Australian Broker Call
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December 11, 2018
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
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Today's Upgrades and Downgrades
ABC - | ADELAIDE BRIGHTON | Upgrade to Outperform from Neutral | Credit Suisse |
ING - | INGHAMS GROUP | Upgrade to Equal-weight from Underweight | Morgan Stanley |
ABC ADELAIDE BRIGHTON LIMITED
Building Products & Services
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Overnight Price: $4.35
Credit Suisse rates ABC as Upgrade to Outperform from Neutral (1) -
The company has cited volume weakness in its downgrade to 2018 guidance. Credit Suisse models a partial recovery, excluding WA where the outlook is more uncertain.
The broker expects volumes to grow in 2019, amid strong price outcomes and upgrades to Outperform from Neutral. Target is reduced to $5.30 from $6.56.
The broker notes WA is establishing as a major processor of lithium hydroxide, ex China. Lime is a key input in the production of this substance, which is used in batteries.
The broker calculates that initial projects will require more than 50,000t of lime, approximately 5% of total WA use, and this could well prove to be a substantial new long-term market for the company.
Target price is $5.30 Current Price is $4.35 Difference: $0.95
If ABC meets the Credit Suisse target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $5.01, suggesting upside of 15.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 21.00 cents and EPS of 29.38 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.5, implying annual growth of 5.4%. Current consensus DPS estimate is 27.5, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 22.00 cents and EPS of 32.84 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.2, implying annual growth of 9.2%. Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $24.77
Citi rates ANZ as Buy (1) -
The action by APRA against IOOF ((IFL)) to impose certain licence conditions as well as disqualify key executives has significantly reduce the probability that ANZ's sale of its pensions & investments business will be completed.
The broker suggests ANZ needs this sale more than the market contemplates, although the implications are minimal as pensions & investments is less than 1% of earnings.
Still, there are no obvious alternative buyers at the current price and completion of the dealer group sale in October has rendered the asset significantly less attractive now.
The broker suspects, given the strategic imperatives to get the deal completed, both parties are likely to adopt renewed vigour in sorting out the issues. Buy and a $30.50 target maintained.
Target price is $30.50 Current Price is $24.77 Difference: $5.73
If ANZ meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $29.06, suggesting upside of 17.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 160.00 cents and EPS of 229.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 232.2, implying annual growth of 4.8%. Current consensus DPS estimate is 160.7, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 10.7. |
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 166.00 cents and EPS of 235.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 245.6, implying annual growth of 5.8%. Current consensus DPS estimate is 164.6, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 10.1. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
AZJ AURIZON HOLDINGS LIMITED
Transportation & Logistics
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Overnight Price: $4.37
Morgans rates AZJ as Hold (3) -
Morgans suggests the bad news from the UT5 decision is that earnings and dividends are likely to decline by a material amount over coming years. The good news is that the Queensland Competition Authority has provided larger revenue allowances versus prior expectations.
Besides the Federal Court proceedings relating to Acacia Ridge, coal haulage contract negotiations are also key catalysts, as they could provide an opportunity for the company to snare volume from Pacific National.
Morgans maintains a Hold rating and raises the target to $4.34 from $4.30.
Target price is $4.34 Current Price is $4.37 Difference: minus $0.03 (current price is over target).
If AZJ meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.30, suggesting downside of -1.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgans forecasts a full year FY19 dividend of 26.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.7, implying annual growth of -8.2%. Current consensus DPS estimate is 23.4, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 17.7. |
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 23.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.5, implying annual growth of -13.0%. Current consensus DPS estimate is 21.1, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 20.3. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BHP as Outperform (1) -
Macquarie assesses the exposure to oil after the sale of US shale assets. Oil exposure has fallen to around 20% of EBITDA. A 10% increase in oil prices translates to 2-3% increases in earnings forecasts for the company.
Exploration offers the potential for medium-term upside while additional capital management could boost returns to US$20bn in FY19, in the broker's view. Outperform maintained. Target is steady at $40.
