Australian Broker Call

Morgan Stanley rates ABY as Overweight (1) -

Morgan Stanley notes the founders have now sold down twice in the space of a year, retaining a 21.6% stake. As a result investors have questioned their commitment and whether the rest will be sold post escrow in August 2021.

Morgan Stanley does not profess to know the answer but acknowledges the risks are skewed to the downside, while highlighting there are many examples of successful transitions and founder sell-downs.

Overweight rating. Target is $8.35. Industry view: In-line.

Target price is $8.35 Current Price is $6.67 Difference: $1.68
If ABY meets the Morgan Stanley target it will return approximately 25% (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

Macquarie rates APA as Outperform (1) -

APA has announced the construction of a gas pipeline connecting the Perth Basin to the Goldfields Gas Pipeline, to be completed by mid-2022. It's a positive sign that the project will be equity funded, the broker suggests.

The pipeline will support additional opportunities for capex growth in the region. Risk around contracting exists, but the broker sees this as relatively small given the extent of mining development in the region including gold, nickel and rare earths.

Outperform retained, target rises to $12.17 from $11.72.

Target price is $12.17 Current Price is $10.53 Difference: $1.64
If APA meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.39, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

APA Group plans to invest $460m over the next 18 months to build the Northern Goldfields Interconnect (NGI) connecting the goldfields with the Perth Basin in Western Australia.

The company expects to have an initial 25% of capacity contracted and has identified significant additional demand.

The project, if completed by the end of FY22 would likely benefit from 100% depreciation, boosting returns, Morgan Stanley notes.

APA Group also intend to divest its 50% share of the Mid West Pipeline.

 Equal-weight rating. Industry view is Cautious. Target is $11.38.

Target price is $11.38 Current Price is $10.53 Difference: $0.85
If APA meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $11.39, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

APA Group has announced it will build a new 580km gas pipeline, connecting the Perth Basin into the company’s existing pipeline network servicing the Goldfields (WA).

The group will spend up to $460m capex on the new pipeline, aiming for first operations around mid-2022.

The group expects a “strong portfolio of long term contracts in place by the time construction is complete”. This project is the first time Morgans is aware the company is proceeding with construction prior to revenue contracts being secured.

The project contributes to a mild upgrade in forecast earnings as the broker had already assumed incremental earnings from an
unidentified investment.

The rating is increased to Add from Hold, given the around 10% total shareholder returns over the next 12 months. 

The target price is increased to $11.07 from $10.88. 

Target price is $11.07 Current Price is $10.53 Difference: $0.54
If APA meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $11.39, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates BPT as Add (1) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target to $2.12 from $2.08.

Morgans sees the company as well placed to exploit the cycle. It is considered leveraged to the rising oil price with strong brownfields growth potential from its Cooper Basin oil production.

The Add rating is unchanged.

Target price is $2.12 Current Price is $1.82 Difference: $0.3
If BPT meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $1.90, suggesting upside of 3.8% (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

Morgans rates CTP as Hold (3) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target for Central Petroleum to $0.12 from $0.089.

The Hold rating is maintained. 

Target price is $0.12 Current Price is $0.12 Difference: $0
If CTP meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates FBU as Neutral (3) -

Fletcher Building expects first half underlying earnings to be in the range of NZ$305-320m, ahead of the prior corresponding first half. No further guidance was provided, given trading remains volatile.

Citi suspects, despite a seasonal slowdown, elevated demand and the pulling forward of work in Australia from home builder stimulus should mean an acceleration in sales.

Some benefit from the current NZ$300m cost reduction program is also likely. Neutral rating retained with an NZ$5.90 target, as the better trading conditions appear factored in.

Current Price is $5.53. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

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

Macquarie rates FBU as Neutral (3) -

Fletcher Building provided maiden first half earnings guidance at its AGM of $305-320m compared to the broker's forecast $306m and last year's $219m. The dividend will be reinstated, with only a final but reflecting the full year.

Noting that the company's FY20 result was "extremely messy", the broker would like to do some more number crunching. The second half of FY21 should see a big uplift from cycling NZ's lockdown, and from cost-outs, which the market is only partly factoring in.

So, too, is the broker for now. Target rises to NZ$5.28 from NZ$4.94.

Current Price is $5.53. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

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

Morgan Stanley rates FBU as Overweight (1) -

First half guidance is for earnings (EBIT) of NZ$305-320m, representing 40% growth on the prior corresponding half. Property sales are expected to be weighted to the second half.

