Australian Broker Call

UBS rates AMC as Neutral (3) -

Upon initial assessment, it seems Amcor's quarterly result has slightly beaten consensus and UBS's forecasts, with management reiterating FY23 EPS and free cashflow guidance.

The not so good insight is that today's minor beat is the result of a lower tax rate.

Demand up until December has remained "soft" on management's own description, though some volume improvements have come through in January, with management anticipating positive momentum is starting to build for a better H2.

Neutral. Target $15.40.

Target price is $15.40 Current Price is $14.32 Difference: $1.08
If AMC meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $15.48, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

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

Increased supply and slowing demand are starting to adversely impact margins in the A&NZ Auto Parts & Equipment space, cautions Citi. In particular, it's felt those companies exposed to new car sales are likely to encounter challenging operating conditions in 2024.

The broker's rating for Eagers Automotive is downgraded to Neutral from Buy due to downside risks should consensus estimates be revised down on a softer outlook for dealership margins.

The target falls to $13.25 from $17.90. The analysts feel profit (PBT) margins could be impacted by a raft of issues including greater discounting intensity across brands, increasing reliance on fleet sales and lower finance penetration.

Target price is $13.25 Current Price is $14.50 Difference: minus $1.25 (current price is over target).
If APE meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.11, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Citi rates ARB as Buy (1) -

Increased supply and slowing demand are starting to adversely impact margins in the A&NZ Auto Parts & Equipment space, cautions Citi. In particular, it's felt those companies exposed to new car sales are likely to encounter challenging operating conditions in 2024.

As the backlog of work at ARB Corp may take longer than originally expected to unwind (due to fitter constraints), the broker maintains a Buy rating. Offshore growth potential is also noted. The $35.18 target is also maintained.

Target price is $35.18 Current Price is $35.48 Difference: minus $0.3 (current price is over target).
If ARB meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.85, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates ARB as Hold (3) -

Largely due to sales growth in the SUV and Light Commercial Vehicle segments, explains Ord Minnett, Australian new vehicle sales increased by 5.8% in January, another record month for industry sales.

Sales within ARB Corp's key vehicle makes and models increased by 12.3% for the month.

The rate of industry sales growth was much lower than for recent months, and the analysts caution more modest growth may lie ahead, based on recent industry feedback.

The Hold rating and $36 target are unchanged.

Target price is $36.00 Current Price is $35.48 Difference: $0.52
If ARB meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $31.85, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates ASG as Buy (1) -

Increased supply and slowing demand are starting to adversely impact margins in the A&NZ Auto Parts & Equipment space, cautions Citi. In particular, it's felt those companies exposed to new car sales are likely to encounter challenging operating conditions in 2024.

As Autosports Group has both an undemanding valuation and greater exposure to the more resilient luxury segment, the broker maintains a Buy rating. 

Industry feedback is nonetheless incrementally negative for the group, given there are signs of OEMs “pushing” volumes, which is
negative for gross and profit margins, explains the analyst. The target is lowered to $3.10 from $3.45.

Target price is $3.10 Current Price is $2.38 Difference: $0.72
If ASG meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.10, suggesting upside of 30.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates BAP as Outperform (1) -

Bapcor's first half update revealed revenue -1% below Macquarie, earnings -3% and profit -8.5%. While management noted the 2H24 "Better then Before" (BTB) target remains on track, there was no comment regarding the FY25 target of more than $100m net earnings benefits.

The broker expects the targets will be reviewed by the incoming CEO and an update provided at the FY24 result.

Management changes increase risk around the near-term earnings outlook and medium-term BTB targets, Macquarie suggests, however the market had low confidence in delivery of BTB and expects a material rebase, in the broker's view.

Target falls to $6.12 from $7.58, Outperform retained.

Target price is $6.12 Current Price is $5.56 Difference: $0.56
If BAP meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $6.03, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Citi rates BWP as Sell (5) -

In an initial review of today's 1H results for BWP Trust, Citi highlights a slightly lower DPU than the consensus forecast, but management's FY24 guidance for 18.29cpu is in line with the broker's forecast. Overall, results were considered stable and in line with expectations.

The Trust's portfolio produced 5% like-for-like rental growth for the half, with a weighted average lease expiry (WALE) of 3.6 years, which the broker expects will increase in the wake of the proposed merger with Newmark Property REIT ((NPR)).

Sell rating. Target $3.40.

Target price is $3.40 Current Price is $3.35 Difference: $0.05
If BWP meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

UBS rates BWP as Sell (5) -

It is UBS's initial assessment BWP Trust's interim result has beaten expectations on better occupancy and 4.8% growth in rental income. UBS's forecast was for 3.5% growth.