Target price is $40.00 Current Price is $31.63 Difference: $8.37
If BHP meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $37.02, suggesting upside of 17.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 310.25 cents and EPS of 249.13 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 266.7, implying annual growth of N/A. Current consensus DPS estimate is 258.9, implying a prospective dividend yield of 8.2%. Current consensus EPS estimate suggests the PER is 11.9. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 159.79 cents and EPS of 227.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 253.9, implying annual growth of -4.8%. Current consensus DPS estimate is 195.6, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 12.5. |
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
Overnight Price: $9.57
Morgan Stanley rates BOQ as Underweight (5) -
Bank of Queensland is no longer proceeding with the sale of St Andrews Insurance to Freedom Insurance and will continue to assess strategic options.
Morgan Stanley had suspected there was a risk the sale would not proceed. Any capital management initiatives, with a buyback slated by the broker at around $65m for the first half of FY20, are contingent on a sale eventually proceeding.
Underweight maintained. Target is $9.50. In-Line industry view retained.
Target price is $9.50 Current Price is $9.57 Difference: minus $0.07 (current price is over target).
If BOQ meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.64, suggesting upside of 11.2% (ex-dividends)
The company's fiscal year ends in August.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 76.00 cents and EPS of 87.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.7, implying annual growth of -6.3%. Current consensus DPS estimate is 76.1, implying a prospective dividend yield of 8.0%. Current consensus EPS estimate suggests the PER is 10.8. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 76.00 cents and EPS of 86.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.5, implying annual growth of -2.5%. Current consensus DPS estimate is 76.0, implying a prospective dividend yield of 7.9%. Current consensus EPS estimate suggests the PER is 11.1. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates BOQ as Hold (3) -
Bank of Queensland has terminated the agreement to sell St Andrews Insurance to Freedom Insurance. Ord Minnett believes, since Freedom Insurance appeared before the Hayne Royal Commission, the deal has looked increasingly at risk.
Removal of the sale from estimates has resulted in an increase in FY20-21 diluted estimates for earnings per share of around 3%. The broker also removes special dividends and the discount on the bank's dividend reinvestment plan from its estimates.
Hold rating and $10.60 target maintained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $10.60 Current Price is $9.57 Difference: $1.03
If BOQ meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $10.64, suggesting upside of 11.2% (ex-dividends)
The company's fiscal year ends in August.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 76.00 cents and EPS of 89.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.7, implying annual growth of -6.3%. Current consensus DPS estimate is 76.1, implying a prospective dividend yield of 8.0%. Current consensus EPS estimate suggests the PER is 10.8. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 76.00 cents and EPS of 90.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 86.5, implying annual growth of -2.5%. Current consensus DPS estimate is 76.0, implying a prospective dividend yield of 7.9%. Current consensus EPS estimate suggests the PER is 11.1. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $11.46
Ord Minnett rates BSL as Accumulate (2) -
Ord Minnett makes changes to its model, to incorporate the AGM update and marking to market prices, and continues to believe BlueScope Steel is significantly undervalued.
Based on the broker's estimates the company will generate 70-86% of its present market capitalisation in free cash flow over a five-year investment period.
The broker maintains an Accumulate rating and raises the target to $20.70 from $20.50.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $20.70 Current Price is $11.46 Difference: $9.24
If BSL meets the Ord Minnett target it will return approximately 81% (excluding dividends, fees and charges).
Current consensus price target is $17.19, suggesting upside of 50.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 16.00 cents and EPS of 283.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 205.1, implying annual growth of 38.3%. Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 5.6. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 16.00 cents and EPS of 203.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 164.0, implying annual growth of -20.0%. Current consensus DPS estimate is 16.5, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 7.0. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
COL COLES GROUP LIMITED
Food, Beverages & Tobacco
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Overnight Price: $12.37
Macquarie rates COL as Neutral (3) -
Macquarie observes considerable conjecture about what PE multiples are appropriate for Coles relative to Woolworths ((WOW)). Coles is trading on 16.3x FY20 earnings per share while Woolworths is at 20.9x.
Yet, the broker points out, there is significant variance for the two businesses, as Woolworths still owns loss-making Big W and petrol is excluded from continuing EPS.
Macquarie believes Woolworths should trade at a premium but acknowledges the variance still appears too wide after adjustments.
The broker believes Coles, despite a recent re-rate, remains reasonable value. Neutral rating and $13.48 target.
