and mid-stage clinical readouts will come to fruition over the next 18 months. 

A 10c target price is set.

Target price is $0.10 Current Price is $0.10 Difference: $0
If PYC meets the Bell Potter target it will return approximately 0% (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

Macquarie rates SCG as Upgrade to Outperform from Neutral (1) -

The conversion of subordinated notes to vanilla debt for Scentre Group is calculated to add circa 10% upside to funds from operations (FFO) report the analyst at Macquarie.

The broker envisages management can fully redeem the outstanding notes that were issued during covid in September 2020 without impacting on credit ratings.

Earnings forecasts by the broker are lifted for the better FFO between 1% and 2% for FY24 to FY26, and as much as 7% for FY27.

The stock is upgraded to Outperform from Neutral and the target revised up 11% to $3.37.

Target price is $3.37 Current Price is $3.21 Difference: $0.16
If SCG meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.35, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates SDF as Outperform (1) -

Macquarie reviews the Australian insurance brokers and concludes they face a challenging M&A environment as market multiples are no longer driving significant accretion.

The analyst highlights reasons including the change by Arthur J. Gallagher (AJG) in its tax method in October 2023, gaining $200m in tax credits for future M&A and the US has banned non-compete clauses from September 2024, which could influence Australian regulations.

Despite high M&A volumes, limited accretion for listed brokers is expected due to the higher valuation multiples.

An Outperform rating and $6.40 target unchanged for Steadfast Group.

Target price is $6.40 Current Price is $5.68 Difference: $0.72
If SDF meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $6.38, suggesting upside of 13.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates SGR as Neutral (3) -

Reports of potential M&A for Star Entertainment are viewed as likely to be "highly complex and conditional" highlights the analyst at Macquarie which may involve a consortium including Hard Rock Hotel & Resorts.

The broker points to key issues to resolve, including probity approvals, an AUSTRAC monetary penalty, the NSW casino inquiry outcome, and refinancing of Queen’s Wharf Brisbane debt, as well as approval from Bruce Mathieson and joint venture partners, who own 16% of the group.

Earnings forecasts unchanged. Neutral rating and 50c target are maintained.

Target price is $0.50 Current Price is $0.54 Difference: minus $0.04 (current price is over target).
If SGR 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 $0.64, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates SGR as Hold (3) -

Star Entertainment has communicated various non-binding approaches from potential suitors, but Ord Minnett/Morningstar don't seem impressed.

The broker continues to value the company as a stand-alone entity, at 90c. While the shares seem materially undervalued, there remains significant uncertainty also, posits the broker. Hold.

Target price is $0.90 Current Price is $0.54 Difference: $0.36
If SGR meets the Ord Minnett target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $0.64, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates TLS as Buy (1) -

UBS is upbeat on Telstra Group management's reconfirming FY24 guidance with the introduction of FY25 guidance, projecting underlying EBITDA of $8.4-8.7bn.

Surprisingly to the analyst, the company announced the removal of the annual CPI-linked price review clause from its mobile postpaid plans, providing more pricing flexibility.

As expected on the cost out plans, UBS notes a -2,800 workforce reduction in the Enterprise segment by the end of 2024, aiming for -$350m in cost savings by FY25 and -$500m in the medium term.

The trading update confirmed the mobile business continues to perform strongly, contributing positively to the outlook, comments the broker. Buy rating and $4.40 target unchanged.

Target price is $4.40 Current Price is $3.67 Difference: $0.73
If TLS meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $4.38, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

UBS rates TLX as Buy (1) -

UBS assesses the latest announcement from Telix Pharmaceuticals, which showed encouraging early data for TLX592, a PSA-targeting actinium-loaded alpha emitter for prostate cancer.

The analyst notes the proof-of-concept data include a dosing schedule for later-stage trials, with no serious adverse events reported.

UBS is upbeat on the company's plans for TLX592  phase I/II study this year. TLX592 is currently not in the broker's earnings forecasts.

Buy rating and $19.30 target retained.

Target price is $19.30 Current Price is $15.37 Difference: $3.93
If TLX meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

UBS rates TNE as Neutral (3) -

TechnologyOne reported 1H24 results, with revenue of $241m and annual recurring revenue (ARR) at $424m, a 21% year-on-year increase, benefiting from the SaaS transition, comments UBS.

At first glance the broker considers it is a strong result, although EBIT of $58.7m is -7% below the broker's estimate due to higher operational expenses.

Profit before tax grew by 17% year-on-year to $61.5m. The company’s customer churn rate increased slightly to 1.8%, while ARR in the UK grew by 36% year-on-year.

No changes to the analyst's earnings forecasts are made with management retaining FY24 profit before tax growth guidance between 12% to 16%, which is viewed as conservative by UBS.

Neutral rating and $16.40 target.

Target price is $16.40 Current Price is $16.02 Difference: $0.38
If TNE meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $16.07, suggesting downside of -4.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates WES as Neutral (3) -

The Macquarie analyst forecasts a positive outlook for Australian discretionary retailers due to an anticipated upgrade cycle in AI-ready PCs and an echo boom from COVID-era purchases. 

The expected 34% uplift in the PC market by FY25 is driven by a shorter replacement cycle and higher prices for AI-capable devices, notes the broker.

JB Hi-Fi,  Harvey Norman, and Wesfarmers are expected to benefit significantly.

Macquarie lifts FY25 forecast EPS for Wesfarmers by 0.5%. The target is raised to $65.60 and the rating retained at Neutral due valuation.

Target price is $65.60 Current Price is $68.10 Difference: minus $2.5 (current price is over target).
If WES meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $58.87, suggesting downside of -13.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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