The broker notes CPI tailwinds have contributed to today's "beat" as well.

UBS thinks the market will be focussed on the declining WALE (3.6yrs), inflation subsiding and, of course, the proposed acquisition of Newmark Property REIT (as per always presented as a "merger").

Sell Target $3.61.

Target price is $3.61 Current Price is $3.35 Difference: $0.26
If BWP meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

UBS rates CIP as Buy (1) -

Centuria Industrial REIT's interim result, on UBS's first assessment, has beaten expectations due to lower interest expenses. Funds from operations beat the broker's estimate by some 4%.

As per the broker's assessment, portfolio occupancy declined to 97.2% (98.0% Jun-23) and as did the WALE of 7.5yrs (7.7yrs Jun-23).

Management at the trust has upgraded FFO guidance to 17.c from 17c for FY24, while leaving dividend guidance unchanged at 16c.

UBS points out strong like-for-like rental growth (6%) is underpinning the FY24 guidance upgrade. The lower income from property is not seen as a problem given divestments are also included.

Target $3.71. Buy.

Target price is $3.71 Current Price is $3.31 Difference: $0.4
If CIP meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting upside of 0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Macquarie rates CSR as Neutral (3) -

CSR has settled a portion of the Horsley Park property sale sooner than expected. Lower development costs have also resulted in a higher earnings contribution from the sale, Macquarie notes, adding around $8m to prior expectations.

The impact on valuation is limited to the additional profit on the sale. The broker continues to apply a discount to the 'as is' value of the property portfolio given the uncertainties of redevelopment costs and timing associated with the realisation of the group's portfolio.

Macquarie retains Neutral, remaining concerned about slowing Australian residential activity, likely offset by property valuation potential and monetary policy relief. Target unchanged at $6.60.

Target price is $6.60 Current Price is $6.84 Difference: minus $0.24 (current price is over target).
If CSR meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.11, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

UBS rates CSR as Downgrade to Sell from Buy (5) -

UBS has downgraded to a Sell rating on CSR following the stock's share price performance, lifting 26% in the past six months. The broker considers the stock a high quality exposure to Australian residential housing, but believes risk now outweighs reward.

According to the broker, risk remains around near-term sales volumes, and it is unlikely soft housing and alterations and additions works will be offset by non-residential strength.

The broker does lift its full year earnings per share forecast 17% on the announced increased contracted property earnings. The rating is downgraded to Sell from Buy and the target price increases to $6.60 from $6.50.

Target price is $6.60 Current Price is $6.84 Difference: minus $0.24 (current price is over target).
If CSR meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.11, suggesting downside of -5.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

Bell Potter rates CYC as Buy (1) -

According to a trading update from Cyclopharm, revenues fell by -$2.5m in the second half of 2023. The company disclosed full year unaudited revenues of $28.9m, a modest miss to Bell Potter's $29.7m forecast, implying second half revenues of $13.2m.

Bell Potter explains the first half did benefit from large fees from third party logistics contracts, and while these are not one off they can differ from period to period.

The Technegas rollout continues, with eighty contracts issued, six of which are either executed or in final stages.

The broker anticipates a full year earnings loss of -$6m. The Buy rating is retained and the target price decreases to $3.80 from $4.25.

Target price is $3.80 Current Price is $1.76 Difference: $2.04
If CYC meets the Bell Potter target it will return approximately 116% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

UBS rates DEG as Buy (1) -

De Grey Mining continues to expand its gold operations, announcing its acquisition of Kalamazoo Resources' Ashburton resource, a 1.44m ounce gold project in the Pilbara.

As UBS notes, the move is part of De Grey Mining's strategy to further improve production from Hemi, with initial due diligence expected to consider an open pit that will deliver sulphide ore into a concentrate for trucking to Hemi for processing. 

The company will pay an upfront $3m option fee to Kalamazoo Resources, with De Grey Mining having up to eighteen months for due diligence, before electing to exercise for $15m upfront payment and a further $15m due within eighteen months.

The Buy rating and target price of $1.50 are retained.

Target price is $1.50 Current Price is $1.17 Difference: $0.33
If DEG meets the UBS target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $1.73, suggesting upside of 46.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Bell Potter rates DHG as Initiation of coverage with Buy (1) -

Bell Potter has initiated coverage on Australia's listed property portal leaders, Domain Holdings Australia and REA Group, ahead of what the broker believes will prove to be an improving operating market.

Both companies derive their primary earnings from new residential listings, but are also exposed to adjacent and supplementary revenue streams. Bell Potter expects new listings to lift from cyclical lows, and grow 3% year-on-year in FY24 and 5% in FY25, amid expected interest rate cuts.

