Australian Broker Call

UBS rates AGL as Buy (1) -

The company has increased gas and electricity retail prices for NSW, SA and Queensland  by 5-17%. This signals a faster-than-forecast passing through of higher gas and electricity prices to end customers, UBS observes.

The broker retains a Buy rating, underpinned by the company's ability to benefit from rising electricity prices.

The introduction of more gas generation in Queensland should be a positive in the broker's opinion, as it should reduce the cost of hedging exposure to high electricity prices in that state. Target is $29.50.

Target price is $29.50 Current Price is $26.12 Difference: $3.38
If AGL meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $27.23, suggesting upside of 3.6% (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

Macquarie rates APA as Neutral (3) -

APA will extend the East Goldfields pipeline to support the Gruyere gold project. At the same time, Macquarie notes the government will scrap the limited merits review, which is suspected to be in response to recent losses in the Federal Court regarding NSW regulatory appeals.

Whilst organic growth is attractive, the broker believes the regulatory restrictions continue for the industry and the company faces gas pipeline re-pricing pressure on existing contracts  Neutral rating retained. Target is $9.00.

Target price is $9.00 Current Price is $9.59 Difference: minus $0.59 (current price is over target).
If APA meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.08, suggesting downside of -5.2% (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

Morgans rates APA as Hold (3) -

The company will build a new pipeline that will supply the Gruyere gold project in Western Australia. The project back-fills formerly unidentified growth capital expenditure and related  earnings that Morgans has built into forecasts.

The healthy project return is in the context of a greenfield gold mine development and counter-party risk, the broker notes.

The broker believes the market is not taking into account the potential for the headwinds to ease on contract expiries in coming years, and is incorrectly capitalising into perpetuity earnings from certain limited life assets. A Hold rating is retained. Target is $8.52.

Target price is $8.52 Current Price is $9.59 Difference: minus $1.07 (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 $9.08, suggesting downside of -5.2% (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

Macquarie rates BHP as Outperform (1) -

Macquarie reduces oil price forecasts for 2017, 2018, and 2019 by -8%, -12%, and -13% respectively because of lingering concerns surrounding the oversupply of oil.

The downgrades to the broker's oil price forecasts increase projected accumulated losses for the US shale division and reduce forecast free cash flow by around US$720m over the next five years.

Macquarie notes a potential sale of all, or part, of the US shale acreage in the Fayetteville or Haynesville regions would represent upside to the base case.

Outperform retained.  Target is reduced to $29 from $30.

Target price is $29.00 Current Price is $22.10 Difference: $6.9
If BHP meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $27.40, suggesting upside of 23.1% (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

Credit Suisse rates BRG as Downgrade to Neutral from Outperform (3) -

While the company is well-positioned for the current retail environment and growth opportunities are still viable offshore, Credit Suisse believes recent share price strength leaves the stock with a multiple that provides no margin for slippage.

Rating is downgraded to Neutral from Outperform. The broker has few concerns about the near-term outlook and expects growth into FY18 of around 7%. Target is raised to $10.75 from $9.30.

Target price is $10.75 Current Price is $10.73 Difference: $0.02
If BRG meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $9.76, suggesting downside of -7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

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

The company's N7 speech processor appears to have received US FDA approval although the timing on its availability is unclear. Morgan Stanley already models the launch in the second half of FY18.

While there may be some short-term weakness as potential new N7 candidates await the launch, the broker suspects its current modelling of the uptake is the main reason its FY18 and FY19 forecasts for earnings per share are well ahead of consensus estimates.

Equal-weight rating retained. Target is $138. Industry view: In-Line.

Target price is $138.00 Current Price is $159.44 Difference: minus $21.44 (current price is over target).
If COH meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $128.77, suggesting downside of -18.4% (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

Macquarie rates DCN as Outperform (1) -

Drilling at Cameron Well has identified new bedrock targets with the potential for significant upside, Macquarie observes.

The broker is impressed with the results which indicate there could be more significant gold systems than previously thought, with the potential for more extensive mine development.

Outperform rating and $3.00 target retained.

Target price is $3.00 Current Price is $1.84 Difference: $1.16
If DCN meets the Macquarie target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $3.05, suggesting upside of 61.8% (ex-dividends)

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 DMP as Initiation of coverage with Sell (5) -

Citi analysts are of the view that sales and earnings growth is about to slow down for prior market darling Domino's Pizza with the extra observation that market expectations have yet to adjust for this outlook.

