Australian Broker Call

UBS rates BDR as Upgrade to Neutral from Sell (3) -

UBS upgrades to Neutral from Sell, suspecting the de-rating in the share price is complete. As the stock now factors in a stronger Brazilian real the risks appear balanced to the broker.

Nevertheless, as Australian investors have considerable choice locally, the broker believes the company's single asset exposure and currency risks are likely to keep some on the sidelines until the exposure to the real is reduced. Target is reduced to $0.23 from $0.24.

Target price is $0.23 Current Price is $0.21 Difference: $0.02
If BDR meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $0.30, suggesting upside of 43.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Macquarie rates CCL as Neutral (3) -

Macquarie observes the headwinds in the first half appear to be continuing, given ongoing competition across various channels. The broker suspects the decision to introduce a third "no sugar" cola into the Australian market is overly ambitious.

The company has also lost the Domino's ((DMP)) Australian contract from September. The broker notes the medium term outlook is complicated by potential adverse impacts from a container deposit scheme to be introduced in NSW this year and in Queensland and Western Australia next year.

Neutral retained. Price target is reduced to $9.29 from $9.79.

Target price is $9.29 Current Price is $8.91 Difference: $0.38
If CCL meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $9.31, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

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

The company has confirmed it has lost the Domino's Pizza ((DMP)) supply contract. Morgan Stanley estimates that drinks represent around 10% of Domino's Pizza Australian sales, or 0.9% of Coca-Cola Amatil's Australian revenue.

The broker does not believe the loss of the contract by itself is unmanageable but fears that it may provide a validation for smaller pizza operators to make the switch to Pepsi-Schweppes.

Woolworths ((WOW)) has also indicated it will not stock the company's "no sugar" brand. Morgan Stanley considers this to be supermarket rationalisation aimed at reducing complexity and cost as Aldi grows share.

Rating is downgraded to Underweight from Equal-weight. Target is reduced to $8.00 from $10.00. Cautious sector view.

Target price is $8.00 Current Price is $8.91 Difference: minus $0.91 (current price is over target).
If CCL 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 $9.31, suggesting upside of 10.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Citi rates CGF as Neutral (3) -

Looking forward towards the FY17 report, Citi analysts have added 3% to their EPS estimate, mainly reflecting expected gains on both equities and direct property, explain the analysts.

In a broader sense, Citi analysts remain positive about Challenger’s sales growth outlook, as well as earnings growth potential, but they also believe the shares are "fully valued". Neutral rating retained. Target price $12.35.

Target price is $12.35 Current Price is $13.08 Difference: minus $0.73 (current price is over target).
If CGF meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.03, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

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

Morgan Stanley calculates around 11% growth in earnings per share in FY18. This may be robust, but the broker acknowledges it is around -10% below other analyst expectations.

The broker considers the stock is fully valued and an Equal-weight rating and In-Line industry view are retained. Target is raised to $122 from $120.

Target price is $122.00 Current Price is $137.00 Difference: minus $15 (current price is over target).
If CSL meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $139.03, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.6

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

Macquarie rates DRM as Downgrade to Underperform from Neutral (5) -

Mining is to be suspended at Andy Well as mining of the Wilbur and Judy lodes have demonstrated less extensive gold mineralisation than previously expected.

The company has been considering supplementing underground ore from Andy Well with open pit ore from the nearby Gnaweeda project but this is not a possibility until late FY18. The Deflector mine will now become the company's sole operation.

The suspension of operations at Andy Well comes as a surprise to Macquarie. Rating is downgraded to Underperform from Neutral. Target is reduced to $0.19 from $0.28.

Target price is $0.19 Current Price is $0.23 Difference: minus $0.035 (current price is over target).
If DRM meets the Macquarie 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 FY17:

Forecast for FY18:

Market Sentiment: -1.0

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

Citi rates EVT as Sell (5) -

Box office numbers are weak, according to the latest industry data. Not just in Australia, but also in New Zealand and in Germany. In addition, price discounting seems to be forcing the whole industry into lower priced tickets in Australia.

Citi analysts are clearly worried, also because a revamped Hoyts seems to be grabbing more market share. It is Citi's long standing view that Hoyts now can offer a superior product at a comparable price to both Village Roadshow and Event Hospitality and Entertainment.

As risks are building for disappointment, Citi analysts have decided to downgrade Village Roadshow to Sell, and retain the Sell rating for Event. Target for Event falls to $10.65. Earnings estimates have  been cut.

Target price is $10.65 Current Price is $13.04 Difference: minus $2.39 (current price is over target).
If EVT meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Citi rates IFL as Neutral (3) -

Citi expects strong flows in the June quarter and that the second half result will be much stronger than the first.

