Australian Broker Call

Macquarie rates ADI as Outperform (1) -

The company has announced a $30m equity raising to fund the acquisition of four industrial assets for $38m. Macquarie assesses the transaction as slightly dilutive to earnings.

If the company can resolve the first lease expiry and capitalise on future rental upside, the deal should become accretive over time, the broker acknowledges. Outperform rating maintained. Target is $3.

Target price is $3.00 Current Price is $2.75 Difference: $0.25
If ADI meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.92, suggesting upside of 6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Credit Suisse rates AMC as Neutral (3) -

The broker notes China is now taxing plastic resins at 25% but this has not impacted on Amcor's performance in China given resin prices fell, offsetting the tax. However Amcor's PE is now up to 17x which the broker sees as stretched, implying investors are paying for 13 years of earnings.

This might be sustainable, but the broker suggests restrictions against plastic production must soon come into being on a global environmental basis. Neutral and $14.90 target retained.

Target price is $14.90 Current Price is $16.40 Difference: minus $1.5 (current price is over target).
If AMC meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.59, suggesting downside of -4.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Deutsche Bank rates ANN as Downgrade to Hold from Buy (3) -

Deutsche Bank envisages risks to earnings from slowing global economic growth. Execution risks also exist with the rationalisation and expansion of manufacturing facilities.

The stock has re-rated and now offers 7% compound growth in earnings per share between FY19-22. The broker downgrades to Hold from Buy. Target is $27.19.

Target price is $27.19 Current Price is $25.70 Difference: $1.49
If ANN meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $26.22, suggesting upside of 2.0% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.4

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

Deutsche Bank rates AST as Hold (3) -

FY19 results were in line with Deutsche Bank's forecasts. Operating cash flow was weaker than expected, down -8.2%. FY20 distribution guidance of 5% growth reflects an attractive yield of 5.5%, the broker assesses.

Around 86% of revenue is locked in until January 2021. Uncertain energy policy and Australia's government focus on reducing energy prices are key concerns for future growth in the stock, Deutsche Bank suggests. Hold rating and $1.80 target.

Target price is $1.80 Current Price is $1.84 Difference: minus $0.04 (current price is over target).
If AST meets the Deutsche Bank target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.77, suggesting downside of -3.7% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates AST as Neutral (3) -

Macquarie was disappointed with net profit in the FY19 results. The contribution from transmission and electricity distribution was lower than expected. Distribution guidance was in line with expectations.

Re-rating is expected to come from accelerated cost reductions and a clear government policy around interconnectors and renewable targets. Neutral rating and $1.80 target maintained.

Target price is $1.80 Current Price is $1.84 Difference: minus $0.04 (current price is over target).
If AST meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.77, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

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

FY19 results were better than Morgan Stanley expected. The broker estimates AusNet Services can continue to grow operating cash flow at 3-5% per annum to FY21 before lower regulatory allowances start to flow through.

Equal-weight. Target is raised to $1.84 from $1.72. Industry view: Cautious.

Target price is $1.84 Current Price is $1.84 Difference: $0
If AST meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates AST as Hold (3) -

Earnings lifted in the second half of FY19 and beat Morgans' forecast. Excluding customer contributions, operating earnings (EBITDA) were flat but still exceeded forecasts by 4%. Distribution guidance of 10.2c per security for FY20 implies 5% growth on a cash yield of 5.6%.

While not willing to commit to sustaining this level of distributions through the next regulatory re-set, the company indicated it had good visibility on earnings, amid traction on its cost reduction program and a growing unregulated investment pipeline.

Morgans maintains a Hold rating and raises the target to $1.74 from $1.73.

Target price is $1.74 Current Price is $1.84 Difference: minus $0.1 (current price is over target).
If AST meets the Morgans target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.77, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates AST as Hold (3) -

FY19 underlying net profit was slightly ahead of Ord Minnett's forecasts. The broker notes headwinds remain in the regulated business, although the company expects strong growth from unregulated assets.

FY20 dividends are expected to be 10.2c per security, an increase of 5% on FY19. The company expects 3% per annum growth in the regulatory asset base to FY22. Ord Minnett maintains a Hold rating and $1.85 target.

