Australian Broker Call

Morgans rates ALX as Upgrade to Add from Hold (1) -

Third quarter traffic and revenue declined -2.7% and -1.9%, respectively, which was 2% ahead of Morgans forecast. Traffic is considered to have benefited from the relaxation of covid-19 restrictions from May-July. Also the start of the summer holiday season assisted. 

However, signs for a continuing recovery into the fourth quarter are not good, according to the broker. Atlantia’s Abertis French toll road network, which releases weekly data that has correlated closely with the APRR’s performance (in Eastern France), has seen traffic deteriorate since peaking in August.

Traffic was down around -10% in the first week of October and the analyst is concerned that daily new cases of covid-19 in France have been growing rapidly.

Morgans base case assumes the APRR’s traffic returns to trend growth by FY22, despite downgrades to short-term expectations. 

At current prices, the broker estimates a 12-month potential total shareholder return of 19%. The rating is upgraded to Add from Hold and the target price is increased to $7.01 from $6.83.

Target price is $7.01 Current Price is $6.23 Difference: $0.78
If ALX meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.06, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

UBS rates BEN as Neutral (3) -

Bendigo and Adelaide Bank misclassified some deposits for the purpose of calculating its liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).

APRA deems these misclassifications to be "material" and will be taking action against the bank. The bank will be required to add an additional 10% to its net cash outflow assumptions.

UBS indicates the bank's current liquidity position is strong with an LCR of 167.7% (well in excess of APRA's minimum requirement of 100%) and this step will not impact the bank's liquidity position.

On the flip side, the bank has a lower pre-provision profit on risk-weighted assets than peers which leaves it leveraged to changes in net interest margin and asset quality. Due to the bank's overweight exposure to both Victoria and SMEs, UBS believes the next year is likely to remain challenging.

UBS retains its Neutral rating with a target price of $6.50.

Target price is $6.50 Current Price is $6.75 Difference: minus $0.25 (current price is over target).
If BEN 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 $7.49, suggesting upside of 15.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

UBS rates CLV as Neutral (3) -

Clover Corp guided to a first-half revenue decline of -15-25% (year on year) led by reduced order demand over the last circa 5 weeks. UBS notes this guidance also compares to year to date orders till September 18 tracking almost flat.

In the medium-term, UBS is constructive on Clover Corp due to tailwinds related to its products, opportunities from new products and a sound balance sheet.

While UBS remains constructive on the company's medium-term market opportunity, the broker retains its Neutral rating given the near-term earnings uncertainty. Target price declines to $2.10 from $2.30.

Target price is $2.10 Current Price is $1.75 Difference: $0.35
If CLV meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates COL as Downgrade to Neutral from Outperform (3) -

Macquarie rejigs its order of preference in the Australian supermarket sector. Strong volumes have been maintained but internet sales and the shopping local theme both favour Woolworths ((WOW)) and Metcash ((MTS)) over Coles.

The broker notes the Coles Little Treehouse Books campaign has not resonated strongly with customers compared with the more successful Ooshies campaign at Woolworths.

Rating is downgraded to Neutral from Outperform and the target is reduced to $18.70 from $19.80.

Target price is $18.70 Current Price is $17.51 Difference: $1.19
If COL meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $19.34, suggesting upside of 11.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Credit Suisse rates CRN as Outperform (1) -

Credit Suisse was pleased with the strong September quarter numbers and now assumes the top end of guidance will be met. The broker notes negative sentiment regarding metallurgical coal prices has sent spot back under US$120/t.

Nevertheless, with the recent capital raising and the scrapping of dividends Credit Suisse assesses Coronado Global is an opportunity for those investors willing to take a longer view and allow prices to improve. Outperform rating and $1.60 target maintained.

Target price is $1.60 Current Price is $0.85 Difference: $0.75
If CRN meets the Credit Suisse target it will return approximately 88% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting upside of 67.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 1.0

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

Morgans rates CRN as Add (1) -

A strong third quarter progresses the balance sheet turnaround story of Coronado Global Resources, highlights Morgans.