The broker shows a preference for REA Group over Domain Holdings, but does see opportunity in the recent underperformance of the latter.

The broker initiates coverage with a Buy rating and a target price of $3.95.

Target price is $3.95 Current Price is $3.41 Difference: $0.54
If DHG meets the Bell Potter target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgans rates DXC as Add (1) -

Morgans assesses stable portfolio metrics within 1H results for Dexus Convenience Retail REIT. Funds from operations (FFO) of 10.5cpu compared to 11.3cpu for the previous corresponding period.

Property FFO was -5% lower compared to the previous corresponding period with like-for-like rental growth of 2.8% partly offsetting the impact of numerous divestments over the past 18 months, explains the analyst.

The broker's Add rating is maintained and the target slips to $3.23 from $3.28.

Target price is $3.23 Current Price is $2.68 Difference: $0.55
If DXC meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $3.01, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates EVT as Buy (1) -

While Ord Minnett lowers earnings forecasts for EVT Ltd leading into interim results, the broker sees limited medium-to longer-term risk for the Buy rating.

Box office numbers in the 2Q across Australia, New Zealand and Germany, the company's key markets, appear to have declined by more than -10%, compared to the previous corresponding period.

Target is reduced to $16.58 from $17.33.

Target price is $16.58 Current Price is $12.45 Difference: $4.13
If EVT meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

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

In disappointing news, suggests Morgan Stanley, Fletcher Building's Construction division will increase provisions again. The prior occasion was due to the recent plastic pipes claims.

This time, as a result of higher-than-expected subcontractor resources required to complete the NZICC project, the company will make a -NZ$165m provision in the 1H accounts.

Thankfully, the NZICC project still remains on track for late 2024 completion, note the analysts.

Morgan Stanley's Equal-weight rating and $5.23 target are retained. Industry View: In-Line.

This research was released yesterday by Morgan Stanley.

Target price is $5.23 Current Price is $3.95 Difference: $1.28
If FBU meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.37, suggesting upside of 36.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

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

Increased supply and slowing demand are starting to adversely impact margins in the A&NZ Auto Parts & Equipment space, cautions Citi. In particular, it's felt those companies exposed to new car sales are likely to encounter challenging operating conditions in 2024.

The broker downgrades its rating for G.U.D. Holdings to Neutral from Buy on lower car sales estimates, though the current valuation appears undemanding. Trading-down by customers and deferral of purchases are considered areas of concern.

The target falls to $12.90 from $13.57.

Target price is $12.90 Current Price is $12.33 Difference: $0.57
If GUD meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $13.08, suggesting upside of 8.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Bell Potter rates JAN as Buy (1) -

Janison Education has signed an agreement with the NSW Department of Education and Cambridge University Press to deliver selective education placement tests via a digital assessment platform, in addition to the paper-based versions the company already provides.

Janison Education will not only provide digital versions of the NSW Selective High School and Opportunity Class Placement Tests, but also manage test centres and invigilation, with tests administered to more than 30,000 students each year.

Bell Potter notes the agreement is expected to generate $45m in revenue over the initial five-year term, with a five-year extension option also on the table. Full roll out of the digital assessment platform is expected in 2025.

The Buy rating and target price of 55 cents are retained.

Target price is $0.55 Current Price is $0.38 Difference: $0.17
If JAN meets the Bell Potter target it will return approximately 45% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates JAN as Buy (1) -

Janison Education has announced a $45m contract win the the NSW Department of Education. Shaw and Partners describes the announcment as a "material contract win" that leverages the company's existing technology platform.

The agreement will see Janison support the state's selective education placement testing's, which around 30,000 students participate in annually, move to digital.

The broker explains it has not updated its forecasts, but this contract now largely underwrites its forecast revenue growth for Janison, which are now de-risked and offer upside potential.

The Buy rating and target price of 70 cents are retained.

Target price is $0.70 Current Price is $0.38 Difference: $0.32
If JAN meets the Shaw and Partners target it will return approximately 84% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgans rates MAP as Initiation of coverage with Speculative Buy (1) -

Morgans begins research coverage on Microba Life Sciences with a Speculative Buy rating and 35c target. The business operates within the microbiome industry and provides an end-to-end solution for gut health testing and therapeutic development.

The company utilises internally-developed tests and therapeutic candidates generated via its discovery engine and AI capabilities, explain the analysts. The therapeutics discovery platform produces high-margin products and opportunities, notes the broker.

Morgans highlights an increasing awareness among healthcare professionals about the pivotal role of the microbiome, which is driving a surge in demand for solutions.