Within this context, Citi has initiated coverage with a Sell rating and $45.50 target price. The analysts expect the PE multiple to de-rate to 23x from 30.1x now (FY18).

Citi doesn't think there is a lot of room left for management to surprise to the upside vis-a-vis consensus expectations while the pressure to support franchisees will constrain margin expansion, suggest the analysts.

Target price is $45.50 Current Price is $54.58 Difference: minus $9.08 (current price is over target).
If DMP meets the Citi target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $64.45, suggesting upside of 22.6% (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

Citi rates DXS as Sell (5) -

Updated FY18 dividend guidance proved a positive surprise to the tune of 2.5%, report Citi analysts, adding strong office markets in Sydney and Melbourne are starting to flow through to DPS growth.

Having updated its modeling, Citi analysts remain of the view there is better value elsewhere. In fact, their view is the better office play on the ASX currently bears the name Charter Hall ((CHC)), with Citi highlighting it carries 37% exposure to the office market.

Price target lifts to $8.73 from $8.57. Sell rating remains untouched.

Target price is $8.73 Current Price is $10.56 Difference: minus $1.83 (current price is over target).
If DXS meets the Citi target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.22, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Credit Suisse rates DXS as Underperform (5) -

The company has announced $739.3m in acquisitions which will be funded by a $550m placement and security purchase plan as well as debt capital.

In addition to incorporating the transactions, Credit Suisse shifts timing for the settlement of Southgate to the end of FY18 and adjusts trading profit forecasts.

Underperform rating maintained. Target is raised to $9.14 from $9.10.

Target price is $9.14 Current Price is $10.56 Difference: minus $1.42 (current price is over target).
If DXS meets the Credit Suisse target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.22, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Macquarie rates DXS as No Rating (-1) -

The company is acquiring a 25% interest in the MLC Centre in Sydney CBD and will also acquire 100% of 100 Harris Street.

The acquisitions will be funded partially by a $550m equity raising. Macquarie is restricted on valuation and rating at present.

Current Price is $10.56. Target price not assessed.

Current consensus price target is $9.22, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Morgan Stanley rates DXS as Overweight (1) -

The company will undertake an equity raising and security purchase plan to partially fund $739.3m in office and industrial acquisitions.

Solid Sydney fundamentals in office and improving conditions in Brisbane, as well as a stabilising of Perth, suggests to Morgan Stanley that such A-REITs will continue to report accelerated operating income and tangible asset growth, particularly when compared with the retail-exposed part of the sector.

Overweight rating, $9.65 target and Cautious industry view retained.

Target price is $9.65 Current Price is $10.56 Difference: minus $0.91 (current price is over target).
If DXS meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.22, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Ord Minnett rates DXS as Lighten (4) -

The company will raise $500m in equity at $10.20 per security to partly fund the acquisition of two office buildings in Sydney. On Ord Minnett's numbers the transactions reflect a 4.4% net yield.

Overall, the broker likes the Pyrmont acquisition, which has a long weighted average lease expiry and good growth prospects, but would have preferred to see the company pass on the 25% stake in MLC Tower. The broker suspects it will be hard to generate an acceptable return for the latter.

Lighten retained. Target is $9.00.

Target price is $9.00 Current Price is $10.56 Difference: minus $1.56 (current price is over target).
If DXS meets the Ord Minnett target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.22, suggesting downside of -8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

UBS rates GPT as Neutral (3) -

The Dexus ((DXS)) acquisition of a stake in MLC Tower and its wholesale fund, combined with GPT's other transactions in Melbourne and Sydney, mean UBS increases the target to $5.30 from $5.04.

Neutral retained. In the context of the  A-REIT sector the broker moves to be overweight the stock.

Target price is $5.30 Current Price is $5.15 Difference: $0.15
If GPT meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $5.16, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates HSO as Downgrade to Underweight from Equal-weight (5) -

Morgan Stanley analysts are weighing up the perceived defensive characteristics of the health insurance industry, with obvious implications for hospital operators such as Healthscope.

In a nutshell: the analysts have come to the conclusion that structural dynamics are shifting on the back of decreasing household budgets and increasing competition.

The end result, argue the analysts, is profit growth for private health insurers and for private hospital operators will prove more cyclical. The result is a downgrade for Healthscope to Underweight from Equal-Weight as virtually no growth is expected for the near term. Price target falls to $1.90.