The key takeaway for the broker was record saleable production/sales from Curragh, which drove third quarter revenue 12% above the analyst's forecast. Group sales volumes, which were 12% above the broker's forecast were key and offset weak met coal prices (-6% below forecast) in the third quarter.

Should coal prices stagnate, Morgans believe the less geared balance sheet, further capital release and bank co-operation provides over 12 months of protection.

The company's risk-reward proposition remains compelling, particularly as the broker thinks fears around Chinese met coal buying behaviour will abate.

The Add rating is unchanged and the target price is increased to $1.31 from $1.30.

Target price is $1.31 Current Price is $0.85 Difference: $0.46
If CRN meets the Morgans target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting upside of 67.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 1.0

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

UBS rates CRN as Buy (1) -

Coronado Global Resources' third-quarter performance was strong, observes UBS, with production and sales up 31% and 29% (sequentially), beating the broker's forecasts.

UBS suggests the strong result is reflective of a demand recovery in regions excluding China and was driven by Curragh. Sales and production also increased at Buchanan and Logan in the US. Production guidance remains unchanged at 16.5-17mt.

The met coal market is beginning to improve, notes UBS, with China re-entering the market and ex-China demand lifting. The news around China suspending imports from Australia does not perturb Coronado Global since China is not a key export market for its production.

There is, however, downside risk to the met coal price should China continue to restrict Australian coal imports. UBS retains its Buy rating with a target of $1.30.

Target price is $1.30 Current Price is $0.85 Difference: $0.45
If CRN meets the UBS target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $1.40, suggesting upside of 67.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 1.0

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

Credit Suisse rates CSL as Outperform (1) -

A slow recovery in plasma collections is expected to affect FY22 earnings. CSL is now advertising that new donors could be compensated by up to US$700/month. Credit Suisse assumes FY21 collections are flat.

Second half collections should benefit from new plasma centres. The broker suspects CSL will try to phase its inventory draw to ensure a more stable supply of immunoglobulin. Outperform rating maintained. Target is reduced to $325 from $330.

Target price is $325.00 Current Price is $297.12 Difference: $27.88
If CSL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $309.96, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Credit Suisse rates DXS as Outperform (1) -

Dexus Property Group is now guiding to an FY21 result that is consistent with FY20. The main caveat is that there are no further lockdowns or unforeseen events. Credit Suisse maintains FY21 expectations for a distribution of 50.4c, broadly in line with guidance.

The broker suspects the company is not yet in a position to accurately quantify the full year outlook in terms of rent relief, but presumably has allowed for the contingency.

Credit Suisse suspects many investors are wary of the structural outlook for office because of the rise in working from home, but envisages development should help limit new supply and allow competitive tension to return over time. Outperform retained. Target is $9.92.

Target price is $9.92 Current Price is $9.28 Difference: $0.64
If DXS meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $9.41, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates DXS as Neutral (3) -

Distribution guidance of 50.3c for FY21 is ahead of expectations and will reflect 100% of free cash flow. Macquarie also observes FY22 will be affected in a positive way by the rolling off of rental assistance, although partially offset by divestments.

Offsetting strength, the broker expects office leasing markets will be challenging and affect cash flow via an increase in incentives. Neutral rating maintained. Target rises to $9.05 from $8.80.

Target price is $9.05 Current Price is $9.28 Difference: minus $0.23 (current price is over target).
If DXS 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 $9.41, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates DXS as Underweight (5) -

Dexus Property Group's first-quarter update also includes dividend guidance of 50.3c, ahead of Morgan Stanley's estimated 46.3c as well as consensus estimates.

In the September quarter, Dexus' office occupancy declined to 95.4% from 96.5% in the June quarter. Office incentives were 16.8% and rent collection across the portfolio was 94%, up from 92% in the June quarter.  