Target price is $1.85 Current Price is $1.84 Difference: $0.01
If AST meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting downside of -3.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Ord Minnett rates CAJ as Buy (1) -

Ord Minnett believes investors have woken up to the prevailing tailwinds and adjusts models to account for indexation. Revenue growth has been supported by long-term average growth in benefits of 6% and this is now supplemented by indexation of almost 80% of medical benefit services from FY21.

The broker considers the sector appealing for the long-term. Buy rating maintained. Target rises to $0.27 from $0.24.

Target price is $0.27 Current Price is $0.23 Difference: $0.04
If CAJ meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates CBA as Neutral (3) -

Citi observes Commonwealth Bank has utilised the March quarter to accelerate the recognition of customer remediation across wealth management advice & products and has now dealt with key issues, so a top up in future looks less likely.

Underlying results missed expectations by -9% because of weak operating income growth and higher loan loss expenses. Citi maintains a Neutral rating and $70.50 target.

Target price is $70.50 Current Price is $72.68 Difference: minus $2.18 (current price is over target).
If CBA meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Credit Suisse rates CBA as Outperform (1) -

CBA's underlying $2.2bn March Q earnings are below the broker's quarterly forecast run-rate of $2.4bn, predominantly driven by lower revenues on the re-basing of fee income and some large weather events. Expenses and bad debts are tracking in line.

While the miss is disappointing the broker believes the fee re-basing, along with further remediation provisions, appears to now end the structural re-base. FY19 forecast earnings fall -7% and target falls to $76 from $78 but Outperform retained.

Target price is $78.00 Current Price is $72.68 Difference: $5.32
If CBA meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Deutsche Bank rates CBA as Sell (5) -

Third quarter net profit of $1.7bn appears weak to Deutsche Bank. This implies around 7-8% growth is needed in the fourth quarter in order to meet forecasts for the second half, a tough ask in the broker's view.

Revenue declined -4% and expenses rose 1%. Deutsche Bank retains a Sell rating and $60 target.

Target price is $60.00 Current Price is $72.68 Difference: minus $12.68 (current price is over target).
If CBA meets the Deutsche Bank target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $69.58, suggesting downside of -4.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Macquarie rates CBA as Underperform (5) -

Macquarie notes third quarter results for the bank are typically weak but the trends have become particularly challenging. The March quarter was affected by an elevated level of customer remediation provisions and soft revenue.

The broker believes Commonwealth Bank is ahead of its peers on re-setting the business but finds it difficult to justify the extent of the current premium. Underperform rating and $68.50 target maintained.

Target price is $68.50 Current Price is $72.68 Difference: minus $4.18 (current price is over target).
If CBA 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 $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Morgan Stanley rates CBA as Underweight (5) -

March quarter cash profit was -27% below Morgan Stanley's forecasts. Excluding remediation, the broker noted continuing cash profit was down -8.5% on the first half quarterly average.

Morgan Stanley suspects pressure on banking and wealth management fees is a key source of earnings risk. While management believes it has adequately provided for customer remediation the broker envisages potential for more issues to emerge.

Morgan Stanley maintains a $62 target and Underweight rating. Industry view: In-Line.

Target price is $62.00 Current Price is $72.68 Difference: minus $10.68 (current price is over target).
If CBA 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 $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Morgans rates CBA as Downgrade to Hold from Add (3) -

The March quarter trading update was softer than Morgans expected, largely because of the re-basing of non-interest income. Non--interest income was down -10% versus the first half.

Morgans reduces cash estimates for earnings per share for FY19 and FY20 by -9.1% and -6.2% respectively. Rating is downgraded to Hold from Add because of a lower target and share price strength over the past month. Target is reduced to $74 from $76.

Target price is $74.00 Current Price is $72.68 Difference: $1.32
If CBA meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Ord Minnett rates CBA as Hold (3) -

Ord Minnett reduces earnings forecasts by -4% over FY20-21 as the bank delivered a weaker third quarter trading update. Asset quality metrics also deteriorated over the quarter, with bad and doubtful debts increasing to $314m. Consumer arrears were higher in all segments.

The bank topped up its provisions for remediation, regulatory and compliance programs by $714m, $704m of which went through continuing operations.

