Australian Broker Call

Morgan Stanley rates ALD as Overweight (1) -

Regional crack spreads have rebounded from April lows, while fuel margins are tracking higher year-on-year, observes Morgan Stanley.

Lower bowser prices are also contributing to stronger shop sales, note the analysts, providing a tailwind to non-fuel retail performance.

The broker prefers Ampol over Viva Energy on relative balance sheet metrics and shop execution risk.

For Ampol, the Overweight rating and $30 target are maintained. Industry view: In-Line.

Target price is $30.00 Current Price is $25.34 Difference: $4.66
If ALD meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $29.90, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in December.

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

Morgans rates APA as Downgrade to Trim from Hold (5) -

The analyst at Morgans met with management of APA Group and remains cautious due to a significant earnings cliff looming in under ten years, as the initial term of the Wallumbilla Gladstone Pipeline (WGP) contract expires.

For shareholders, the broker enacts a 'TRIM' into current share price strength designation. FNArena assumes a Reduce rating now applies, down from Hold.

Management described current conditions as stable and noted increasing government support for gas infrastructure, particularly in Queensland and the Northern Territory. 

The broker observes slow progress on the Pilbara build-out but pointed to rising opportunities in gas-fired power projects. Basslink, acquired for -$758m, is expected to remain unregulated, adding earnings volatility.

Morgans raises the target price to $7.36 from $7.21.

Target price is $7.36 Current Price is $8.30 Difference: minus $0.94 (current price is over target).
If APA meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.84, suggesting downside of -5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

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

Bell Potter rates BGA as Buy (1) -

Bega Cheese announced the opening FY26 Southern farmgate milk price range of $8.70-9.20/kg milk solids (MS) with an average of $9.04/kg, and compared with the FY25 close of $8.15-8.45/kg.

Bell Potter expects ingredient returns to grow 5% y/y in FY26, and had assumed FY26 Southern milk price forecast of $9.15/kg MS. The broker believes the price is within the range for expected channel returns. 

No change to forecasts. Target unchanged at $7. Buy.

Target price is $7.00 Current Price is $5.55 Difference: $1.45
If BGA meets the Bell Potter target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $6.06, suggesting upside of 7.7% (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

UBS rates BGA as Neutral (3) -

UBS notes Bega Cheese's opening FY26 farmgate milk price of $8.95/kg is a 7% increase vs FY25's $8.40/kg. The broker suggests it was also better than market expectations.

The broker estimates this will increase FY26 costs by $60m, assuming milk intake is maintained at 1.4bn litres. But this is still a positive outcome because a 30% y/y lift in export prices will more than offset the higher cost.

The broker's current forecast for FY25 EBITDA is at the upper end of the company's $190-200m guidance. Neutral. Target unchanged at $6.15.

Target price is $6.15 Current Price is $5.55 Difference: $0.6
If BGA meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $6.06, suggesting upside of 7.7% (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

Macquarie rates BKW as Neutral (3) -

Brickworks and WH Soul Pattinson ((SOL)) announced intention to merge, which will unwind longstanding complex cross-holding structures between the two companies.

Macquarie explains a new entity, TopCo, to be renamed Washington H. Soul Pattinson ((SOL)), will issue stock to the respective shareholders, with WH Soul Pattinson, Brickworks and new investors receiving around 72%, 19%, and 9% of the stock, respectively.

Shareholders in Brickworks will receive 0.82 shares in TopCo, implying a value of $30.28 pre-deal (and $35.26 on spot), a premium to the past tax NAV, and is subject to a favourable ATO confirmation, Macquarie highlights.

The merger will create a $14bn group with a more diverse asset base, including WH Soul Pattinson's private and public investments, while Brickworks will increase the property exposure by around $2.2bn to 19% of the combined portfolio.

Neutral rated with target price raised to $32.20 from $26, marking to market WH Soul Pattinson, which will raise $550m initially.

Target price is $32.20 Current Price is $35.10 Difference: minus $2.9 (current price is over target).
If BKW meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.03, suggesting downside of -11.0% (ex-dividends)

The company's fiscal year ends in July.

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

Ord Minnett rates BKW as Downgrade to Hold from Accumulate (3) -

Ord Minnett downgrades Brickworks to Hold from Accumulate following recent share price gains.

The proposed merger with Washington H Soul Pattinson is expected to unlock value by simplifying the capital structure, notes the broker, eliminating cross-holdings, and boosting liquidity and scale.

Brickworks shareholders will receive 0.82 shares in the new ASX-listed entity (“TopCo”) for each Brickworks share held, implying a value of $30.28, or a 10.1% premium to the 30 May closing price, explains Ord Minnett.

Cost synergies are expected to be modest, though the combined group will have a strong net cash position to pursue new investments, suggest the analysts.

No updates have been made to the broker's financial forecasts. 