The broker reaffirms its Underweight rating with the target price unchanged at $8.15. Industry View: In-line.

Target price is $8.15 Current Price is $9.28 Difference: minus $1.13 (current price is over target).
If DXS meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.41, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates DXS as Buy (1) -

Dexus Property Group's distribution guidance of 50.3c is circa 11% ahead of UBS's forecast. Since the company's distributions are based on its free cash flow, the broker thinks this implies better than expected operating performance.

In the first quarter, Dexus leased circa 54ksqm of office, materially up from the negligible amount leased in the previous quarter. Furthermore, incentives were 24% (excluding the lease deal in Parramatta). The broker expects the group will outperform the broader market.

While the market is extremely cautious on office due to a cyclical economic downturn and emerging structural headwinds, the broker notes Dexus has shown the leasing market is still active.

UBS retains its Buy rating with the target rising to $10.59 from $10.47.

Target price is $10.59 Current Price is $9.28 Difference: $1.31
If DXS meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.41, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates EBO as Add (1) -

The Ebos Group posted a strong first quarter result, according to Morgans. The broker notes the company is looking to expand further its medical device business following two recent acquisitions.

Management  advised revenue and profit growth should not be annualised given the uncertain environment and no FY21 guidance was provided. However, the company did advise the dividend policy of paying out at least 60% of profit (NPAT) would be maintained, notes the broker.

The analyst upgrades forecasts  modestly and a lower cost of capital assumption results in an increase in  target price to $25.94 (from $24.58).

The Add rating is maintained with the company offering solid yield and consistent earnings growth, according to the broker.

Target price is $25.94 Current Price is $24.06 Difference: $1.88
If EBO meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $24.97, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Morgan Stanley rates ELO as Overweight (1) -

Elmo Software paid $32.4m for the acquisition of the UK based HR platform - Breathe. Elmo reiterated its organic guidance at the AGM and updated its financials to incorporate an annual recurring revenue of $7.5-$8.5m.

The broker notes there are concerns around the company's M&A strategy but sees the reaffirmation of organic growth guidance a key positive. 

The company plans to report Breathe financial separately from its organic business which will provide a clearer understanding of what is delivered by Breathe. The broker believes Elmo can upsell Breathe's core HR platform with other modules and can take Breathe into new markets like ANZ.

Morgan Stanley reaffirms its Overweight rating with the target price rising to $9.30 from $9. Industry view: In-line.

Target price is $9.30 Current Price is $5.58 Difference: $3.72
If ELO meets the Morgan Stanley target it will return approximately 67% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates EOF as Buy (1) -

Ecofibre has declared revenue of $7.1m in the first quarter, broadly similar to the prior quarter. A loss is expected in the first half followed by recovery in the second half, allowing the potential for a break-even result.

Ord Minnett is not surprised by the outcome in the September quarter, given the upheaval in the broader US economy. The broker is unmoved in terms of its conviction regarding the company's market-leading product, strong partnerships and growth opportunities.

Buy rating retained. Estimates are re-based and the target is reduced to $2.26 from $3.20.

Target price is $2.60 Current Price is $1.83 Difference: $0.77
If EOF meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Citi rates ILU as Neutral (3) -

Citi highlights the listing day for Deterra is on October 23. Deterra shares will be distributed to Iluka shareholders and commence trading on ASX on a deferred settlement basis with normal trading commencing on November 2.

If Deterra were to trade in line with Citi's MAC royalty valuation then it would trade at $3/share, implying a post-demerger sum-of-the-parts valuation of $6.40 a share for Iluka Resources.

The broker retains its Neutral rating with a target price of $10.50.

Target price is $10.50 Current Price is $9.75 Difference: $0.75
If ILU meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $10.08, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

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

Janus Henderson Group's recent share price rally (up 32%) with no adjusted earnings growth expected in FY21 and limited upside prompts Morgan Stanley to downgrade its rating to Equal-weight from Overweight. The target price rises to $40.10 from $38.50.