Sector view remains In-Line.

Target price is $1.90 Current Price is $2.18 Difference: minus $0.28 (current price is over target).
If HSO meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.49, suggesting upside of 16.4% (ex-dividends)

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

Morgans rates IPD as Add (1) -

The company's fluid measurement device, SOZO, has received CE Market clearance. The platform includes fluid status monitoring for patients living with heart failure, assessment the lymphoedema, hydration monitoring and body composition.

Morgans is sensing a slight change in mood regarding life sciences, although sentiment is still subdued. The broker expects renewed interest after June 30. Add  rating and $1.82 target retained.

Target price is $1.82 Current Price is $0.70 Difference: $1.12
If IPD meets the Morgans target it will return approximately 160% (excluding dividends, fees and charges).

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

Deutsche Bank rates MND as Sell (5) -

Mona has won a $600m contract with Woodside Petroleum ((WPL)) to provide maintenance and offshore services in WA. The contract runs for five years with extension options and expands the scope of service Mona was already providing to Woodside.

This highlights the strong relationship the company has with customers, often winning additional work on top of prior contracts, the broker notes. It also shows Mona's ability to continue to diversify into oil & gas. Target rises to $8.95 from $8.90.

Sell retained on valuation.

Target price is $8.90 Current Price is $13.49 Difference: minus $4.59 (current price is over target).
If MND meets the Deutsche Bank target it will return approximately minus 34% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.77, suggesting downside of -28.9% (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

Morgan Stanley rates MPL as Underweight (5) -

In a 63 page sector update, Morgan Stanley analysts argue the case structural shifts in participation, household budgets and the competitive landscape imply in reality health insurers and private hospitals are more cyclical than investors tend to acknowledge when pricing share prices.

Underweight rating retained, alongside an In-Line sector view. Price target remains unchanged at $2.40.

Target price is $2.40 Current Price is $2.74 Difference: minus $0.34 (current price is over target).
If MPL meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.67, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.6

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

Deutsche Bank rates MTS as Sell (5) -

The broker expects Metcash will report earnings growth for the first time in three years when it releases its FY17 result next week. But this will be largely due to the hardware acquisition and investors will be more focused on grocery, particularly wholesale.

The broker sees a potentially poor result here as Aldi continues its rollout and Woolworths ((WOW)) plays price wars. The broker also fears Bunnings ((WES)) could be taking market share from the hardware business. Sell and $1.60 target retained.

Target price is $1.60 Current Price is $2.08 Difference: minus $0.48 (current price is over target).
If MTS meets the Deutsche Bank target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.26, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in April.

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

Ord Minnett rates MTS as Upgrade to Hold from Lighten (3) -

Ord Minnett observes the food & grocery business is challenged while the home improvement division is strong and has upside to current synergy targets.

The broker believes the share price is now trading closer to its valuation, which assumes that the risk to earnings in food & grocery is supported by cost savings versus structural challenges to market share.

Ord Minnett upgrades to Hold from Lighten on valuation grounds.

Target price is $2.10 Current Price is $2.08 Difference: $0.02
If MTS meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.26, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in April.

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 NHF as Equal-weight (3) -

In a 63 page sector update, Morgan Stanley analysts argue the case structural shifts in participation, household budgets and the competitive landscape imply in reality health insurers and private hospitals are more cyclical than investors tend to acknowledge when pricing share prices.

Equal-weight rating retained, alongside an In-Line sector view. Price target creeps up to $4.85 from $4.70.

Target price is $4.85 Current Price is $5.43 Difference: minus $0.58 (current price is over target).
If NHF 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 $5.37, suggesting downside of -1.8% (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

Macquarie rates NMT as Outperform (1) -

The company has updated on the ramp up of Mt Marion, in which it has a 13.8% interest.

Process improvements are seen driving higher production and, based on recent shipping data, Macquarie notes the mine is already running at an annualised rate of around 360,000 tpa, producing both 6% and 4% concentrate.

Macquarie upgrades production forecasts and, incorporating the company's ongoing buy-back, this drives a -5% reduction in FY17 forecasts for earnings per share. Outperform maintained. Target is $0.37.