Fletcher Building expects to resume paying a full-year dividend in FY21. Overweight rating and NZ$6.30 target. Industry view is Cautious.

Current Price is $5.53. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

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

Citi rates FPH as Sell (5) -

Citi expects the hospital division will grow revenue at double-digit rates per annum over the next decade because of the large potential market size and benign competitive environment.

The pandemic has accelerated the growth rate and cemented the company's leading position, the broker notes. Valuation remains challenging, nonetheless, and revenues are likely to decline at some point post the pandemic.

Still, Citi expects the revenue platform will be much larger by 2030. Sell rating retained. Target rises to NZ$26.25 from NZ$23.00.

Current Price is $31.50. Target price not assessed.

Current consensus price target is N/A

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: -0.5

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

Credit Suisse rates FPH as Underperform (5) -

Net profit in the first half was up 86% and broadly in line with Credit Suisse's expectations. Unprecedented demand in the company's hospital division was the driver, caused by the pandemic and demand for nasal high flow hardware.

In homecare the performance was more mixed. The broker still suspects FY21 guidance for net profit of NZ$400-415m is conservative, given it assumes hospital demand eases back to normal conditions from January, and this is far from certain in the US and Europe.

Underperform retained. Target rises to NZ$31 from NZ$30.

Current Price is $31.50. Target price not assessed.

Current consensus price target is N/A

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: -0.5

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

UBS rates FPH as Sell (5) -

First half results reflected larger-than-expected hospital sales related to the pandemic. UBS believes the vast majority of the earnings upgrade should be captured in estimates.

Moreover, the broker envisages a material drop in earnings over the next 18 months as sales of hospital equipment and IV consumables fade.

The broker considers the stock overvalued and retains a Sell rating, envisaging negative earnings momentum in FY22 and potential rotation away from those that have outperformed during the pandemic. Target is raised to NZ$21.35 from NZ$20.20.

Current Price is $31.50. Target price not assessed.

Current consensus price target is N/A

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: -0.5

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

UBS rates FXL as Buy (1) -

Following the positive update regarding volume and credit performance and with first half net profit guidance expected to be above the prior corresponding half, UBS lifts estimates for FY21 by 49%.

The broker highlights the international expansion for both humm and Bundll, which are considered strategic turning points for the company.

Further details are awaited before considering the medium-term implications for earnings of the expansion. UBS continues to believe the stock is a value play in BNPL and retains a Buy rating. Target is raised $1.55 from $1.45.

Target price is $1.55 Current Price is $1.24 Difference: $0.31
If FXL meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $1.45, suggesting upside of 16.0% (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

Citi rates GXY as Neutral (3) -

Galaxy Resources has announced a $161m equity raising at an issue price of $1.70 a share, a -15% discount to the last closing price. Citi believes this will further de-risk Sal de Vida and is more confident on its execution.

The broker believes the current share price appropriately reflects the risk/reward profile after accounting for an 80% rally over the last two months. Neutral/High Risk retained. Target rises to $2.05 from $1.40.

Target price is $2.05 Current Price is $2.00 Difference: $0.05
If GXY meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.37, suggesting downside of -32.0% (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: -0.3

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

Morgan Stanley rates GXY as Underweight (5) -

Galaxy Resources intends to raise $161m in equity financing with proceeds to be used to fund Sal de Vida stage 1 and James Bay. Morgan Stanley considers the announcement opportunistic, related to the recent increase in the share price.

The broker finds the stock overvalued, and on simple dilution at the new offer price anticipates the share price will settle at $1.94, excluding any moves based on project updates.

Underweight. Target is $1.25. Industry view: Attractive.

Target price is $1.25 Current Price is $2.00 Difference: minus $0.75 (current price is over target).
If GXY meets the Morgan Stanley target it will return approximately minus 38% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.37, suggesting downside of -32.0% (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: -0.3

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

Ord Minnett rates GXY as Upgrade to Hold from Sell (3) -

Ord Minnett observes lithium prices have bottomed and parts of the supply chain are tighter - such as high-quality battery grade lithium hydroxide versus low-grade spodumene - although significantly higher prices are required to incentivise new projects to meet even conservative scenarios for demand.

Now that the sector is attracting attention and capital, the broker expects a constant evolution of the technology which should have an impact on demand and supply. Galaxy Resources is upgraded to Hold from Sell and the target raised to $1.80 from $0.90.