The broker expects September quarter net outflows to be -US$3.8bn. Retail flows data suggest a slowdown in the momentum with outflows expected to be circa -US$0.5bn. Morgan Stanley suspects this will make it hard for the group to deliver sustainable inflows in the near term since retail flows make up circa 65% of its assets under management (AUM).

The broker is of the view Janus needs to deliver consistent institutional inflows to give investors some confidence. The group would also do well to push more into dedicated ESG products where the broker notes the group is lagging its peers.

Industry view is In-line.

Target price is $40.10 Current Price is $39.01 Difference: $1.09
If JHG meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $37.08, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.5

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

Macquarie rates KLL as Outperform (1) -

Kalium Lakes is on schedule and budget at Beyondie, having completed the harvest ponds lining. This allows for a full summer of crystallisation to build a surface from which to harvest.

Macquarie assesses this is key to realising long-term value. Initial production is expected in the first quarter of FY22. The broker retains an Outperform rating and $0.40 target.

Target price is $0.40 Current Price is $0.18 Difference: $0.22
If KLL meets the Macquarie target it will return approximately 122% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates KLL as Add (1) -

Morgans believes Kalium Lakes is back on track and momentum is building.

The broker reports management remains comfortable that all activities are in hand and there have been no surprises outside of what would be expected for any remote construction project.

The Beyondie Project is 63% completed as at 30 September, with approximately -$160m spent. The purification plant construction has commenced, and all mechanical deliveries are expected before year end, ahead of schedule.

Achieving nameplate production would be the second trigger to likely remove the risk weighting altogether, highlights the analyst.

The Speculative Buy rating and target price of  $0.23 are maintained. 

Target price is $0.23 Current Price is $0.18 Difference: $0.05
If KLL meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates LNK as Hold (3) -

The company has updated on property settlements business, PEXA, in which it has a 44.2% stake. Ord Minnett believes the prospects for Link Administration are likely to be predicated on a non-binding indicative takeover offer.

A positive update on PEXA may suggest greater likelihood of a successful completion of $5.20, or higher. PEXA has started to experience a spike in transactions and its services are enjoying greater penetration in Queensland and South Australia.

Ord Minnett retains a Hold rating and $5 target for Link Administration.

Target price is $5.00 Current Price is $4.95 Difference: $0.05
If LNK meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.13, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

Like-for-like sales in the first 16 weeks of the first half were down -10.2%. Macquarie interprets this implying flat sales across those stores that were opened in the most recent eight-week period.

The broker assesses a recovery, ex Asia, does not require a reopening of borders but rather a return to fewer restrictions and normal behaviour within geographic zones.

Macquarie is now more positive about the profile of recovery and expects store roll-outs to return to previous run rates in FY22. Rating is upgraded to Outperform from Neutral and the target raised to $9.57 from $7.50.

Target price is $9.57 Current Price is $9.29 Difference: $0.28
If LOV meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.90, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates LYC as Buy (1) -

The operating performance rebounded in the September quarter and Ord Minnett believes momentum can continue. Aside from strong production, the broker was impressed by the cost performance.

Ord Minnett "laments" the difficulty of filtering fake news circulating in the sector, particularly in terms of US President Trump's "emergency executive order" and China's export controls.

A Buy rating and $4.05 target are retained.

Target price is $4.05 Current Price is $2.99 Difference: $1.06
If LYC meets the Ord Minnett target it will return approximately 35% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

UBS rates LYC as Buy (1) -

Lynas Corp's September quarter operational result was in-line with UBS's expectations except for the miner's guidance to continue running the plant at about 75% capacity. This disappointed UBS as the broker believes Lynas will be missing out on an opportunity to build surplus inventory which could prove to be a strategic asset (for example, if China restricts exports of rare earth products).

Even so, the broker is aware Lynas is the only integrated rare earth producer with processing capacity outside China.