Target price is $0.37 Current Price is $0.27 Difference: $0.1
If NMT meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

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

Macquarie rates ORG as No Rating (-1) -

Macquarie has revised its oil price forecasts, with FY18 estimated at US$52/bbl and FY19 at US$49/bbl. The broker revises down FY18 and FY19 earnings estimates for Origin by -11-12% to reflect the change.

Macquarie is restricted on rating and target at this stage.

Current Price is $6.77. Target price not assessed.

Current consensus price target is $7.67, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

UBS rates ORG as Buy (1) -

The company has increased gas and electricity prices in NSW, SA and Queensland by 4-17%.  UBS believes this should be positive for the company's earnings outlook.

The broker's Buy thesis is supported by the company's ability to benefit from rising electricity prices and improving market sentiment as debt is reduced.

Taking a 12-month view, the broker believes a combination of oil market re-balancing, a positive for oil prices, and lower debt and rising earnings should mean the reinstating of the company's dividend. Target rises to $8.50 from $8.30.

Target price is $8.50 Current Price is $6.77 Difference: $1.73
If ORG meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $7.67, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

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

Guidance has been downgraded, with the company expecting its first half insurance margin to be 8.5-9.5%. The fall in the share price exceeds Citi's estimated magnitude of the downgrade but the broker acknowledges credibility of management has taken a hit.

Of the main causes for the downgrade the rise in the frequency of medium-sized claims in Asia is of most concern to Citi as QBE has far less pricing power in Asia compared with Australia.

Citi reduces estimates for earnings per share in FY17 by -7% and FY18 by -5%. Rating is downgraded to Neutral from Buy and the target reduced to $12.75 from $14.10.

Target price is $12.75 Current Price is $11.87 Difference: $0.88
If QBE meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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

Credit Suisse rates QBE as Underperform (5) -

QBE has highlighted that increased emerging markets claims will cause a 100 basis points drag on first half and FY17 margins. Credit Suisse believes this is an underlying issue and not one-off in nature. Moreover, the broker is disappointed that improvements elsewhere in the business could not offset this loss.

After the fall in the share price, the broker believes the stock is now currently trading closer to fair value and the expensive price/earnings ratio is no longer as extreme.

Nevertheless, earnings risk is forecast to the downside and the broker maintains an Underperform rating. Target is reduced to $12.00 from $12.60.

Target price is $12.00 Current Price is $11.87 Difference: $0.13
If QBE meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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

Deutsche Bank rates QBE as Hold (3) -

Emerging markets have proven a headache for QBE this year as the insurer cops higher claims across everything from fire in Asia, crop losses in Ecuador and CTP equivalents in Colombia. The broker notes that global diversification means exposure to both low volatility regions and high volatility regions.

But it is this diversification that means the broker is "untroubled" by the earnings downgrade, suggesting yesterday's -10% fall underestimates the company's ability to manage risks. The broker sees the issue as temporary and while cutting forecasts, and target to $12.70 from $13.00, the broker retains Hold.

The broker also notes the $1bn buyback is yet to begin.

Target price is $12.70 Current Price is $11.87 Difference: $0.83
If QBE meets the Deutsche Bank target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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

Macquarie rates QBE as Outperform (1) -

Emerging markets business has experienced higher-than-expected claims in the first half. The major divisions are on track to report in line with budget. Macquarie notes underlying guidance appears softer relative to bullish consensus expectations.

The company downgrades guidance, which takes into account weather-related claims in Latin America and increased frequency of medium-sized risk claims and lower premium rates in Asia.

Macquarie believes a discount to peers is justified, given earnings uncertainty, but the current discount of around -15.5% is presenting an attractive longer-term value opportunity. Outperform retained. Target rises to $13.80 from $13.45.

Target price is $13.80 Current Price is $11.87 Difference: $1.93
If QBE meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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

Morgan Stanley rates QBE as Overweight (1) -

The company has flagged heightened claims activity in Asia amid legacy issues in Latin America and has downgraded the expected contribution from emerging markets.

Morgan Stanley calculates this equates to a -US$60m impact on the first half and suggests the company appears to be assuming further second half losses.

Elsewhere, the company has highlighted the rest of the portfolio is performing well. Given the improving market backdrop and valuation Morgan Stanley retains an Overweight rating. Target is reduced  to $13.40 from $13.90. In-Line industry view.