Target price is $34.90 Current Price is $35.10 Difference: minus $0.2 (current price is over target).
If BKW 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 $31.03, suggesting downside of -11.0% (ex-dividends)

The company's fiscal year ends in July.

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

Morgans rates EPY as No Rating (-1) -

EarlyPay's FY25 trading update highlighted lower client activity in 2H25, mainly in invoice financing, leading the company to downgrade EPS guidance to 1.8c from 2.2c. 

Morgans notes Solvar ((SVR)) recently acquired a 19.9% stake in the company, and there's a possibility of commercial engagement between the two companies. There's also potential for Solvar to take full control in time.

Share buyback is currently suspended until a transaction possibility exists. The broker has no rating or target price on the stock.

Current Price is $0.21. Target price not assessed.

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

Macquarie rates IPH as Outperform (1) -

Macquarie observes IPH Ltd volumes declined by -16.9% in May, with market activity down -4.5% due to a strong previous year. The company's volumes are down -10.2% year-to-date for 2H25 versus the market at -0.2%.

Market share stood at 27.7% in May against the 2H25 year-to-date share of 28.6%, although with around 70% of IPH Ltd's income as recurring, filing records are not deemed as so significant.

Macquarie maintains an Outperform rating and $6.75 target. No change to EPS estimates.

Target price is $6.75 Current Price is $4.87 Difference: $1.88
If IPH meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $6.51, suggesting upside of 35.7% (ex-dividends)

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 IRE as Buy (1) -

Ord Minnett notes Iress has completed the sale of its superannuation business to global financial services provider Apex Group for $40m, with a further $20m possible over 12 months if revenue targets are met.

Encouragingly, suggests the broker, guidance for 2025 operating earnings (EBITDA) of $127-135m has been maintained, implying a modest uplift from the core business.

Ord Minnett had already forecast $132m for 2025, with only limited contribution from the superannuation unit.

No changes have been made to financial forecasts. The broker maintains a Buy rating and a $10.70 target.

Target price is $10.70 Current Price is $8.62 Difference: $2.08
If IRE meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $9.59, suggesting upside of 11.3% (ex-dividends)

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 MPL as Equal-weight (3) -

APRA’s March 2025 health insurance statistics show stable industry profitability and record participation, according to Morgan Stanley, despite ongoing cost-of-living pressures.

The broker notes growth in hospital claims paid per policy is easing, while extras claims remain steady.

As a consequence of the above, the analyst has greater confidence in near-term profitability for Medibank Private.

Target $4.50. Equal-weight. Industry View: In-Line.

Target price is $4.50 Current Price is $4.87 Difference: minus $0.37 (current price is over target).
If MPL meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.67, suggesting downside of -5.7% (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

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

APRA’s March 2025 health insurance statistics show stable industry profitability and record participation, according to Morgan Stanley, despite ongoing cost-of-living pressures.

The broker notes growth in hospital claims paid per policy is easing, while extras claims remain steady.

As a consequence of the above, the analyst has greater confidence in near-term profitability for nib Holdings.

Target $6.85. Equal-weight. Industry View: In-Line.

Target price is $6.85 Current Price is $6.89 Difference: minus $0.04 (current price is over target).
If NHF meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.89, suggesting downside of -0.8% (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

Citi rates PRN as Buy (1) -

Citi notes recent contract renewals are positive for Perenti's outlook, but won't be sufficient to offset the -$240m void left from FY26 onwards from the Zone 5 Botswana contract loss.

The broker forecasts 1.4% y/y revenue growth in FY26, conditional on uplift from four upcoming contract renewals and other greenfield opportunities.

This forecast includes a downgrade to drilling services revenue as uncertainty in the exploration space is expected to continue for a while.

The focus is on free cash flow and the broker expects a jump to over $200m in FY26 from Zone 5 equipment sale, offset by redeployment to current and new contracts.

Buy. Target rises to $1.90 from $1.60

Target price is $1.90 Current Price is $1.63 Difference: $0.27
If PRN meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.62, suggesting upside of 1.5% (ex-dividends)

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

Citi rates QRI as Buy (1) -

Citi cut dividend forecasts for Qualitas Real Estate Income Fund after factoring in the house forecast for lower Australian interest rates.

FY25-27 dividend forecasts trimmed by -6%.

Buy. Target unchanged at $1.60 on valuation roll-forward.

Target price is $1.60 Current Price is $1.60 Difference: $0
If QRI meets the Citi target it will return approximately 0% (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

Citi rates RMD as Buy (1) -

Citi tweaks EPS estimates post ResMed's 3Q25 results, with a lift in forecasts between 0%-4% for FY25–FY27 and a rise in target price to $45 from $44.

The broker finds the valuation appealing at around 20x FY27 earnings, with robust average compound growth in EPS of 15% from FY24–FY27, alongside strong cash flow generation of over US$1.5bn and a net cash balance sheet.