Target price is $13.48 Current Price is $12.37 Difference: $1.11
If COL meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $13.02, suggesting upside of 5.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 65.70 cents and EPS of 77.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 72.2, implying annual growth of N/A. Current consensus DPS estimate is 41.0, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 17.1. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 67.60 cents and EPS of 79.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.5, implying annual growth of 4.6%. Current consensus DPS estimate is 63.9, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DHG DOMAIN HOLDINGS AUSTRALIA LIMITED
Real Estate
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Overnight Price: $2.44
Macquarie rates DHG as Resume Coverage with Outperform (1) -
Macquarie resumes coverage with an Outperform rating and $3 target. The broker believes FY19 earnings are under pressure because of declines in listing volumes in key markets, notably Sydney.
Volume trends are expected to stabilise over the next 12 months and may reverse, providing a tailwind to growth, the broker suggests.
Given the investment to date, the broker envisages cost growth ex transactions will be contained at low-mid single digits in the medium term.
Target price is $3.00 Current Price is $2.44 Difference: $0.56
If DHG meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $3.02, suggesting upside of 23.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 8.00 cents and EPS of 8.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.4, implying annual growth of N/A. Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 29.0. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 8.00 cents and EPS of 10.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.5, implying annual growth of 25.0%. Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 23.2. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.14
Deutsche Bank rates FMG as Sell (5) -
Deutsche Bank, after a site visit, highlights the re-working of the company's 67% iron magnetite project, which could be the next step to achieving a majority of tonnage at 60% or more.
This could be a potential game changer for the company, in the broker's view, if it can be shown that blending with lower grade ore is possible and accretive to value.
Sell rating and $3.70 target maintained.
Target price is $3.70 Current Price is $4.14 Difference: minus $0.44 (current price is over target).
If FMG meets the Deutsche Bank target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.59, suggesting upside of 10.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Current consensus EPS estimate is 45.3, implying annual growth of N/A. Current consensus DPS estimate is 29.5, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 9.1. |
Forecast for FY20:
Current consensus EPS estimate is 42.9, implying annual growth of -5.3%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 9.7. |
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
ING INGHAMS GROUP LIMITED
Food, Beverages & Tobacco
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Overnight Price: $4.30
Morgan Stanley rates ING as Upgrade to Equal-weight from Underweight (3) -
To reflect a stronger pricing environment and further cost cutting potential, Morgan Stanley upgrades estimates for earnings per share by 1-6% across FY19-21. The supply contract for Woolworths ((WOW)) remains the largest risk, in the broker's opinion.
Near-term profitability is expected to be supported by ownership changes at NZ competitor, Tegel, leading to a more rational market and margin expansion from FY20, as well as further automation of production processes.
Rating is upgraded to Equal-weight from Underweight. Target is raised to $4.40 from $3.40. Industry view: Cautious.
Target price is $4.40 Current Price is $4.30 Difference: $0.1
If ING meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $3.88, suggesting downside of -9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 20.80 cents and EPS of 29.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.6, implying annual growth of -7.2%. Current consensus DPS estimate is 25.2, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 15.0. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 22.40 cents and EPS of 32.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.8, implying annual growth of 7.7%. Current consensus DPS estimate is 21.0, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 14.0. |
Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.55
Ord Minnett rates IPL as Buy (1) -
Ord Minnett updates its modelling to allow for the gas supply issues affecting Gibson Island, Phosphate Hill and St Helens.
Updated fertiliser prices and other cost assumptions offset the increased costs resulting from the delays. The broker maintains a Buy rating and $4.20 target.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $4.20 Current Price is $3.55 Difference: $0.65
If IPL meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $4.20, suggesting upside of 18.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 13.00 cents and EPS of 25.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.2, implying annual growth of 101.6%. Current consensus DPS estimate is 13.2, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.1. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 14.00 cents and EPS of 26.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.9, implying annual growth of 2.8%. Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 13.7. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
KDR KIDMAN RESOURCES LIMITED
New Battery Elements
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Overnight Price: $1.36
Ord Minnett rates KDR as Buy (1) -
Kidman Resources has settled with objectors to its application regarding tenements at the Mount Holland lithium project in Western Australia.
Ord Minnett considers this is a major hurdle that has been cleared as the company could have lost control of its mining tenements.
The settlement will also trigger US$85m in outstanding milestone payments to the joint venture. Kidman now has ability to commit to the project and fund early-stage expenditures.
A definitive feasibility study and final investment decision are the key catalysts over the next three months.
