Australian Broker Call

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

While Macquarie continues to envisage underlying trends are challenging, ANZ Bank's institutional book skew should result in better impairment experience in the short term.

Hence, the broker considers the risks are more balanced and upgrades to Outperform from Neutral. Target rises to $18.50 from $18.00.

Nevertheless, the broker believes consensus continues to underestimate the margin pressures that are resulting from competition and lower interest rates as well as a lack of credit growth.

Target price is $18.50 Current Price is $17.89 Difference: $0.61
If ANZ meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $21.42, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Macquarie rates AST as Neutral (3) -

The Australian Energy Regulator's draft decision adds to revenue in the next 2-3 years, Macquarie observes. The broker notes Ausnet Services has avoided ambitious expenditure claims, which has meant the majority of its expenditure is accepted.

The upside comes from the development of the renewables portfolio, with government sponsoring another 600MW of renewables that create additional connection agreements. The broker retains a Neutral rating. Target is raised to $2.00 from $1.87.

Target price is $2.00 Current Price is $1.98 Difference: $0.02
If AST meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.82, suggesting downside of -9.5% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Macquarie rates BBN as Outperform (1) -

Baby Bunting's AGM has highlighted upside to margins with a continuation of strong trading in the year to date. Gross margins have improved to 37.5% from 36.2% in FY20.

Macquarie expects gains will be sustainable and also notes the business is taking market share. While the shares have re-rated strongly, there are a number of growth levers that remain attractive, in the broker's view.

Outperformed retained. Target is raised to $5.30 from $4.50.

Target price is $5.30 Current Price is $4.87 Difference: $0.43
If BBN meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.90, suggesting downside of -0.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates BBN as Overweight (1) -

Baby Bunting Group's first-quarter comp sales grew 17%, materially above Morgan Stanley's 6% estimate. The group reiterated its plans to open 4-6 new stores in FY21.

Baby Bunting's online performance has been exceptional, states the broker, with the first quarter group online sales growing by 126%. Gross margin grew to 37.5%, which was above the broker's forecast of 36.5%.

On the flip side, costs were on the higher side too from covid-19 and channel switching. No FY21 guidance was provided but the broker expects upside if restrictions in Victoria ease.

Morgan Stanley retains its Overweight rating with a target price of $5.05. Industry view: In-line.

Target price is $5.05 Current Price is $4.87 Difference: $0.18
If BBN meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.90, suggesting downside of -0.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates BHP as Outperform (1) -

BHP Group has lifted its stake in Gulf of Mexico oilfield, Shenzi, to 72%, for -US$505m.

The deal is immaterial to numbers but may be the first of more acquisitions in petroleum, Credit Suisse suggests, with the company being in a position to invest at a time when many are looking to exit assets as oil prices slump.

Credit Suisse retains an Outperform rating and $39 target.

Target price is $39.00 Current Price is $36.28 Difference: $2.72
If BHP meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $41.04, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Morgan Stanley rates BHP as Overweight (1) -

BHP Group will be acquiring an additional 28% working interest in Shenzi for -US$505m, raising BHP's stake to 72% and adding 11kboe per day.

Morgan Stanley expects FY21 oil production of 99mboe, but notes the additional stake would increase its base case production to 102mboe.

The broker does not consider the transaction material in the context of BHP's enterprise value, but notes the equity expansion still appears modestly accretive on its base case price deck.

Overweight rating is retained with a target price of $40.70. Industry view: Attractive.

Target price is $40.70 Current Price is $36.28 Difference: $4.42
If BHP meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $41.04, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 BHP as Buy (1) -

BHP Group has acquired an additional 28% working interest in Shenzi, a six-lease development in the Gulf of Mexico from Hess for -US$505m. Post the acquisition, BHP will have an effective interest of 72% and retain operatorship.

UBS considers the initial purchase price to be high against its valuation, but notes BHP looks confident the growth options will move forward. Also, the acquisition appears low risk given BHP is already the operator and should know the asset well.

The Buy rating is retained with the target price unchanged at $41.

Target price is $41.00 Current Price is $36.28 Difference: $4.72
If BHP meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $41.04, suggesting upside of 13.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 CHN as Outperform (1) -

Drilling at the Julimar nickel/copper/PGE project has extended the shallower mineralisation and identified a new zone. Macquarie extends mine life assumptions to eight years to reflect the latest results, raising the target to $3.30 from $2.50.

Securing access to the state forest area to undertake exploration also presents a catalyst. Macquarie maintains an Outperform rating.

Target price is $3.30 Current Price is $2.83 Difference: $0.47
If CHN meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates CIP as Neutral (3) -

The company has acquired a -$43m cold storage facility on an initial 5.5% yield. The acquisition is funded by existing debt capacity.