The broker expects the miner's key product Neodymium-Praseodymium (NdPr) will move into deficit in 2023 due to a step-change in demand from electric vehicles. The price of NdPr is forecast to spike to a peak of US$100/kg in 2024 before returning to a sustainable long term price of US$60/kg.

Buy rating maintained. Target price rises to $3.40 from $3.

Target price is $3.40 Current Price is $2.99 Difference: $0.41
If LYC meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates MAI as Add (1) -

After Mainstream Group released first quarter funds under administration (FUA) figures, Morgans lifts EPS estimates for FY21 and FY22  by 2-3%.

The broker believes it was an excellent quarter with group FUA rising 7% sequentially. The standout performance was considered to come from the US PE business, which almost doubled FUA in the quarter.

Morgans continues to see the company's valuation as undemanding given its strong growth profile.

The Add rating is unchanged and the target price is increased to $0.94 from $0.83.

Target price is $0.94 Current Price is $0.85 Difference: $0.09
If MAI meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates MP1 as Hold (3) -

The first quarter for Megaport showed to Morgans revenue growth was subdued due to currency, European Internet Peering (IX) pricing pressure, and timing differences.

Despite the record customer adds, the broker highlights most new customers joined the company towards the end of the quarter, so had a limited revenue contribution.  Annualised Recurring Revenue (ARR) grew 2.6% quarter-on-quarter to $70m. However, the underlying trends (port and customer adds) were very strong, according to the analyst.

Morgans reduces the revenue forecast by around -2% in FY21 and FY22. This, combined with OPEX changes, results in earnings (EBITDA) forecasts declining -35% in FY21 and in FY22. However, the broker continues to rate the business highly.

The Hold rating and $15 target price are unchanged.

Target price is $15.00 Current Price is $14.58 Difference: $0.42
If MP1 meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $15.15, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates MP1 as Hold (3) -

Revenue growth was soft in the first quarter, affected by currency headwinds and the re-set of some legacy contracts in Europe. Ord Minnett notes some positive momentum which bodes well for the future.

Megaport remains committed to delivering break-even on operating earnings (EBITDA) by the end of FY21. Ord Minnett retains a Hold rating and raises the target to $14.00 from $13.80.

Target price is $14.00 Current Price is $14.58 Difference: minus $0.58 (current price is over target).
If MP1 meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.15, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates MP1 as Upgrade to Buy from Neutral (1) -

UBS observes new ports saw a strong rebound in the first quarter after the soft June quarter result. The broker takes this to mean the momentum trajectory is back on track.

The structural shift to cloud remains intact, highlights the broker and waits for more potential developments around SD-WAN/MVE either in terms of the revenue model or new potential partners onto the platform.

With port growth back on track, UBS upgrades its rating to Buy from Neutral. The target price rises to $16.45 from $16.

Target price is $16.45 Current Price is $14.58 Difference: $1.87
If MP1 meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $15.15, suggesting upside of 1.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

Macquarie rejigs its order of preference in the Australian supermarket sector. Third-party payment data suggest strong sales growth has continued into the first half.

The themes of internet sales and shopping local favours Metcash and Woolworths ((WOW)) over Coles ((COL)). Macquarie now expects Metcash has gained share in food which will be sticky over FY21.

Moreover, strong sales in hardware are likely because of increased renovation activity. Rating is upgraded to Outperform from Neutral and the target raised to $3.30 from $3.05.

Target price is $3.30 Current Price is $3.08 Difference: $0.22
If MTS meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.46, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Credit Suisse rates ORA as Neutral (3) -

Orora achieved earnings growth in North America in the September quarter and Credit Suisse upgrades estimates to allow for modest growth in FY21.

The broker assesses the packaging distribution business is a rare asset that could potentially surprise in terms of transaction value. Valuation is upgraded. The broker retains a Neutral rating and raises the target to $2.80 from $2.40.