Target price is $1.80 Current Price is $2.00 Difference: minus $0.2 (current price is over target).
If GXY meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.37, suggesting downside of -32.0% (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: -0.3

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

Credit Suisse rates HMC as Neutral (3) -

Credit Suisse updates estimates to account for the establishment of the HomeCo Daily Needs REIT ((HDN)). Earnings dilution is expected, given Home Consortium has only a 27% interest in the REIT.

Since the spin-off, management, with total assets of $1.5bn, intends to grow assets to over $5m, although the broker notes the timing is unclear.

The objective is to sell down the remaining 100%-owned assets to 20% stakes and redeploy the capital. Neutral retained. Target is raised to $3.82 from $3.21.

Target price is $3.82 Current Price is $3.90 Difference: minus $0.08 (current price is over target).
If HMC meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.54, suggesting downside of -9.5% (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

Citi rates HVN as Buy (1) -

Harvey Norman reported Australian like-for-like sales growth of 30.4% for the first half to November 21. Citi notes the run rate remains elevated, although sales and earnings have moderated since the prior update.

Pre-tax profit growth remains at "extraordinarily high" levels and the broker forecasts 78% growth for the first half. Still, the de-rating that followed the update reflects investor caution because of the re-opening of the economy.

Citi remains positive about the medium-term outlook given the strength of the housing cycle is likely to persist in 2021 and 2022. Buy rating and $5.20 target maintained.

Target price is $5.20 Current Price is $4.58 Difference: $0.62
If HVN meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 4.8% (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

Credit Suisse rates HVN as Outperform (1) -

Credit Suisse observes the market is struggling to understand the high rates of profit growth being generated in the household goods sector.

While not capitalising this into perpetuity, the high rates of profit growth are meaningful for balance sheets and prospective dividends.

The broker notes Harvey Norman is on track for a record first half. Sales growth has proved resilient in a period of government-enforced store closures and a reduction in income support.

Australian franchisee sales grew 30% between July 1 and November 21 and Credit Suisse expects a 32c dividend for FY21 on the basis of a 65% pay-out ratio. Outperform retained. Target is $5.06.

Target price is $5.06 Current Price is $4.58 Difference: $0.48
If HVN meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 4.8% (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

Macquarie rates HVN as Outperform (1) -

Harvey Norman's AGM revealed sales growth of 28.2% in FY21 to date, the broker notes, reflecting the 2020 trend of home upgrades. Spending in consumer durables has been strong despite store closures. International regions are also performing strongly.

Management did not provide guidance but the broker notes spending in home, furniture and electronics remains elevated even as lockdowns ease. Outperform retained, target rises to $4.80 from $4.70. The broker prefers Harvey Norman over JB Hi-Fi ((JBH)).

Target price is $4.80 Current Price is $4.58 Difference: $0.22
If HVN meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 4.8% (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 HVN as Equal-weight (3) -

Profitability was exceptionally strong in the first four months of the first half and Morgan Stanley lifts FY21 earnings estimates by 26%, envisaging scope for capital management.

While the business has generated significant cash flow since March and is well-placed, the decline in the stock in the face of the latest update signals to the broker the market is looking through to FY22 earnings.

There is uncertainty around the extent of pulling forward the company's homeware categories and also the potential shift of expenditure back to travel. Equal-weight retained. Target is raised to $5.30 from $5.00. Cautious industry view.

Target price is $5.30 Current Price is $4.58 Difference: $0.72
If HVN meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 4.8% (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

Ord Minnett rates HVN as Accumulate (2) -

In the wake of the very strong trading update, Ord Minnett increases estimates for earnings per share by 17% for FY21 and 6% for FY22 and FY23. This is based on higher like-for-like sales growth and pre-tax profit margin assumptions.

The drivers of sales growth include investment in Australian homes and the reallocation of expenditure away from travel, transport and healthcare.

The broker considers the decline in the share price following the trading update indicates a preference for those "recovery" stocks that can prosper in the post-pandemic phase. Accumulate retained. Target rises to $5.25 from $5.00.

Target price is $5.25 Current Price is $4.58 Difference: $0.67
If HVN meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 4.8% (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

UBS rates HVN as Buy (1) -

Another strong update has ensued from Harvey Norman, with UBS noting pre-tax profit in the first half to date is up 160%. The broker upgrades estimates for FY21 by 16% and continues to envisage short-term upside risk.

A Buy rating is reiterated, given the attractive valuation. Nevertheless, going forward the catalysts are more limited and are likely to involve capital management. Target is $4.90.