Credit Suisse continues to believe the stock will be well supported as it is the only 100% Australian invested pure listed industrial A-REIT.

The broker does not rule out more debt funded acquisitions or further equity raisings, noting the share price continues to trade at a premium.

However, further debt or new equity is not assumed in estimates. Neutral retained. Target is raised to $3.18 from $3.17.

Target price is $3.18 Current Price is $3.15 Difference: $0.03
If CIP meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.28, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates CWY as Accumulate (2) -

Cleanaway Waste Management has gone on public exhibition with its proposed energy-from-waste (EfW) facility. The proposal, deemed a state significant development, will be assessed by the minister for planning and public spaces or the Independent Planning Commission (IPC), reports Ord Minnett.

The proposal aims at building an energy-from-waste (EfW) facility that can generate up to 55MW of power by thermally treating up to 500,000t per annum of residual municipal solid waste and residual commercial and industrial waste streams.

The proposal is expected to create 900 direct construction jobs over the construction period and approximately 50 full-time employee positions.

The Accumulate rating is maintained with the target price unchanged at $2.60.

Target price is $2.60 Current Price is $2.10 Difference: $0.5
If CWY meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.53, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates DCN as Underperform (5) -

Macquarie observes a solid start to FY21, which is an important year for Dacian Gold as any production improvement provides greater exposure to spot gold prices.

The company's preliminary update for the first quarter signals production of 32,800 ounces from Mount Morgans. This produces a 36% lift in the broker's operating earnings estimates for FY21. Target is raised to $0.36 from $0.34. Underperform maintained.

Target price is $0.36 Current Price is $0.39 Difference: minus $0.03 (current price is over target).
If DCN meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -1.0

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

Credit Suisse rates FBU as Neutral (3) -

Credit Suisse increases FY21 earnings (EBIT) forecasts to NZ$435m and FY22 to NZ$438m. The broker notes housing participants, construction developers and steel distributors are all signalling order books remain strong.

Factoring in better revenue expectations underpins the view that the company's cost reduction program will have better traction than previously estimated. Neutral retained. Target rises to NZ$4.03 from NZ$3.81.

Current Price is $3.92. Target price not assessed.

Current consensus price target is $3.66, suggesting downside of -7.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.0

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

Macquarie rates IAG as Outperform (1) -

Insurance Australia Group has settled the class action relating to add-on insurance products sold by Swann Insurance through motor dealers. Macquarie considers the -$70m settlement is a one-off cost for a business that was divestment some years ago.

The broker continues to believe the stock is over-compensating for the risk of potential business interruption losses. Outperform. Target is $5.50.

Target price is $5.50 Current Price is $4.64 Difference: $0.86
If IAG meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $5.87, suggesting upside of 25.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates IAG as Hold (3) -

Insurance Australia Group has agreed to a class action settlement related to add-on insurance products sold by Swann Insurance.

After including all related costs and recoveries, the insurer anticipates a net after-tax impact of less than -$50m. This impact will be reflected in the group's reported earnings for the six months ended 31 December 2020.

The settlement involves a gross payment of -$138m and Ord Minnett notes some amount must have been held in the balance sheet provisions so as to have only a -$50m after-tax impact.

After updating its financial model, Ord Minnett maintains its Hold recommendation while trimming the target price to $5.08 from $5.09.

Target price is $5.08 Current Price is $4.64 Difference: $0.44
If IAG meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.87, suggesting upside of 25.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates LNK as Outperform (1) -

Macquarie notes a number of small impacts from the 2020/21 Australian government budget including the stapling of superannuation accounts for employees, freezing new membership of underperforming funds and stricter requirements for trustees.

The broker makes no changes to estimates however and believes the long-term valuation remains attractive. Outperform rating and $5.10 target maintained.

Target price is $5.10 Current Price is $3.90 Difference: $1.2
If LNK meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $4.54, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates MYX as Neutral (3) -

New information points to likely delays in the launch of generic Nuvaring to 2021, while Citi also notes the launch plans for Nextstellis are equally unclear and the range of possible outcomes remains wide.

Nevertheless, regulatory delays are par for the course in the pharmaceutical industry and the broker makes no changes to forecasts. Neutral/High Risk rating maintained. Target is $0.37.

Target price is $0.37 Current Price is $0.32 Difference: $0.05
If MYX meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $0.37, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates MYX as Neutral (3) -

Mayne Pharma has received a response from the US FDA in relation to its abbreviated new drug application for a generic version of Nuvaring.

Macquarie now assumes approval comes in the first half of FY22, later than previously assessed. Meanwhile, the outlook is considered challenging while an update on Nextellis could be the next catalyst for the stock.

Neutral retained. Target is reduced to $0.35 from $0.38.