While the immediate news flow appears positive, the stock is trading close to target and the broker retains a Neutral rating and $9.40 target.

Target price is $9.40 Current Price is $9.69 Difference: minus $0.29 (current price is over target).
If IFL meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.95, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Macquarie rates MGX as Outperform (1) -

The company has terminated a second offtake agreement for Iron Hill but still expects to be able to sell into the spot market. The termination is based on a failure to comply with a fundamental part of the agreement on behalf of the purchaser.

Macquarie is disappointed by the loss of the two offtake agreements and suspects that the terms of sale may not have been as favourable as the original agreements.

Nevertheless, the broker values production from Extension Hill/Iron Hill at less than zero and believes Koolan Island is the main catalyst for the company.

Outperform maintained. Target is $0.40.

Target price is $0.40 Current Price is $0.34 Difference: $0.065
If MGX meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $0.39, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Credit Suisse rates NEC as Outperform (1) -

Credit Suisse increases its forecast for Stan following the recent rise in the price of a standard plan. The broker reduces Stan subscriber forecasts, expecting the price increase to result in higher churn.

The FY17 estimates for operating earnings are raised to $208m from $175m previously, to reflect the new $200-210m guidance range following the reduction in TV licence fees. Outperform rating and $1.50 target retained.

Target price is $1.50 Current Price is $1.40 Difference: $0.105
If NEC meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.24, suggesting downside of -9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

UBS rates OZL as Buy (1) -

UBS believes the performance of the share price in the June quarter can only be attributable to weaker copper price expectations rather than a change of view about Carrapateena.

Nevertheless, Carrapateena is key to the longer-term outlook and there are areas of the investment community that are cautious about the asset, the broker notes. UBS retains a Buy rating and reduces the target to $10.00 from $10.40.

Target price is $10.00 Current Price is $7.47 Difference: $2.53
If OZL meets the UBS target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $8.44, suggesting upside of 15.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Citi rates QBE as Neutral (3) -

Citi believes the spike in bond yields towards the end of June should reduce the negative liability adjustment for the business. Reflecting this move in liabilities, the broker lifts FY17 forecasts for earnings per share by 1.3%.

Neutral rating and $12.75 target retained.

Target price is $12.75 Current Price is $12.07 Difference: $0.68
If QBE meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

This company reports in USD. 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

UBS rates SLR as Upgrade to Neutral from Sell (3) -

UBS upgrades to Neutral from Sell, following a sharp pull-back in the share price. The broker suspects, with an increasing gold price outlook, that the stock's leverage may see it outperform peers.

Target is reduced to $0.48 from $0.53.

Target price is $0.48 Current Price is $0.47 Difference: $0.015
If SLR meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Credit Suisse rates TGR as Outperform (1) -

Credit Suisse believes the recent weakness in the share price is based on uncertainty over environmental issues. The broker suspects the market has already factored in the FY18 margin outlook, although consensus estimates appear not to reflect this.

The broker has a cautious view, given an elevated risk profile, while valuation is considered reasonable as opposed to very cheap. Outperform retained. Target is reduced to $4.15 from $4.85.

Target price is $4.15 Current Price is $3.89 Difference: $0.26
If TGR meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.83, suggesting upside of 30.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

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

Box office numbers are weak, according to the latest industry data. Not just in Australia, but also in New Zealand and in Germany. In addition, price discounting seems to be forcing the whole industry into lower priced tickets in Australia.

Citi analysts are clearly worried, also because a revamped Hoyts seems to be grabbing more market share. It is Citi's long standing view that Hoyts now can offer a superior product at a comparable price to both Village Roadshow and Event Hospitality and Entertainment.

As risks are building for disappointment, Citi analysts have decided to downgrade Village Roadshow to Sell, and retain the Sell rating for Event. Target for Village Roadshow falls to $3.85. Earnings estimates have  been cut.

Target price is $3.85 Current Price is $4.00 Difference: minus $0.15 (current price is over target).
If VRL meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.67, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Ord Minnett rates WHC as Accumulate (2) -

The company is scheduled to post June quarter production on July 13 and Ord Minnett expects an achieved metallurgical coal price of US $110/t and a thermal coal price of US$80/t.

Overall, the broker expects the company to come in at the lower end of its FY17 guidance of 21-22mt, with Maules Creek up 23% year-on-year.

Accumulate rating and $3.60 target retained.

Target price is $3.60 Current Price is $2.91 Difference: $0.69
If WHC meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $3.25, suggesting upside of 14.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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