Target price is $0.35 Current Price is $0.17 Difference: $0.185
If MAP meets the Morgans target it will return approximately 112% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates MFG as Sell (5) -

A $0.9bn increase for the Markets/Others divisions for Magellan Financial in January offset -$0.4bn in outflows, explains Citi, resulting in a $0.5bn increase for the group's funds under management (FUM).

The broker is pleased by a return to growth for Global Equities' FUM, up by $0.6bn, which is thought to be mainly driven by positive markets and favourable exchange rate movements.

The Sell rating and $8.10 target are maintained.

Target price is $8.10 Current Price is $9.06 Difference: minus $0.96 (current price is over target).
If MFG meets the Citi target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.55, suggesting downside of -6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Ord Minnett rates MYR as Hold (3) -

Following Myer's trading update, Ord Minnett observes slightly improving underlying sales momentum despite an increased cost of living weighing on customers.

The Hold rating and 75c target are unchanged after only marginal increases to the broker's sales and earnings forecasts.

The analyst believes high-demand levels for fashion items will normalise at the post-covid boom wanes, and cost of living pressures ultimately impact upon consumers.

Target price is $0.75 Current Price is $0.76 Difference: minus $0.01 (current price is over target).
If MYR meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates NCK as Outperform (1) -

Nick Scali's written sales gained momentum in the first half and into the second half, Macquarie notes, with the Dec Q up 8.2% and January up 3.6%. Higher gross margins and lower costs drove a 5% profit beat.

The broker expects store roll-out, Plush refurbishment and Plush store optimisation to continue to drive sales growth over the longer term.

Group sourcing benefits and lower freight should support strong margins in the near term, Macquarie suggests, supporting earnings upgrades. Target rises to $14.90 from $12.60, Outperform retained.

Target price is $14.90 Current Price is $14.00 Difference: $0.9
If NCK meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

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

Despite a less than compelling fundamental outlook, there has been a strong rally on the ASX for shares prices of non-banking financial institutions (NBFI) in the lead up to the results season, observes Citi. 

The broker points out this uplift for share prices is a replay of the past four reporting seasons, all of which have resulted in disappointment and retracement for share prices upon the released results. It's felt history may repeat.

While the rating for Pepper Money is downgraded to Neutral from Buy on valuation, Citi still believes shares are cheap relative to peers. Target $1.40.

This research was released yesterday by Citi.

Target price is $1.40 Current Price is $1.43 Difference: minus $0.025 (current price is over target).
If PPM meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Market Sentiment: 0.0

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

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

Increased supply and slowing demand are starting to adversely impact margins in the A&NZ Auto Parts & Equipment space, cautions Citi. In particular, it's felt those companies exposed to new car sales are likely to encounter challenging operating conditions in 2024.

The broker downgrades its rating for Peter Warren Automotive to Neutral from Buy and the target falls by -28% to $2.50 on lower earnings forecasts. The analyst also applies a greater relative valuation discount due to the company's geographic locations and smaller scale.

Target price is $2.50 Current Price is $2.46 Difference: $0.04
If PWR meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.15, suggesting upside of 24.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates REA as Initiation of coverage with Hold (3) -

Bell Potter has initiated coverage on Australia's listed property portal leaders, REA Group and Domain Holdings Australia, ahead of what the broker believes will prove to be an improving operating market.

Both companies derive their primary earnings from new residential listings, but are also exposed to adjacent and supplementary revenue streams. Bell Potter expects new listings to lift from cyclical lows, and grow 3% year-on-year in FY24 and 5% in FY25, amid expected interest rate cuts.

The broker shows a preference for REA Group over Domain Holdings, believing the former's premium is explained by its larger audience and higher probability of a near-term earnings upgrade.

The broker initiates coverage with a Hold rating and a target price of $179.00.

Target price is $179.00 Current Price is $180.72 Difference: minus $1.72 (current price is over target).
If REA meets the Bell Potter target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $164.86, suggesting downside of -10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates RGN as Buy (1) -

Citi assesses "relatively resilient" 1H results for Region Group, which were in line with consensus forecasts. It's thought a more stable underlying margin environment should translate into a return to growth in FY25 for funds from operations (FFO) and adjusted FFO.

The group remains a key recovery pick from within the broker's coverage, and the balance sheet is considered one of the most prudently valued in the sector.

The price target for Region Group remains $2.60, alongside a Buy rating. 

Target price is $2.60 Current Price is $2.24 Difference: $0.36
If RGN meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $2.44, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Macquarie rates RGN as Neutral (3) -

Region Group's first half earnings came in moderately below Macquarie, driven by higher interest expenses. FY24 funds from operations guidance is reaffirmed.