Target price is $0.35 Current Price is $0.32 Difference: $0.03
If MYX meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $0.37, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates MYX as Neutral (3) -

Mayne Pharma Group received a complete response letter (CRL) from the US FDA regarding the application for a generic version of NuvaRing. Management is confident the issues raised by the FDA will be addressed in a timely matter.

Before this, UBS had expected NuvaRing to launch in the second half of FY21. Now, based on the update, the broker has pushed the launch to the first half of FY22.

UBS notes the pivot from generics to branded sales remains a work in progress for the group and points out in the interim, Mayne Pharma needs to protect its base revenues for the generics division. 

The broker maintains its Neutral rating with a target price of $0.37.

Target price is $0.37 Current Price is $0.32 Difference: $0.05
If MYX meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $0.37, suggesting upside of 14.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates NCM as Accumulate (2) -

Newcrest Mining has received conditional approval to list on the Toronto Stock Exchange on October 13. The move is part of the company's growth strategy.

Ord Minnett notes this move would increase the miner's visibility and access to the large North America capital pool and could be more about future M&A direction. 

For now, Ord Minnett maintains its Accumulate recommendation with a $34.30 target price.

Target price is $34.30 Current Price is $31.06 Difference: $3.24
If NCM meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $36.31, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Credit Suisse rates NST as Outperform (1) -

The proposed merger with Saracen Mineral Holdings ((SAR)) will create a new gold heavyweight, Credit Suisse asserts. The proposed deal is structured as a nil premium merger of equals.

The Australian assets are co-located across two regions and offer material operating flexibility and optimisation benefits, the broker adds.

Post completion, Northern Star's shareholders would own 64% of the merged company. Outperform retained. Target is raised to $17.90 from $16.85.

Target price is $17.90 Current Price is $15.29 Difference: $2.61
If NST meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $14.39, suggesting downside of -7.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates NST as No Rating (-1) -

Northern Star and Saracen Mineral Holdings have agreed to a merger of equals whereby Northern Star will acquire the latter's shares.

The merged company expects to be able to realise $1.5-2.0bn in synergies over the next 10 years. The merged company will produce 1.6m ounces in FY21 from three production centres.

The scheme is subject to shareholder approval and the first hearings are scheduled for December. Macquarie is on research restrictions and unable to advise of a rating or target.

Current Price is $15.29. Target price not assessed.

Current consensus price target is $14.39, suggesting downside of -7.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

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

Northern Star Resources and Saracen Mineral Holdings ((SAR)) have agreed to a $16bn merger-of-equals under which Northern Star will acquire 100% of the shares in Saracen Mineral Holdings.

Morgan Stanley notes geographic concentration will drive potential synergy benefits and rationalisation of the Kalgoorlie district and Yandal belt will allow optimisation of mine sequencing, infrastructure and growth investment.

Synergies worth $1.5-$2bn (pre-tax) are expected to be unlocked over the next 10 years and the combined entity would globally have the 6th largest market cap and 8th largest gold production.

Equal-weight rating. Target is $12.65. Industry view: Attractive.

Target price is $12.65 Current Price is $15.29 Difference: minus $2.64 (current price is over target).
If NST meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.39, suggesting downside of -7.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates NST as Lighten (4) -

Northern Star Resources will purchase 100% of Saracen Mineral Holdings ((SAR)) shares via a scheme of arrangement.

Ord Minnett is yet to fully model the details and impact but notes the rationale for the merger (combining complementary assets, aligning skills and achieving scale) appears compelling and expects significant synergies.

The broker highlights the combined entity will potentially produce 2m ounce per annum and will be a prominent stock in the Australian gold sector.

Pending more details, the broker chooses to retain its Lighten recommendation with a target price of $11.50.

Target price is $11.50 Current Price is $15.29 Difference: minus $3.79 (current price is over target).
If NST meets the Ord Minnett target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.39, suggesting downside of -7.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates SAR as Neutral (3) -

The company and Northern Star have announced a merger of equals. Given the absence of a premium, Citi believes Saracen will need to sell the idea to shareholders as a valuation uplift to make it attractive.

Still, a combined entity makes operating sense, especially in Western Australia, and would position the merged company for a valuation re-rating.

The merged business would be the ninth largest gold producer by production and the deal is expected to unlock $1.5-2.0bn in pre-tax valuation synergies over 10 years. Citi's earnings estimates are unchanged and the Saracen target is lifted to $6.20 from $6.00. Neutral retained.

Target price is $6.20 Current Price is $5.72 Difference: $0.48
If SAR meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.83, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SAR as No Rating (-1) -

Saracen Mineral Holdings and Northern Star ((NST)) have agreed to a merger of equals via a scheme of arrangement. The merged company will operate under the Northern Star banner and is targeting 2m ounces of annual production by FY27.

