Australian Broker Call

Credit Suisse rates AMC as Neutral (3) -

Amcor has suspended operations at its tobacco plant in Kharkiv, Ukraine last week amid continuing conflict between Russia and Ukraine. Credit Suisse notes the company's Russian plants continue to operate to the best of its knowledge. 

Competitors Phillip Morris and British American Tobacco are also believed to have suspended operations. Ukraine operations generated a US$100m revenue benefit to Amcor in 2020, equating to less than 1% of group revenue, while Russia accounts for around 1.2%.

The Neutral rating and target price of $17.50 are retained.

Target price is $17.50 Current Price is $14.74 Difference: $2.76
If AMC meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $18.30, suggesting upside of 24.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.7

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

Macquarie rates APX as Underperform (5) -

Appen has made a minority investment in Mindtech and Appen's CEO will join the Mindtech Board of Directors. Macquarie expects Appen has acquired a smaller than 30% stake, but notes investment in synthetic data is complimentary to the current business. 

Offering improved data privacy risk, synthetic data is expected to grow at an annual compound rate of 28% through to 2027. Given the company has no prior exposure to the synthetic data market, the investment increases the company's total addressable market. 

The Underperform rating and target price of $5.70 are retained. 

Target price is $5.70 Current Price is $6.76 Difference: minus $1.06 (current price is over target).
If APX meets the Macquarie target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.28, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates AZJ as No Rating (-1) -

Macquarie notes a maximum allowable revenue of $1,028m for Aurizon Holdings in FY23 following the release of a draft application. The application suggests a $60m capital recovery associated with Advance Planning Schedule since the first half result release. 

Early indications of volumes point to a soft February result, with performance impacted by weather. The broker notes thermal pricing of US$400 per tonne is yet to equate to a volume surge, and reflects low confidence in sustained elevated pricing. 

Macquarie is unable to provide a rating or target at present as it is under research restriction.

Current Price is $3.54. Target price not assessed.

Current consensus price target is $3.64, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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

UBS rates BSL as Buy (1) -

A tight supply chain and the Russia/Ukraine conflict have seen global pig iron prices rise around 20% in the last month.

For BlueScope Steel, UBS lowers its FY22 and FY23 EPS forecasts by -4% and -7%, on higher input costs causing falls across both
the North Star and Australian Steel products (ASP) spreads.

However, the broker's longer-term EPS forecasts lift marginally on higher long-term forecasts for hot rolled coil products. The Buy rating and $25.75 target are unchanged.

Target price is $25.75 Current Price is $20.83 Difference: $4.92
If BSL meets the UBS target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $25.06, suggesting upside of 32.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgan Stanley rates GMG as Overweight (1) -

Anticipating decade-high earnings uplift from Goodman Group's Investment segment, Morgan Stanley notes apparent subdued development earnings should be offset. Investors may need to wait out FY22 to see the full benefits of Goodman Group's business model. 

A development earnings compound annual growth rate of around 20% since FY14 could plateau, points out the broker, giving the appearance of subdued growth, but anticipated Investment segment growth of 10% per year from new developments will be an earnings driver moving ahead.

The Overweight rating and target price of $27.88 are retained. 

Target price is $27.88 Current Price is $21.38 Difference: $6.5
If GMG meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $27.17, suggesting upside of 27.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Morgans rates GNX as Add (1) -

Following a 1H earnings (EBITDA) miss for Genex Power versus Morgans expectation, the company announced funding had been secured for the Bouldercombe Battery Project.

The company has raised $40m via an institutional placement and a further $10m from a retail share purchase plan. Another $35m was secured in debt funding from Infradebt.

The broker sees potential 12 month upside of 114% for the share price and maintains an Add rating, while the target falls to $0.31 from $0.35.

Target price is $0.31 Current Price is $0.14 Difference: $0.17
If GNX meets the Morgans target it will return approximately 121% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates GOR as Initiation of coverage with Buy (1) -

UBS initiates coverage on Gold Road Resources with a Buy rating and $1.94 target. The 50%-owned Gruyere gold mine is considered to offer exposure to a long-life producing gold asset with its best years ahead.

The analyst expects increased production with almost no additional capex, and the increased production rates should keep downward pressure on unit costs.

The company has a 9.4% five year gold production compound annual growth rate (CAGR), which the broker finds compelling in a sector struggling for growth.

Target price is $1.94 Current Price is $1.70 Difference: $0.24
If GOR meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $1.75, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in December.

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 IPL as Upgrade to Outperform from Neutral (1) -

Continuing supply tightness and volatility looks to benefit nitrogen and phosphate prices, and therefore companies with exposure. Credit Suisse upgrades its June quarter fertiliser forecasts given elevated spot pricing, and Incitec Pivot stands to gain. 

The recommendation from Russia that producers halt fertiliser exports should add to an already tight market, but largely fixed input costs should see Incitec Pivot benefit from an extended run in fertiliser prices, suggests Credit Suisse.