Target price is $13.40 Current Price is $11.87 Difference: $1.53
If QBE meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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

Morgans rates QBE as Upgrade to Add from Hold (1) -

Amid higher claims from emerging markets, the company has downgraded FY17 guidance. Morgans asserts the bumps on the road to recovery for the company remain annoying, although the drivers of this announcement are largely considered one-off.

The broker believes the fall in the share price is overdone and value is re-emerging for the stock. FY17 forecasts for earnings per share are downgraded by -10%. Target is reduced to $13.09 from $13.47. Rating is upgraded to Add from Hold.

Target price is $13.09 Current Price is $11.87 Difference: $1.22
If QBE meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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

Ord Minnett rates QBE as Lighten (4) -

QBE has downgraded its insurance margin for 2017, citing an increase in the frequency of medium-sized claims in Asia and pressures in Latin America. The sell-off in the stock is now much closer to Ord Minnett's target but caution prevails.

The broker retains an insurance margin forecast at around 8% for 2017 versus the company's revised target of 8.7%. The broker retains its previous concerns about optimistic guidance on underlying margins and also now has concerns over emerging markets.

Lighten rating retained. Target is $11.32.

Target price is $11.32 Current Price is $11.87 Difference: minus $0.55 (current price is over target).
If QBE meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.78, suggesting upside of 6.2% (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 QBE as Buy (1) -

UBS acknowledges the warning on emerging markets, which are around 11% of FY17 estimated gross written premium, will raise questions about the quality of the overall portfolio and whether further divesting is required.

While medium-term downgrades to earnings per share are disappointing, the broker notes improved market conditions across Australasia and greater stability in other regions.

Hence, the broker retains a Buy rating. Target is reduced to $13.20 from $13.85.

Target price is $13.20 Current Price is $11.87 Difference: $1.33
If QBE meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $12.78, suggesting upside of 6.2% (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 RFG as Sell (5) -

The company now expects FY17 underlying net profit growth of 15% versus prior guidance of 20%. International operations have been affected by the conversion of a significant opportunity being pushed into FY18.

 Meanwhile, domestic franchising has been flat, UBS observes. Sell rating retained. Target is $4.70.

Target price is $4.70 Current Price is $4.56 Difference: $0.14
If RFG meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.70, suggesting upside of 1.6% (ex-dividends)

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

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

In a 63 page sector update, Morgan Stanley analysts argue the case structural shifts in participation, household budgets and the competitive landscape imply in reality health insurers and private hospitals are more cyclical than investors tend to acknowledge when pricing share prices.

Price target has appreciated a little, as Ramsay Healthcare has overseas operations to compensate for a tougher environment domestically. Overall, occupancies and margins are projected to remain higher than for competitor Healthscope ((HSO)). Equal-Weight Rating retained, alongside an In-Line sector view. Price target $64.60 (was $64.30).

Target price is $64.60 Current Price is $72.10 Difference: minus $7.5 (current price is over target).
If RHC 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 $75.42, suggesting upside of 4.6% (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

Macquarie rates STO as Outperform (1) -

Macquarie reduces oil price forecasts for 2017, 2018, and 2019 by -8%, -12%, and -13% respectively because of lingering concerns surrounding the oversupply of oil.

With oil prices lower for longer, the broker believes Santos may reduce capital expenditure at GLNG. Outperform retained. Target is reduced to $4.00 from $4.30.

Target price is $4.00 Current Price is $2.92 Difference: $1.08
If STO meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $4.15, suggesting upside of 40.8% (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: 0.6

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

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

Macquarie reduces oil price forecasts for 2017, 2018, and 2019 by -8%, -12%, and -13% respectively because of lingering concerns surrounding the oversupply of oil.

Hence, the broker downgrades Senex to Neutral from Outperform and reduces the target to $0.30 from $0.35,  believing the stock is fairly valued at current prices.

Target price is $0.30 Current Price is $0.27 Difference: $0.03
If SXY meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $0.32, suggesting upside of 19.1% (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 WHC as Outperform (1) -

Credit Suisse marks to market metallurgical coal price forecasts,  lowering estimates for 2018. Net changes for prime hard coking coal mean forecasts are down -11% in 2017 and -4% in 2018. For PCI and semi-soft estimates are revised down -10% in 2017, and  -1% and -3% in 2018 respectively.

Outperform and $3.60 target retained.

Target price is $3.60 Current Price is $2.78 Difference: $0.82
If WHC meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting upside of 18.0% (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