Target price is $2.80 Current Price is $2.71 Difference: $0.09
If ORA meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Macquarie rates ORA as Neutral (3) -

North America, which is 37% of FY21 earnings estimates, impressed Macquarie in the first quarter, with both Orora Packaging Solutions and Orora Visual ahead of the prior corresponding quarter.

However, the broker needs to see the improvement sustained. Greater clarity on the wine sector is also required as uncertainties persist surrounding tariffs in China.

Australian beverages appear challenged and the broker forecasts flat segment earnings in FY21. Neutral retained. Target is raised to $2.80 from $2.61.

Target price is $2.80 Current Price is $2.71 Difference: $0.09
If ORA meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Morgan Stanley rates ORA as Overweight (1) -

Orora's first-quarter update notes operating income of its Australasia beverages segment is in line with last year but North American operating earnings are ahead of the last year figures. 

For North America, the broker's FY20 operating income forecast increases by 1% to $95m with higher earnings somewhat offset by a stronger Australian dollar. As a result, the group's FY20 operating income forecast increases by 1% to $243m.

With defensive earnings, strong yield and upside from North America, Morgan Stanley decides to retain its Overweight rating with the target price rising to $3.40 from $3.20. Industry view: Cautious.

Target price is $3.40 Current Price is $2.71 Difference: $0.69
If ORA meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

UBS rates ORA as Neutral (3) -

Orora's update at the AGM points towards a stabilising North American market with operating earnings during the first quarter ahead of last year. UBS suspects the restructuring initiatives in the US may be playing a role in offsetting the current challenging market conditions.

The broker notes there is scope to invest in new capacity and expand offshore in Orora's beverage segment. In the US, the plan is to improve operations for now.

UBS is attracted to Orora's Australasian beverage division since the business holds a dominant position in a defensive duopoly market.

Considering a re-rate will need a sustained improvement in the North American earnings outlook, UBS retains its Neutral outlook with the target price rising to $2.65 from $2.45.

Target price is $2.65 Current Price is $2.71 Difference: minus $0.06 (current price is over target).
If ORA 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 $2.73, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Citi rates OSH as Buy (1) -

Citi's conviction on Oil Search is growing. The broker acknowledges many are sceptical of its view that capital expenditure at Alaska could fall to -US$2.3bn from -US$5.5bn.

To the extent that capital expenditure falls, return should improve and this will make it easier to farm-in a new partner and attract the banks. It should also mean balance-sheet concerns are alleviated.

While bearish on LNG expansion, Citi believes the share price is not compensating for the value of gas reserves that have been designated for T3 in PNG. Buy/High Risk rating retained. Target is reduced to $3.80 from $3.85.

Target price is $3.80 Current Price is $2.95 Difference: $0.85
If OSH meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $3.44, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Citi rates SBM as Neutral (3) -

Citi observes the September quarter was a six-year low point for St Barbara's production.

While there will be a time to own the stock, the broker finds it hard to be positive at this juncture, requiring more confidence in Gwalia, the future of Simberi sulphide and timing of Atlantic satellites.

A strategic update is expected in the December quarter and Citi retains a Neutral rating with a $3.60 target.

Target price is $3.60 Current Price is $2.92 Difference: $0.68
If SBM meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Credit Suisse rates SBM as Outperform (1) -

September quarter production was solid and in line with budget, Credit Suisse observes. FY21 forecast for 370-410,000 ounces are unchanged.

The broker was disappointed with the performance at Gwalia, albeit this is considered insignificant in the context of the long-term opportunity.

The main catalyst for the short term is a strategy update in late November/early December to define Gwalia's optimisation and life-of-mine plan. Outperform rating and $4.40 target retained.

Target price is $4.40 Current Price is $2.92 Difference: $1.48
If SBM meets the Credit Suisse target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SBM as Underperform (5) -

Macquarie was not surprised by the outcome of the September quarter, noting the rockfall at Gwalia and unplanned maintenance at Simberi were key constraints on production.