Saracen shareholders will receive 0.3763 Northern Star shares for each share held. Saracen will also pay a special fully franked dividend of 3.8c. Macquarie is subject to research restrictions and cannot advise a rating or target.

Current Price is $5.72. Target price not assessed.

Current consensus price target is $5.83, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

Saracen Mineral Holdings and Northern Star Resources ((NST)) have agreed to a $16bn merger-of-equals under which Northern Star will acquire 100% of the shares in Saracen Mineral Holdings.

Morgan Stanley notes geographic concentration will drive potential synergy benefits and rationalisation of the Kalgoorlie district and Yandal belt will allow optimisation of mine sequencing, infrastructure and growth investment.

Synergies worth $1.5-$2bn (pre-tax) are expected to be unlocked over the next 10 years and the combined entity would globally have the 6th largest market cap and 8th largest gold production.

Morgan Stanley reaffirms its Equal-weight rating with a target price of $5.65. Industry view: Attractive.

Target price is $5.65 Current Price is $5.72 Difference: minus $0.07 (current price is over target).
If SAR 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 $5.83, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates SAR as Hold (3) -

Northern Star Resources ((NST)) will purchase 100% of Saracen Mineral Holdings shares via a scheme of arrangement.

Ord Minnett is yet to fully model the details and impact but notes the rationale for the merger (combining complementary assets, aligning skills and achieving scale) appears compelling and expects significant synergies.

The broker highlights the combined entity will potentially produce 2m ounce per annum and will be a prominent stock in the Australian gold sector.

Pending more details, the broker chooses to retain its Hold recommendation with a $4.70 target price.

Target price is $4.70 Current Price is $5.72 Difference: minus $1.02 (current price is over target).
If SAR meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.83, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates SAR as Buy (1) -

Saracen Mineral Holdings and Northern Star Resources ((NST)) announced a nil premium merger of equals proposal. In UBS's view, the merger is a rare example of a mining merger with clear and material synergies to unlock, estimated by the two companies at $1.5-2bn (pre-tax) over the next 10 years.

According to the broker's forecasts, this translates to $70-90/oz of production which is considered to be a reasonable estimate of the opportunity. The broker also highlights operational synergies led by optimising regional mines and mills.

Buy rating maintained with a target price of $6.75.

Target price is $6.75 Current Price is $5.72 Difference: $1.03
If SAR meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $5.83, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates SHV as Buy (1) -

Select Harvests has acquired Piangil Almond Orchard at a price of -$129m. UBS views the acquisition positively, believing it will enhance leverage to improving market dynamics in the medium-term.

The broker highlights the acquisition expands Select Harvest's owned orchards and improves its tree maturity profile. While the acquisition price does not appear cheap, the broker feels this is justified looking at the favourable geographic positioning, maturity profile and yield expectations.

Believing Select Harvest's asset base provides significant downside risk protection, UBS retains its Buy rating with the target price increasing to $7.90 from $7.75.

Target price is $7.90 Current Price is $6.28 Difference: $1.62
If SHV meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates SKO as Outperform (1) -

Serko has completed an NZ$57.5m capital raising amid progress on its joint venture with Booking.com. Macquarie estimates Booking.com could add around $82m to revenue for Serko in time.

While corporate travel volumes remain low, New Zealand has shown a path to recovery once lockdowns ease and the pandemic is under relative control.

The broker also envisages scope for upside to medium-term forecasts if the business delivers versus market expectations. Target is raised to NZ$5.51 from NZ$4.55. Outperform retained.

Current Price is $4.54. Target price not assessed.

Current consensus price target is $6.42, suggesting upside of 42.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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 WBC as Upgrade to Outperform from Neutral (1) -

Macquarie remains cautious about the short-term outlook but believes issues are relatively well understood and appear to be captured in current discounted valuations.

Moreover, over the longer term Westpac's business mix appears to be undervalued although Macquarie recognises the bank needs to address complexity to achieve a much-needed efficiency benefit.

The broker upgrades to Outperform from Neutral. Target rises to $18.00 from $17.50.

Target price is $18.00 Current Price is $17.41 Difference: $0.59
If WBC meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $20.11, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Ord Minnett rates WHC as Upgrade to Lighten from Sell (4) -

Ord Minnett upgrades Whitehaven Coal to Lighten from Sell with the target price rising to $1 from $0.70.

A 20% rally in coal prices has seen Whitehaven Coal materially outperform, observes the broker, swinging back to roughly operating income break even. Even with short term prices stabilising, the broker is doubtful the cycle has bottomed just yet due to high inventory levels and supply cuts being temporary.

Ord Minnett notes the company remains cash loss-making and expensive.

Target price is $1.00 Current Price is $1.08 Difference: minus $0.08 (current price is over target).
If WHC meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.52, suggesting upside of 40.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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