Speculative Buy rating maintained and the target is $2.80.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $2.80 Current Price is $1.36 Difference: $1.44
If KDR meets the Ord Minnett target it will return approximately 106% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 2.00 cents. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of minus 4.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NEC NINE ENTERTAINMENT CO. HOLDINGS LIMITED
Print, Radio & TV
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Overnight Price: $1.53
Macquarie rates NEC as Resume Coverage with Outperform (1) -
Macquarie resumes coverage with an Outperform rating and $2.20 target. The broker observes the newly merged business is primarily leveraged to growth in Domain ((DHG)), value creation at Stan, transaction synergies and the cash generated from TV.
The broker believes, overall, the merger with Fairfax is positive as there is scope to accelerate Domain and capture synergies. The main concern is the risk that a broader asset mix sustains a conglomerate discount.
Target price is $2.20 Current Price is $1.53 Difference: $0.67
If NEC meets the Macquarie target it will return approximately 44% (excluding dividends, fees and charges).
Current consensus price target is $2.15, suggesting upside of 40.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 12.80 cents and EPS of 19.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.9, implying annual growth of -29.6%. Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 9.1. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 14.60 cents and EPS of 18.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.6, implying annual growth of -1.8%. Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 9.2. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PTM PLATINUM ASSET MANAGEMENT LIMITED
Wealth Management & Investments
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Overnight Price: $4.88
Morgan Stanley rates PTM as Equal-weight (3) -
Morgan Stanley estimates -$30m net outflows in November, the first monthly outflows since June 2017. This could relate to a slowing investment performance and recent market volatility.
The broker suggests there is a risk outflows could deteriorate further. Equal-weight retained. Industry view: In-Line. Target is $6.
Target price is $6.00 Current Price is $4.88 Difference: $1.12
If PTM meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $5.22, suggesting upside of 6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 28.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.1, implying annual growth of -8.6%. Current consensus DPS estimate is 28.8, implying a prospective dividend yield of 5.9%. Current consensus EPS estimate suggests the PER is 16.2. |
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 EPS of 33.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.7, implying annual growth of 5.3%. Current consensus DPS estimate is 30.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 15.4. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.90
Citi rates QMS as Buy (1) -
The company will merge its NZ business with MediaWorks to create one of New Zealand's largest media companies. In return, QMS Media will receive $35m in cash and maintain a 40% holding in the combined group.
Oaktree Capital Management will own the remainder. The main assets are radio, TV and digital media. Citi has a mixed response to the transaction but believes the value the company is receiving is positive.
The broker still likes the business as an attractive way to play the structural growth in outdoor media but the lack of disclosure and dilution of the outdoor media interest in this deal is a slight negative. Buy rating retained. Target is $1.40.
Target price is $1.40 Current Price is $0.90 Difference: $0.5
If QMS meets the Citi target it will return approximately 56% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 2.40 cents and EPS of 5.60 cents. |
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 3.10 cents and EPS of 6.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates SCG as Sell (5) -
Citi believes the development pipeline, which contributes around 1/4 of earnings growth, is the key driver of quality in the portfolio.
The broker believes development returns will continue to trend lower as the cost of adding new space has doubled. Shopping centre space continues to grow at around 2% per annum while at the same time the roll-out by retailers is slowing, making it harder to fill.
The broker expects the environment for development to remain challenging and reiterates a Sell rating, noting this is a lonely view. Target is reduced to $3.66 from $3.96.
Target price is $3.66 Current Price is $4.03 Difference: minus $0.37 (current price is over target).
If SCG 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 $4.33, suggesting upside of 7.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 22.20 cents and EPS of 25.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.2, implying annual growth of 1033.3%. Current consensus DPS estimate is 22.2, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 14.8. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 22.60 cents and EPS of 25.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.4, implying annual growth of -6.6%. Current consensus DPS estimate is 22.9, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 15.9. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.78
Ord Minnett rates SKO as Initiation of coverage with Hold (3) -
Ord Minnett believes the company has the opportunity to benefit from the biggest change happening in the travel agency landscape in the last 50 years, new distribution capability (NDC).
The broker attempts to capture the potential value of large contract gains in the US by attaching a 40% probability weighting to success in this market for the company's Zeno product.
The broker estimates Serko has 50% of market share in bookings conducted via online booking tools in the business/corporate travel segment in Australasia, which should grow to around 70% in coming years.