St Barbara launched its "Building Brilliance" initiative during the quarter with the stated aim of delivering an "integrated company transformation", in order to lift productivity and cut costs.

Incorporating the production result means a -6% cut to Macquarie's FY21 estimates for earnings per share. The start of Simberi sulphide production is also pushed back. Underperform retained. Target is reduced by -3% to $2.80.

Target price is $2.80 Current Price is $2.92 Difference: minus $0.12 (current price is over target).
If SBM 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 $3.65, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates SBM as Overweight (1) -

St Barbara's September quarter group costs were -7% below Morgan Stanley's forecast. Gwalia's costs were 26% above the broker's forecasts. 

The company has flagged more mine development in the first half, which the broker notes will allow greater subsequent ore mining. 

Overweight rating is maintained with a target price of $3.95. Industry view is Attractive.

Target price is $3.95 Current Price is $2.92 Difference: $1.03
If SBM meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates SBM as Accumulate (2) -

Downgrades and delays at Gwalia have meant that, in the 18 months since the acquisition of Atlantic, St Barbara's share price has fallen -10% while the Australian dollar gold price has lifted almost 50%, Ord Minnett observes.

However, now that the final vent shaft is complete management is confident Gwalia can ramp up over the remainder of FY21. Ord Minnett notes filling Gwalia infrastructure will be a key catalyst along with the life-of-mine update in late November.

Accumulate retained. Target is reduced to $3.50 from $3.80.

Target price is $3.50 Current Price is $2.92 Difference: $0.58
If SBM meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.65, suggesting upside of 25.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates SLR as Outperform (1) -

The first quarter of FY21 beat Macquarie's expectations. A near-record performance continued at Deflector and the broker expects grades to improve at Mount Monger in the second half as new underground mines are bedded down.

Macquarie maintains an Outperform rating and $2.90 target, lifting estimates for earnings per share in FY21 by 9% and FY22 by 5%.

Target price is $2.90 Current Price is $2.29 Difference: $0.61
If SLR meets the Macquarie target it will return approximately 27% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates SOM as Add (1) -

The first quarter cash flow report for Somnomed shows signs of recovery and a clear path back to growth after global shutdowns, according to Morgans. 

The broker highlights Europe continues to outperform all other jurisdictions in terms of a return to historical sales levels. This is considered backed by positive reimbursement trends and potential for the company's devices to act as a first-line treatment to directly compete with CPAP (continuous positive airway pressure).

Morgans makes no changes to forecasts, but alters some risk assumptions following continuation of improved trading conditions.

The Add rating is unchanged and the target price is increased to $2.55 from $2.02.

Target price is $2.55 Current Price is $2.36 Difference: $0.19
If SOM meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates SYR as Outperform (1) -

There was no production in the September quarter. Sales from the stockpile at US$470/t totalled 3000t. The cash burn rate is being sustained at around -US$10m/quarter.

Credit Suisse envisages a plausible scenario whereby a decision to re-start Balama will not be taken until the end of the first quarter 2021.

This scenario presents a "precariously thin" cash buffer, the broker acknowledges, and would need to be remedied via debt or new equity. Outperform rating and $0.70 target retained.

Target price is $0.70 Current Price is $0.49 Difference: $0.21
If SYR meets the Credit Suisse target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $0.46, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

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

Morgan Stanley notes production at Balama remains suspended since March 28 with recommencement uncertain and market conditions unsupportive of production. However, the company noted a strong pickup in electric vehicle sales, up 69%, in the third quarter. A continuation of this will be supportive of a restart, suggests the broker.

Sales at 3kt were lower than Morgan Stanley's expected 5kt but the average price was better than the broker expected.

Equal-weight. Target is $0.45. Industry view: Attractive.

Target price is $0.45 Current Price is $0.49 Difference: minus $0.04 (current price is over target).
If SYR meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $0.46, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

UBS rates SYR as Neutral (3) -

Balama graphite mine operations in Mozambique remain idle with no production in the September quarter. Management did not state when the mine will restart.