Ord Minnett maintains a Hold rating and lowers the target to $71.60 from $73.55. The broker also notes a strong capital position that should emerge over the next 12 months and the medium-term cost savings potential.

Target price is $71.60 Current Price is $72.68 Difference: minus $1.08 (current price is over target).
If CBA 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 $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

UBS rates CBA as Neutral (3) -

The broker retains a Neutral rating and $72 target with the analysts describing the quarterly update as "weak". Even excluding the larger-than-anticipated remediation provisions, UBS analysts point out cash profits are still some -3% below what they had penciled in.

UBS acknowledges Q3 is seasonally a weak period for CommBank, but yesterday's update is seen as "weak" nevertheless. Both credit impairment charges and mortgage delinquencies are on the rise, the analysts note.

Forecasts have been lowered. Noteworthy: UBS has now removed all prospect for increases in dividends in the years ahead, instead projecting a stable annual payout of 431c to shareholders.

Target price is $72.00 Current Price is $72.68 Difference: minus $0.68 (current price is over target).
If CBA meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $69.58, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

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

The company has announced senior executive changes, which Morgan Stanley believes will come as little surprise to shareholders as the board looks to improve investor confidence since the failed merger with McMillan Shakespeare ((MMS)) and multiple earnings downgrades.

In an update on the first half, with results due May 24, the company has announced a cash impairment of -$110-130m linked to the underperformance of Grays and Right2Drive. The impairment is not expected to trigger a shareholder debt covenant.

Equal-weight rating. Industry view In-Line. Target is $1.00.

Target price is $1.00 Current Price is $0.90 Difference: $0.1
If ECX meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.05, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

UBS rates ECX as Buy (1) -

EclipX Group has announced non-cash impairments of -110-$130m for the first half and does not expect this to lead to a breach of its debt covenants. The company has confirmed interest from a number of parties regarding the sale of Grays and Right2Drive and also intends to sell its Australian commercial equipment financing business.

The managing director and CEO has stepped down and the updated management structure, UBS believes, reinforces the focus on the performance of the core fleet business, which should alleviate the issues with the balance sheet. Buy rating and $1 target maintained.

Target price is $1.00 Current Price is $0.90 Difference: $0.1
If ECX meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.05, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Ord Minnett rates IDX as Upgrade to Buy from Accumulate (1) -

Ord Minnett believes investors have woken up to the prevailing tailwinds and adjusts models to account for indexation. Revenue growth has been supported by long-term average growth in benefits of 6% and this is now supplemented by indexation of almost 80% of medical benefit services from FY21.

The broker considers the sector appealing for the long-term. The broker also revises its view of the potential contribution from the soon-to-be-opened Prostate Centre of Excellence clinic.

Rating is upgraded to Buy from Accumulate and the target raised to $3.30 from $2.99.

Target price is $3.30 Current Price is $3.18 Difference: $0.12
If IDX meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $3.21, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Macquarie rates IEL as Outperform (1) -

The company's digital strategy is positioned to disrupt the global student recruitment industry and the benefits are yet to be reflected in earnings, Macquarie asserts.

Leading indicators are supportive and the broker believes a premium in the stock is justified in the context of scarcity, leverage to structural tailwinds and a strengthened market position.

Target is raised to $17.50 from $15.20 and an Outperform rating is maintained.

Target price is $17.50 Current Price is $15.40 Difference: $2.1
If IEL meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $14.99, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Citi rates IFL as Neutral (3) -

Citi reduces FY19 estimates for earnings per share by -4.5%, largely to reflect the lower coupon rate on the debt note issued by ANZ Bank ((ANZ)) and subscribed by IOOF. The broker envisages upside is possible if the company is successful in executing the deal.

In the absence of a deal there are a number of downside risks, including advice remediation costs eating into profit, amid the need to materially lower forecasts if the deal does not proceed on July 1. Neutral/High Risk rating and $5.90 target maintained.

Target price is $5.90 Current Price is $5.47 Difference: $0.43
If IFL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates IFL as Neutral (3) -

An updated deal on IOOF's acquisition of ANZ Bank's ((ANZ)) wealth business sees the coupon reset to 2% from 14.4% and a termination option added, with APRA approval now required. The broker cuts forecast earnings by -7% and -21.5% in FY19-20.