The broker acknowledges investor negativity around recurring problems at the company's WALA plant, including a -US$110m earning impact from a leak in the first half, but finds the current price environment compelling.

The rating is upgraded to Outperform from Neutral and the target price increases to $3.85 from $3.58.

Target price is $3.85 Current Price is $3.46 Difference: $0.39
If IPL meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.88, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

UBS rates MFG as Sell (5) -

Despite the recent share price derating for Magellan Financial Group, UBS keeps a Sell rating due to emerging outflow risks in infrastructure and concerns whether staff options will help retain staff.

Larger-than expected (by consensus) longer-term structural retail outflows are also a risk, suggests the analyst.

The broker lowers its EPS forecasts for FY22 and FY23 by -1%, and by more than -10% in outer years due to increased
outflow estimates and negative operating leverage. The target falls to $13.50 from $15.40.

Target price is $13.50 Current Price is $14.35 Difference: minus $0.85 (current price is over target).
If MFG meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.44, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

Morgans rates MGH as Add (1) -

Morgans considers Maas Group has laid the foundations for further strong growth over FY23 and FY24, following the acquisition of a large-scale residential development site in Rockhampton, QLD.

The transaction increases the group’s development pipeline by 40% and diversifies the business by geography, points out the analyst. 

The broker likes the strong medium-term growth outlook and retains the Add rating. The target rises to $5.90 from $5.85.

Target price is $5.90 Current Price is $4.37 Difference: $1.53
If MGH meets the Morgans target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates MME as Buy (1) -

At 1H results, MoneyMe revealed an earnings miss versus Ord Minnett's expectation due to higher-than-expected impairment provisioning and marketing/opex expenses.

The broker sees the acquisition of SocietyOne (shareholder approval now given) as transformational to the company’s growth ambitions. It's thought the lending brand provides an established presence and active customer base.

The target price falls to $2.21 from $2.38 after peer multiples have retraced. Buy.

Target price is $2.21 Current Price is $1.39 Difference: $0.82
If MME meets the Ord Minnett target it will return approximately 59% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Credit Suisse rates QBE as Outperform (1) -

Credit Suisse notes QBE Insurance Group has offered underwhelming guidance for its year ahead given strong underlying momentum, but the broker expects the insurer will add further stability to future earnings through a large re-basing. 

The broker continues to forecast earnings per share growth of 20% and 30% in FY22 and FY23 which it expects to be conservative given the continuing strong rate environment. 

QBE Insurance Group remains Credit Suisse's preferred sector pick. The Outperform rating is retained and the target price decreases to $14.45 from $16.60.

Target price is $14.45 Current Price is $10.08 Difference: $4.37
If QBE meets the Credit Suisse target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $14.22, suggesting upside of 40.5% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

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

UBS rates SGM as Buy (1) -

A tight supply chain and the Russia/Ukraine conflict have seen global pig iron prices rise around 20% in the last month.

UBS retains its Buy rating on Sims as scrap prices are up, not down half-on-half, and volumes are growing.

In addition, margins are supported by an increasing focus on non-ferrous, explains the analyst. The target rises to $20.30 from $18.90.

Target price is $20.30 Current Price is $19.16 Difference: $1.14
If SGM meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $19.72, suggesting upside of 3.7% (ex-dividends)

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Ord Minnett rates SHL as Upgrade to Buy from Hold (1) -

Ord Minnett upgrades its rating for Sonic Healthcare to Buy from Hold after a -30% decline in share price in 2022. While earnings from covid testing are expected to contract sharply, the core diagnostic business is anticipated to recover.

Moreover, the broker suggests a new $500m share buyback will be supportive and potential exists for M&A activity given strong balance sheet capacity. The target slips to $37.30 from $38.70.

Target price is $37.30 Current Price is $32.67 Difference: $4.63
If SHL meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $39.11, suggesting upside of 21.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Macquarie rates STX as Outperform (1) -

Despite the announcement of a conventional gas discovery at Strike Energy's South Erregulla site, Macquarie notes market response has been underwhelming but expects flow testing and resource certification will improve confidence. 

Volume estimates were not provided but the broker expects volume exceeds the 350 petajoules required for the company's Project Haber. Expect Walyering to be brought to production before capital is invested in South and West Erregulla, in order to optimise gas portfolio. 

The Outperform rating is retained and the target price increases to $0.50 from $0.48.

Target price is $0.50 Current Price is $0.28 Difference: $0.22
If STX meets the Macquarie target it will return approximately 79% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates TYR as Buy (1) -

Transaction volume for Tyro Payments picked up 43% in February compared to the previous corresponding period, following a
seasonally weak January, explains Ord Minnett.

The analyst expects transaction volume will  continue to gain on the back of improving retail and hospitality conditions. The Buy rating and $3 target price are retained.

Target price is $3.00 Current Price is $1.55 Difference: $1.45
If TYR meets the Ord Minnett target it will return approximately 94% (excluding dividends, fees and charges).

Current consensus price target is $3.13, suggesting upside of 99.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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