Target price is $4.90 Current Price is $4.58 Difference: $0.32
If HVN meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.09, suggesting upside of 4.8% (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

Macquarie rates IPH as Outperform (1) -

IPH's AGM revealed the company is still still suffering some short term headwinds, but M&A and execution on synergies is providing some offset, the broker notes. Filings are down in A&NZ but showing good growth in Asia.

IPH’s generally resilient revenue and earnings should support the share price into 2021, the broker suggests, albeit forex movements offer a risk. The broker continues to view the stock’s defensive characteristics and valuation as attractive despite the headwinds.

Outperform retained, target rises to $8.60 from $8.50.

Target price is $8.60 Current Price is $6.94 Difference: $1.66
If IPH meets the Macquarie target it will return approximately 24% (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 KAR as Add (1) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target for Karoon Energy to $1.59 from $1.51. 

The company is the broker's preferred pick for top leverage to a recovering oil price. 

Among other positives, the management team is considered capable of the transition to a high quality mid-tier energy company. Additionally, the analyst calculates over ten years of remaining reserve life.

The Add rating is unchanged. 

Target price is $1.59 Current Price is $1.00 Difference: $0.59
If KAR meets the Morgans target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $1.38, suggesting upside of 32.7% (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

Credit Suisse rates KMD as Outperform (1) -

In the first quarter same-store sales growth for Rip Curl was 26.8%, with Kathmandu down -26.8%, wholesale down -14.4% and online up 37.0%.

Therefore, the flat operating earnings outcome is solid, in Credit Suisse's view, and wage subsidies are likely to have simply offset the impact of the Melbourne lockdown.

The strength of Rip Curl is critical for the first half, while the travel category weakness is expected to continue. Credit Suisse reiterates an Outperform rating. Target is unchanged at NZ$1.70.

Current Price is $1.26. Target price not assessed.

Current consensus price target is $1.30, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in July.

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: 0.7

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

Ord Minnett rates ORE as Upgrade to Hold from Sell (3) -

Ord Minnett observes lithium prices have bottomed and parts of the supply chain are tighter - such as high-quality battery grade lithium hydroxide versus low-grade spodumene - although significantly higher prices are required to incentivise new projects to meet even conservative scenarios for demand.

While some in the sector have run up strongly since the start of October, ahead of any move in the underlying commodity, and value is elusive Ord Minnett upgrades Orocobre to Hold from Sell. Target is raised to $3.40 from $1.95.

Target price is $3.40 Current Price is $3.74 Difference: minus $0.34 (current price is over target).
If ORE meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.87, suggesting downside of -26.3% (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

Morgans rates ORG as Add (1) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target to $6.25 from $6.23.

Morgans rates the company as the key pick amongst Australian energy retailers, with a diversified business between energy retailing, electricity generation and the predominantly oil-linked APLNG business.

The APLNG business is considered to have a strong reserves position to meet its long-term LNG commitments and supply the domestic market.

The Add rating is unchanged.

Target price is $6.25 Current Price is $5.25 Difference: $1
If ORG meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $6.22, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Morgans rates OSH as Hold (3) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target for Oil Search to $3.80 from $3.65.

The Hold rating is unchanged.

Target price is $3.80 Current Price is $3.82 Difference: minus $0.02 (current price is over target).
If OSH 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 $3.63, suggesting downside of -5.0% (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: -0.1

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

Morgan Stanley rates OZL as Overweight (1) -

Results from the Prominent Hill expansion study were positive and Morgan Stanley anticipates further upside through mine life and operating expenditure improvements.

The broker considers the stock cheap relative to global peers that have a strong growth pipeline. Morgan Stanley values the expansion at $306m for a return of 18.5% on an unrisked basis, assuming a 60% conversion of inferred resources.

Overweight rating. Target is raised to $17.10 from $15.90. Industry view: Attractive.

Target price is $17.10 Current Price is $15.92 Difference: $1.18
If OZL meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $15.58, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates SSM as Buy (1) -

Ord Minnett observes a natural tender opportunity for Service Stream with the NBN announcement of a substantial program of network upgrades. A revenue impact is considered likely in FY22.

The broker trims FY21 operating earnings (EBITDA) estimates to $101.5m and accounts for a second half skew. Buy rating retained. Target is raised to $2.63 from $2.55.

Target price is $2.63 Current Price is $2.31 Difference: $0.32
If SSM meets the Ord Minnett 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 STO as Add (1) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target for Santos to $7 from $6.25.