The broker further notes IOOF's remediation provisions are much lower than peers. While the fund manager runs a smaller business, extrapolation from peer remediation suggests charges may prove to be "well above" IOOF's expectations. The stock is trading at an attractive valuation but risks keep the broker on Neutral. Target unchanged at $5.90.

Target price is $5.90 Current Price is $5.47 Difference: $0.43
If IFL meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates IFL as Neutral (3) -

The company has updated on the progress with the acquisition of the OnePath pensions & investments business. Going forward, IOOF will no longer receive any economic interest for the business and Macquarie believes the timing and likelihood of a deal going ahead is adversely affected.

The completion of the transaction remains conditional on the receipt of no objection notices from custodians and ANZ Bank ((ANZ)). Should delays extend to July 5, the deal will need additional approval from the Australian Prudential Regulatory Authority (APRA) following recent legislative amendments.

Macquarie maintains a Neutral rating and reduces the target to $5.85 from $6.00.

Target price is $5.85 Current Price is $5.47 Difference: $0.38
If IFL meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

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

While the successor fund transfer of the ANZ P&I products has been completed, Morgan Stanley notes the deal remains conditional on notices of no objection from the trustees of ANZ Bank ((ANZ)). So far this is not occurred.

It appears to the broker likely that approval from the Australian Prudential Regulatory Authority becomes a condition precedent to completion of the transfer. Morgan Stanley pushes back the timing for realised synergies, although continues to target is $75m in the long run.

Equal-weight. Target is reduced to $5.45 from $5.75. Industry view: In Line.

Target price is $5.45 Current Price is $5.47 Difference: minus $0.02 (current price is over target).
If IFL meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.78, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

UBS rates IFL as Neutral (3) -

The coupon rate on the $800m debt note arrangement in relation to the proposed acquisition of the ANZ Bank pensions & investments business ((ANZ)) has stepped down to 2.0% per annum from 14.4% per annum.

As a result, IOOF will no longer share in the economics of the business until the deal is completed. Completion hinges on approval from OnePath custodians and Australian Prudential Regulatory Authority (APRA) approval would also be required should the sign off occur after July 5 2019.

UBS believes IOOF is likely to redeem the note and reduce debt until the outcome for the P&I business becomes clear. UBS maintains a Neutral rating and $5.80 target.

Target price is $5.80 Current Price is $5.47 Difference: $0.33
If IFL meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.78, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgans rates IPL as Hold (3) -

Morgans expects a weak first half result when the company reports on May 20. This is the result of Queensland floods, the east coast drought, gas supply issues and plant disruptions. The issues are considered largely one-off in nature.

Looking towards FY20 the broker believes the stock is fairly priced and maintains a Hold rating. Target is reduced to $3.34 from $3.48.

Target price is $3.34 Current Price is $3.24 Difference: $0.1
If IPL meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 13.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Ord Minnett rates LLC as Accumulate (2) -

Press speculation suggests a Japanese company is considering making a bid to acquire Lendlease. Lendlease confirmed it has not received an approach.

Despite this, Ord Minnett notes the stock closed 8.7% higher, attributed to a linkage with Mitsui as a potential buyer. The broker lifts valuation to reflect increased M&A potential and raises the target to $15.85 from $14.50. Accumulate maintained.

Target price is $15.85 Current Price is $13.69 Difference: $2.16
If LLC meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $15.57, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.9

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

UBS rates NWS as Buy (1) -

Third quarter results were slightly ahead of UBS estimates. Costs were better than expected at Foxtel which offset a miss in digital real estate. FY19 forecasts are unchanged.

The broker maintains a Buy rating and $20.75 target.

Target price is $20.75 Current Price is $16.58 Difference: $4.17
If NWS meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $21.11, suggesting upside of 27.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.4

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

Credit Suisse rates RWC as Outperform (1) -

The broker believes Reliance Worldwide's FY earnings downgrade to -7% below consensus is half related to non-recurring items in the US, a third to the downturn in Oz housing, and the balance to product rationalisation in the UK and competition in Spain.