Electric vehicles sales during the September quarter were up 69% which UBS believes is an indicator of better market conditions ahead.

Syrah Resources expects the natural graphite market to grow to 2.5mtpa by 2030 from 800ktpa in 2020. Since Balama remains the largest supplier of natural flake graphite globally, the broker expects this could lead to Balama being fully contracted within the next 3 years.

Cash burn remains the broker's major concern with the company's cash position down by -US$9m over the quarter. UBS believes restarting Balama by early 2021 is imperative to ensure sufficient cash levels.

On account of concerns around cash flow, UBS maintains its Neutral rating with the target price rising slightly to $0.52 from $0.48.

Target price is $0.52 Current Price is $0.49 Difference: $0.03
If SYR meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.46, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.0

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

Morgan Stanley rates TRS as Overweight (1) -

The Reject Shop disclosed at its AGM execution was going according to plan and investors should expect a few surprises versus the expectations set in August.

Morgan Stanley identifies potential catalysts likely to help achieve better performance. These include opportunities from a stay-at-home Christmas, better staples offer and rental cost efficiency.

Headwinds include shipping cost inflation and flexibility issues ex-Asia. The broker sees FY21 earnings growth and the longer-term thesis playing out. 

Morgan Stanley rates the stock as Overweight with a target price of $10. Industry view: In-line.

Target price is $10.00 Current Price is $6.68 Difference: $3.32
If TRS meets the Morgan Stanley target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $9.67, suggesting upside of 41.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Westpac is selling its 10.7% stake in Zip Co ((Z1P)) to simplify its business and capital more efficiently.

Morgan Stanley notes the Zip Co sale and the bank's decision to consolidate its international operations will lift the proforma CET1 ratio to about 11.0%, improving the bank's capital outlook.

The bank stated it will continue to develop its banking relationship with Zip and explore ways to increase the customers Zip can reach. This comes after the bank's announcement to allow Afterpay ((APT)) to use Westpac's transaction and savings accounts and other cashflow management tools.

The broker wants to know more about the bank's strategic rationale for entering into these new partnerships.

Equal-weight rating retained with a target price of $17.50. Industry view: In-line.

Target price is $17.50 Current Price is $18.69 Difference: minus $1.19 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.20, suggesting upside of 8.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Macquarie rates WOW as Outperform (1) -

Macquarie rejigs its order of preference in the Australian supermarket sector. Third-party payment data suggest strong sales growth has continued into the first half.

The broker notes Woolworths had a strong start to the first quarter and historically like-for-like sales have been a good indicator of relative price performance.

Retail liquor sales also appear to be at "extraordinary" levels and the broker expects a strong performance across all divisions. Target price is $42. Outperform rating retained.

Target price is $42.00 Current Price is $38.62 Difference: $3.38
If WOW meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $42.17, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates WSA as Buy (1) -

At spot prices of US$7.20/lb for nickel Ord Minnett expects consensus upgrades and the demand outlook will continue to improve.

A positive quarterly production update could also help Western Areas, which has experienced a drop in the share price of -21% in the year to date.

Ord Minnett maintains a Buy rating and lowers the target to $3.35 from $3.40.

Target price is $3.35 Current Price is $2.39 Difference: $0.96
If WSA meets the Ord Minnett target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Credit Suisse rates XRO as Downgrade to Neutral from Outperform (3) -

The share price has materially outperformed since late September, Credit Suisse notes. The broker now believes the current share price factors in the macro environment and the valuation relative to peers seems appropriate.

While the macro environment remains supportive it is increasingly understood by the market. Target is raised to $111 from $88. Rating is downgraded to Neutral from Outperform as a result.

Target price is $111.00 Current Price is $116.76 Difference: minus $5.76 (current price is over target).
If XRO meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $85.00, suggesting downside of -26.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.2

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