The adjusted funds from operations outlook has improved materially, the broker notes, driven by hedge restructuring at zero cost and suspension of the dividend reinvestment plan.

It was a solid result, Macquarie suggests, with the only key negative being slowing specialty sales growth. With a stronger AFFO outlook, the broker is more positive on Region, although valuation support relative to peers remains limited at a 6.5% FY25 yield.

Target rises to $2.30 from $2.23, Neutral retained.

Target price is $2.30 Current Price is $2.24 Difference: $0.06
If RGN meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.44, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

Region Group reported 1H funds from operations (FFO) of 7.6cps, broadly in line with Morgan Stanley's 7.7cps forecast. FY24 FFO guidance was maintained at 15.6pcu.

Sales growth has slowed on FY23, with discount department stores, specialties, and mini-majors all experiencing a pretty material deterioration in growth rate compared to FY23, explains the broker. Sales at supermarkets are up.

Management upgraded its long-term FFO/AFFO annual growth target to 3-4% from 2-4%. The possibility of a buyback was also flagged, should asset sales proceed, and if shares trade materially below the net tangible assets (NTA) measure for a sustained period.

The Equal-weight rating is maintained and the target rises to $2.35 from $2.30. Industry view: In-Line.

Target price is $2.35 Current Price is $2.24 Difference: $0.11
If RGN meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.44, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates RGN as Accumulate (2) -

Ord Minnett's FY24 adjusted funds from operations (AFFO) forecast for Region Group is unchanged following 1H results showing AFFO of 6.7cpu.

Given the group's relatively predictable income, and the current yield on Australian 10-year bonds, the broker suggests the REIT's dividend yield is, by comparison, attractive.

Average annual rent reviews of 3.9% are baked into Region's leases, up from 3.8%, driven by the average 4.3% achieved for new leases in the 1H, explains the analyst.

Accumulate rating maintained. Target is $2.55.

Target price is $2.55 Current Price is $2.24 Difference: $0.31
If RGN meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.44, suggesting upside of 8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Macquarie rates S32 as Neutral (3) -

Macquarie expects South32’s first half results to be weaker both year on year and half on half due to softer commodity prices and higher costs in the past six months.

The broker forecasts a 40c interim dividend, in line with the minimum payout policy, but notes it could go lower and shift distributions to the second half.

Free cash flow yields on Macquarie's forecasts and at spot prices are negative for FY24, which may constrain ability to fund new growth projects. Neutral and $3.10 target retained.

Target price is $3.10 Current Price is $3.14 Difference: minus $0.04 (current price is over target).
If S32 meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.82, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Citi rates TWE as Neutral (3) -

Citi notes January Nielsen data (released overnight) show a retail sales recovery for Treasury Wine Estates' recently-acquired Frank Family Vineyards in the US.

Sales for the Frank business grew by 30% compared to the -12% decline in December.

The broker cautions this data, while worth tracking, does not cover on-premise trends, which are more relevant for luxury wines.

The analyst's Neutral rating is retained until the pending China tariff review and further evidence of improvement in trading conditions across key markets. Target $11.00.

Target price is $11.00 Current Price is $10.94 Difference: $0.06
If TWE meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $13.07, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates VUK as Outperform (1) -

Virgin Money UK's Dec Q trading update was broadly in line with market expectations, Macquarie notes. Contained cost growth offset softer margins and volume growth.

The broker has reduced its 2H24 impairment expenses assumption and Virgin expects to release some credit card provisions as its current approach appears more conservative than peers.

The outlook for the UK economy has incrementally improved in recent months, Macquarie notes, with headline inflation numbers continuing to decline. The broker continues to see valuation appeal on an absolute and relative basis, to both the UK market and UK
peers.

Outperform retained, target rises to $3.70 from $3.45.

Target price is $3.70 Current Price is $2.95 Difference: $0.75
If VUK meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $3.85, suggesting upside of 24.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Macquarie rates WAF as Outperform (1) -

West African Resources' Sanbrado mine is guided to produce 200koz, in line with Macquarie's expectation, at a cost of less than US$1,300/oz, compared to the broker's prior US$1,022/oz forecast for 2024.

The company expects to spend some US$250m on Kiaka's development in 2024, which is a higher rate of spend than the broker previously estimated.

West African's upcoming ten-year production plan remains a key near-term catalyst. Outperform retained, target falls to $1.40 from $1.60.

Target price is $1.40 Current Price is $0.84 Difference: $0.56
If WAF meets the Macquarie target it will return approximately 67% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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