At face value the broker suggests the outlook for the core US and John Guest businesses remains unchanged. Forecast earnings cut by -8%-12% in FY19-20 and target falls to $4.40 from $5.40. Outperform retained.

Target price is $4.40 Current Price is $3.63 Difference: $0.77
If RWC meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $4.83, suggesting upside of 33.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Deutsche Bank rates RWC as Hold (3) -

The company has downgraded FY19 earnings estimates by -7% to $260-270m. Performance across all operating segments has deteriorated, Deutsche Bank notes. The broker reduces estimates for FY19 to the lower end of guidance and reduces FY20 estimates by -6%.

Deutsche Bank remains concerned about inventory levels and the EMEA performance in the original businesses. Hold rating and $4.20 target.

Target price is $4.20 Current Price is $3.63 Difference: $0.57
If RWC meets the Deutsche Bank target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $4.83, suggesting upside of 33.0% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Macquarie rates RWC as Outperform (1) -

The company now expects FY19 operating earnings (EBITDA) of $260-270m. The downgrade to earnings guidance is a negative surprise for Macquarie and considered largely a consequence of the combined impact of not having a US freeze event and the more rapid slowdown in Australian trading conditions.

While the majority of the impact should be transitory, Macquarie notes the stock reaction was significant. Still, the valuation re-set offers an opportunity and the broker maintains an Outperform rating. Target is reduced to $5.90 from $6.20.

Target price is $5.90 Current Price is $3.63 Difference: $2.27
If RWC meets the Macquarie target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $4.83, suggesting upside of 33.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Morgans rates RWC as Downgrade to Hold from Add (3) -

The company's trading update disappointed Morgans, as FY19 underlying operating earnings (EBITDA) guidance was reduced by -7% to $260-270m. The main concern for the broker is that there are issues across all regions and the near-term outlook is uncertain.

US customers are reducing inventory, particularly in the retail channel, and there is a sharper-than-expected decline in Australian residential construction activity. Certain product lines have been exited in the UK and there is slower growth in Spain. The main positive is that John Guest integration remains on schedule.

The company will seek to mitigate the impact of US tariffs, which could negatively affect FY20 earnings, through customer price increases and/or negotiated supplier price reductions. US tariffs on imports from China are not expected to have a material impact on FY19 earnings.

Morgans downgrades to Hold from Add and reduces the target to $3.94 from $5.56.

Target price is $3.94 Current Price is $3.63 Difference: $0.31
If RWC meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.83, suggesting upside of 33.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Morgan Stanley rates SGM as Downgrade to Equal-weight from Overweight (3) -

Scrap prices in key markets have declined in the face of soft demand, Morgan Stanley observes. The stock is unlikely to outperform while this continues. Hence, the broker downgrades to Equal-weight from Overweight and lowers the target to $10.50 from $12.50.

Global scrap prices have declined from first quarter 2019 highs in all key markets. The broker continues to believe in the long-term opportunities for Sims Metal. Industry view is Cautious.

Target price is $10.50 Current Price is $9.32 Difference: $1.18
If SGM meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $11.58, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

UBS rates SYD as Downgrade to Sell from Neutral (5) -

UBS observes international traffic momentum was weak in the March quarter, even after taking into account the timing of Easter. Airline schedules now suggest capacity declines for the remainder of 2019.

The broker observes lower bond yields have also widened the gap between price and fundamentals. Ongoing traffic disappointment in 2019 has potential to drive underperformance and UBS downgrades to Sell from Neutral. Target is $7.

Target price is $7.00 Current Price is $7.78 Difference: minus $0.78 (current price is over target).
If SYD meets the UBS target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.09, suggesting downside of -8.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

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

Citi analysts, who are covering this stock from Europe, have downgraded to Sell from Neutral as further analysis has made them worried about asset values longer term. With online sales poised to take more market share in years ahead, the analysts believe values for shopping centres can potentially deflate by as much as -50%.

In addition, it has become clear to the analysts that retailers are using rent decline to maintain their margins in an attempt to please their shareholders. This smells like trouble, doesn't it? The analysts note the share price rallied recently, despite EPS forecasts actually declining. Target price falls to EUR125 from EUR142.

Current Price is $11.52. Target price not assessed.

Current consensus price target is $11.63, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

This company reports in EUR. 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