Ord Minnett takes up coverage with a Hold rating and $3 target.
Target price is $3.00 Current Price is $2.78 Difference: $0.22
If SKO meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).
The company's fiscal year ends in March.
Forecast for FY19:
Ord Minnett forecasts a full year FY19 dividend of 0.00 cents and EPS of 2.22 cents. |
Forecast for FY20:
Ord Minnett forecasts a full year FY20 dividend of 0.00 cents and EPS of 2.40 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TLS TELSTRA CORPORATION LIMITED
Telecommunication
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Overnight Price: $3.07
UBS rates TLS as Neutral (3) -
The 3.6GHz auction was in line with expectations although UBS observes regional prices were higher. Telstra won the most, with 143 lots for $386m. Dense Air was a surprise bidder, winning 29 lots. NBNCo was unable to bid except in regional WA.
The licences will begin March 2020. Telstra was able to pick up its full quota of metro holdings and close to its full quota of regional holdings. UBS has assumed Telstra will spend $1bn for 3.6GHz, 900MHz and 26GHz in total and leaves forecasts unchanged.
Neutral rating and $3 target maintained.
Target price is $3.00 Current Price is $3.07 Difference: minus $0.07 (current price is over target).
If TLS meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $3.11, suggesting upside of 1.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 16.00 cents and EPS of 20.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.7, implying annual growth of -41.0%. Current consensus DPS estimate is 16.8, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 17.3. |
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 16.00 cents and EPS of 21.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.1, implying annual growth of -3.4%. Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 18.0. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
Company | Broker | New Target | Prev Target | Change | |
ABC | ADELAIDE BRIGHTON | Credit Suisse | 5.30 | 6.60 | -19.70% |
AZJ | AURIZON HOLDINGS | Morgans | 4.34 | 4.30 | 0.93% |
BSL | BLUESCOPE STEEL | Ord Minnett | 20.70 | 20.50 | 0.98% |
DHG | DOMAIN HOLDINGS | Macquarie | 3.00 | N/A | - |
ING | INGHAMS GROUP | Morgan Stanley | 4.40 | 3.40 | 29.41% |
NEC | NINE ENTERTAINMENT | Macquarie | 2.20 | N/A | - |
SCG | SCENTRE GROUP | Citi | 3.66 | 4.11 | -10.95% |
Summaries
ABC | ADELAIDE BRIGHTON | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $4.35 |
ANZ | ANZ BANKING GROUP | Buy - Citi | Overnight Price $24.77 |
AZJ | AURIZON HOLDINGS | Hold - Morgans | Overnight Price $4.37 |
BHP | BHP | Outperform - Macquarie | Overnight Price $31.63 |
BOQ | BANK OF QUEENSLAND | Underweight - Morgan Stanley | Overnight Price $9.57 |
Hold - Ord Minnett | Overnight Price $9.57 | ||
BSL | BLUESCOPE STEEL | Accumulate - Ord Minnett | Overnight Price $11.46 |
COL | COLES GROUP | Neutral - Macquarie | Overnight Price $12.37 |
DHG | DOMAIN HOLDINGS | Resume Coverage with Outperform - Macquarie | Overnight Price $2.44 |
FMG | FORTESCUE | Sell - Deutsche Bank | Overnight Price $4.14 |
ING | INGHAMS GROUP | Upgrade to Equal-weight from Underweight - Morgan Stanley | Overnight Price $4.30 |
IPL | INCITEC PIVOT | Buy - Ord Minnett | Overnight Price $3.55 |
KDR | KIDMAN RESOURCES | Buy - Ord Minnett | Overnight Price $1.36 |
NEC | NINE ENTERTAINMENT | Resume Coverage with Outperform - Macquarie | Overnight Price $1.53 |
PTM | PLATINUM | Equal-weight - Morgan Stanley | Overnight Price $4.88 |
QMS | QMS MEDIA | Buy - Citi | Overnight Price $0.90 |
SCG | SCENTRE GROUP | Sell - Citi | Overnight Price $4.03 |
SKO | SERKO | Initiation of coverage with Hold - Ord Minnett | Overnight Price $2.78 |
TLS | TELSTRA CORP | Neutral - UBS | Overnight Price $3.07 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 8 |
2. Accumulate | 1 |
3. Hold | 7 |
5. Sell | 3 |
Tuesday 11 December 2018
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