US tariffs will have no impact on sleep apnea products under the Nairobi Protocol, the analyst explains, while management continues to invest for growth, including targeting the top 10% of GLP-1 prescribers to explain the benefits of CPAP therapy.

Buy rating retained.

Target price is $45.00 Current Price is $37.70 Difference: $7.3
If RMD meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $45.89, suggesting upside of 21.1% (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: 1.0

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

Bell Potter rates SRG as Buy (1) -

Bell Potter highlights the outlook for SRG Global's maintenance and industrial services unit is positive, with higher gold prices supporting greenfield and brownfield expansions. Record levels of work in the East Coast water and electrical infrastructure markets are supportive of the company's newly acquired Diona division.

In the engineering and construction space, the broker believes double-digit y/y growth seen so far in 2025 for R3M non-residential construction is encouraging for new contract wins. A medium-term positive is sustaining capex spend across iron ore miners, the broker notes.

The analyst expects an update on FY25 key metrics in July and FY26 EBITDA guidance. The broker is forecasting a 10.3% y/y rise in FY26 EBITDA to $139m.

Buy. Target rises to $1.70 from $1.65 on lower risk-free rate assumption of 4.0% from 4.3%.

Target price is $1.70 Current Price is $1.53 Difference: $0.17
If SRG meets the Bell Potter target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.63, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.9

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

Morgan Stanley rates TAH as Overweight (1) -

Morgan Stanley reiterates an Overweight rating on Tabcorp Holdings with an upgraded target price of 78c from 70c.

The broker details how the company is seeking to realign its business by reducing commissions to pubs and clubs and re-allocating promotional capex and investment spending to retail versus re-investment of savings.

The analyst stresses there are upside risks to FY26 consensus earnings based on the changes.

A change in commission structure is also expected to underwrite improvements in retail margins, with increased possibilities around taking market share via product innovation, such as in-venue in-play betting which would support the group's retail licences, Morgan Stanley states.

The broker lifts EPS estimates by 14.7% for FY25 and 1.6% for FY26. Industry view: In Line.

Target price is $0.78 Current Price is $0.69 Difference: $0.09
If TAH meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $0.73, suggesting downside of -0.3% (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

Citi rates TWE as Neutral (3) -

Following a trip to China and different retailers there, Citi observed offline price trends for wine were similar to the previous February trip.

Commentary suggests the highlight was Treasury Wine Estates retaining prominent shelf space and range for Penfolds, given the challenging macro environment.

In the case of Bin 389, the broker noted one major retailer was out of stock, indicating the trend remains positive.

Neutral. Target unchanged at $10.50.

Target price is $10.50 Current Price is $8.10 Difference: $2.4
If TWE meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $11.54, suggesting upside of 41.9% (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

Macquarie rates TWE as Neutral (3) -

Treasury Wine Estates released a market update this morning and Macquarie, upon initial assessment, comments the current economic environment and softer consumer demand have led to lower Premium portfolio shipments in the US, particularly at price points below US$15.

The broker explains today's update has triggered a -1.3% downgrade to Group EBITS guidance, from "approximately $780m" to $770m.

In addition, Treasury Wine Estates has been advised by its current distributor, RNDC, that it will be ceasing operations in California, the largest wine consumption state in the US, on 2 September 2025.

As per Macquarie's commentary, as at 1H25, RNDC California accounted for circa 25% of Treasury Americas' net sales revenue or circa 10% of Group net sales revenue.

Neutral. Target $8.90.

Target price is $8.90 Current Price is $8.10 Difference: $0.8
If TWE meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $11.54, suggesting upside of 41.9% (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 VEA as Equal-weight (3) -

Regional crack spreads have rebounded from April lows, while fuel margins are tracking higher year-on-year, observes Morgan Stanley.

Lower bowser prices are also contributing to stronger shop sales, note the analysts, providing a tailwind to non-fuel retail performance.

The broker prefers Ampol over Viva Energy on relative balance sheet metrics and shop execution risk.

For Viva Energy, the Equal-weight rating and $1.99 target are maintained. Industry view: In-Line.

Target price is $1.99 Current Price is $1.82 Difference: $0.17
If VEA meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 30.7% (ex-dividends)

The company's fiscal year ends in December.

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 WBC as Underweight (5) -

Australian system mortgage growth picked up to an annualised rate of circa 6% in April, reflecting the initial benefit of RBA rate cuts, suggests Morgan Stanley.

Unfortunately, Westpac continued to track at an annualised rate of around 1.5%, note the analysts. This, along with emerging margin headwinds are expected to weigh on the bank's revenue growth in 2H25.

Target $27.30. Underweight. Industry view remains In-Line.

Target price is $27.30 Current Price is $32.18 Difference: minus $4.88 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.98, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in September.

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