The company is Morgans top large-cap pick amongst oil and gas producers. It's considered to offer a solid combination of earnings diversification over close peers. 

The Add rating is unchanged. 

Target price is $7.00 Current Price is $6.53 Difference: $0.47
If STO meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $6.56, suggesting upside of 2.6% (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: 0.9

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

Morgans rates SXY as Add (1) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target for Senex Energy to $0.52 from $0.51.

Morgans rates the company as a growing gas producer with an attractive combination of gas and oil-priced earnings exposure.

The Add rating is unchanged.

Target price is $0.52 Current Price is $0.34 Difference: $0.18
If SXY meets the Morgans target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 25.5% (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

Morgans rates VHT as Add (1) -

Volpara Health Technologies posted a first half result broadly in-line with Morgans expectations.

Key highlights included annual recurring revenue (ARR) of NZ$19.9m and around 27% of women in the US currently have one or more of the company's products applied on their image and data.

The broker highlights SaaS revenue now accounts for 92% of the business and the gross margin was 91.7%.

A key upcoming catalyst is the FDA ruling concerning a mandate that a woman must be informed of her breast density.

The Add rating and target price of $1.71 are unchanged.

Target price is $1.71 Current Price is $1.41 Difference: $0.3
If VHT meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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: 0.5

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

Ord Minnett rates VHT as Hold (3) -

First half results revealed revenue of NZ$9.5m and an earnings loss of -NZ$6.9m. Annual recurring revenue reached NZ$19.9m.

Ord Minnett's attention is firmly on how the company can drive an acceleration in recurring revenue and deliver eventual profitability, the timeframe for which is pushed out once again.

Given the sluggish take up to date Ord Minnett is cautious about the ability of the existing product suite to achieve this outcome. Hold maintained. Target slips to $1.45 from $1.46.

Target price is $1.45 Current Price is $1.41 Difference: $0.04
If VHT meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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: 0.5

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

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

The appeal of investment in Virgin Money UK has diminished with recent re-rating, Macquarie suggests. The broker believes that from here, performance will likely be driven more by UK bank sector trends rather than Virgin-specific factors.

While there is scope for a substantial longer term re-rating, the execution of portfolio optimisation and ability to deliver on synergies remain key, the broker warns, and visibility on execution is limited. Downgrade to Neutral from Outperform.

Target rises to $2.70 from $2.10 due to improved capital and provision coverage.

Target price is $2.70 Current Price is $2.60 Difference: $0.1
If VUK meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.00, suggesting downside of -15.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

This company reports in GBP. 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

Morgans rates WPL as Add (1) -

Investor sentiment in the oil market has eroded after two once-in-a-decade downturns in the last five years, explains Morgans. Nonetheless, recent events have combined to leave the broker bullish on stocks within the oil and gas coverage. 

These events are the prospect of a weakening US dollar, a building supply response and an eventual covid recovery.

As a result of upgrading short and medium-term oil price forecasts, the analyst increases the price target for Woodside Petroleum to $24.60 from $24.

The Add rating is maintained. 

Target price is $24.60 Current Price is $23.31 Difference: $1.29
If WPL meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $23.31, suggesting upside of 0.9% (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: 0.7

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

Ord Minnett rates XRO as Lighten (4) -

Xero has increased its convertible notes offering to US$700m. Ord Minnett suggests the additional liquidity could be a sign of further acquisitions and strategic investments.

The broker finds merit in the company's strategy of making a small number of acquisitions and delivering a more holistic service to small business customers, yet suspects the increased issuance could also be a reflection of a slowdown in core business.

Lighten rating retained. Target is reduced to $88 from $90.

Target price is $88.00 Current Price is $129.94 Difference: minus $41.94 (current price is over target).
If XRO meets the Ord Minnett target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.16, suggesting downside of -21.0% (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

UBS rates XRO as Sell (5) -

UBS was somewhat surprised by the quantum of the US$700m convertible notes raising, particularly given the company has not made a material acquisition following the issuance of US$300m in convertible notes in September 2018.

Xero will buy back existing convertible bonds, expected to result in a -US$30-40m loss and unwind system call spreads relating to this issuance. The rest of the proceeds will be used for strategic investments.

Hence, a material acquisition is now highly likely, in the broker's view. Sell rating and $77 target retained.

Target price is $77.00 Current Price is $129.94 Difference: minus $52.94 (current price is over target).
If XRO meets the UBS target it will return approximately minus 41% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.16, suggesting downside of -21.0% (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