Australian Broker Call

Macquarie rates AFG as Outperform (1) -

Australian Finance Group's residential lodgments increased 33% year on year in the March quarter and 34% in April, although the broker notes last April was benign given the bank Royal Commission and a pending election.

Home loan lodgments were down -34% in April due to bank competition. Mezzanine funding has been secured to provide covenant relief.

Cash generation, a debt-free balance sheet and annuity style revenues underpin the broker's investment case. Outperform and $1.95 target retained.

Target price is $1.95 Current Price is $1.40 Difference: $0.55
If AFG meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates AGL as Underperform (5) -

AGL Energy is providing financial relief to customers at a time the impact of weaker coal and gas prices continue to weigh on forward electricity/gas prices. The company has retained its FY20 guidance but with a skew towards the low end, while FY21 will bring significant headwinds.

AGL's earnings profile is challenged, the broker suggests, although operating cash flow is strong and gearing is moderate, providing the opportunity to pursue new investments. Target falls to $15.88 from $17.38, Neutral retained.

Target price is $15.88 Current Price is $16.51 Difference: minus $0.63 (current price is over target).
If AGL 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 $17.58, suggesting upside of 6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Ord Minnett rates AGL as Hold (3) -

AGL Energy reiterated FY20 guidance but hinted towards increased bad debt provisioning which makes the company unlikely to achieve the top end of the range, predicts Ord Minnett.

Headwinds in the form of lower wholesale electricity and large-scale renewable energy certificates (LREC) prices would negatively impact FY21, comments the broker, expecting a downgrade in net earnings to the tune of -23% to $628m.

Even so, the broker considers these factors to be temporary and expects earnings to recover.

Hold rating maintained with target price reduced to $18.40 from $20.50.

Target price is $18.40 Current Price is $16.51 Difference: $1.89
If AGL meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $17.58, suggesting upside of 6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Credit Suisse rates ALL as Outperform (1) -

Social casino revenue appears to Credit Suisse to be up over 20-30% in April. The broker forecasts 5% growth in social casino bookings in the March half-year and 18% in the September half.

The Raid game is expected to generate US$200-300m for a number of years and its earnings margin, the broker assesses, could go from around zero presently to upwards of 40% as marketing expenditure is optimised.

Outperform maintained. Target is $28.50.

Target price is $28.50 Current Price is $24.66 Difference: $3.84
If ALL meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $29.11, suggesting upside of 18.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Credit Suisse rates AMP as Outperform (1) -

Credit Suisse expects the sale of the life business will be approved by the regulators but there is a risk, because of the limitations currently in place, that it will not be approved by June 30, 2020.

The deal may also proceed on changed terms, and potentially at a lower sale price. The broker assesses the current share price ascribes minimal value to a capital return after the sale of life, or any earnings uplift should AMP decide to retain the business.

Credit Suisse anticipates a re-rating catalyst in the weeks ahead and maintains an Outperform rating. Target is $1.50.

Target price is $1.50 Current Price is $1.40 Difference: $0.1
If AMP meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.39, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates ASB as Buy (1) -

The failure to win the large frigate contract increases the uncertainty around Austal's US shipbuilding pipeline, Citi asserts.

However, the broker maintains a Buy rating as the company has two years to replenish its US order book and the US Navy's new structure is likely to increase the focus on smaller autonomous ships, which could be a positive.

Moreover, naval shipbuilding opportunities are emerging in Asia and a strong balance sheet could be used for acquisitions, or capital returns.

The business has limited exposure to the pandemic disruption. Citi reduces the target to $3.38 from $5.05.

Target price is $3.38 Current Price is $2.84 Difference: $0.54
If ASB meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.96, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

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

UBS observes the company's KFC Australia business appears to be one of the better performing fast food operations during this pandemic. The business was an early beneficiary from the easing of lock-down restrictions.

It is also likely to be a beneficiary of domestic car-based holiday activity when this resumes. UBS considers the stock has defensive qualities and the multiples are not overly demanding.

Rating is upgraded to Buy from Neutral and the target reduced to $8.95 from $10.60.

Target price is $8.95 Current Price is $7.70 Difference: $1.25
If CKF meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Credit Suisse rates DHG as Outperform (1) -

Incremental news from the trading update has related to residential listings in April, which were better than some of the feedback Credit Suisse has received from agents.

Domain's decline was less severe, down around -20%, compared with some agents reporting listings declines of -50-70%. The broker allows for some further slowdown from April in its forecasts but eases back on the extent.

Outperform rating maintained. Target is raised to $2.90 from $2.80.

Target price is $2.90 Current Price is $2.83 Difference: $0.07
If DHG meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.19, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Macquarie rates DHG as Outperform (1) -

Domain Group enjoyed solid yield trends in the March quarter but then April saw a decline in the "high -20% range", the company reported. The crisis isn't over yet, but the broker believes April could have been worse.

Outperform retained on the broker's belief the company is well positioned for eventual volume recovery. Target rises to $3.20 from $2.90.

Target price is $3.20 Current Price is $2.83 Difference: $0.37
If DHG meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.19, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Ord Minnett rates DHG as Accumulate (2) -

Domain Holdings' trading update saw April's listing numbers fare much better than expected by Ord Minnett. Going forward, the broker has reduced listings decline estimate to -30% for the next six months with upside risk on potential ease in restrictions.

The broker has increased FY20 estimates for revenue and operating income driven by better than expected listing numbers and believes the company can continue paying dividend in the current scenario.

Ord Minnett reiterates its Accumulate rating with target price increased to $3.50 from $3.15.

Target price is $3.50 Current Price is $2.83 Difference: $0.67
If DHG meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $3.19, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Morgan Stanley rates DXS as Overweight (1) -

Dexus has confirmed that small-medium enterprises which have asked for rental relief comprise around 8% of its property income, the majority being inner city retailers such as food courts.

Rent collections remain robust nevertheless, which Morgan Stanley believes is a confirmation that office is subject to less volatility than retail.

Overweight rating and $11 target maintained. Industry view is In-Line.

Target price is $11.00 Current Price is $8.93 Difference: $2.07
If DXS meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $11.24, suggesting upside of 25.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Ord Minnett rates DXS as Hold (3) -

Looking at Dexus’s latest trading update, broker Ord Minnett believes the company is priced for a -20% asset value correction.

This, elaborates the broker, would be a ‘bottom of the cycle’ valuation making for an attractive entry point assuming the company continues to pay a dividend under all scenarios.

The broker's focus is on ascertaining any structural change in demand for office space that could raise medium-term uncertainty.

Hold rating reaffirmed with target price at $9.10.

Target price is $9.10 Current Price is $8.93 Difference: $0.17
If DXS meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $11.24, suggesting upside of 25.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

UBS rates DXS as Buy (1) -

Dexus has highlighted strong portfolio metrics in its update but UBS considers it too early to quantify the impact of the pandemic.

The company continues to work with smaller tenants regarding rent relief. UBS assumes around 30% of tenants received rental waivers of around 30% in the June/September quarters.

Meanwhile, leasing inquiries for office have fallen and inspection rates have slowed. Dexus is expected to be resilient, given the portfolio quality and lease expiries. UBS retains a Buy rating and $10.77 target.

Target price is $10.77 Current Price is $8.93 Difference: $1.84
If DXS meets the UBS target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $11.24, suggesting upside of 25.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Morgan Stanley rates IEL as Overweight (1) -

According to the company survey demand for international education remains resilient which, Morgan Stanley assesses, bodes well for a rebound upon conditions normalising.

Around 41% of students are comfortable with starting online study before transitioning to face-to-face. This highlights some flexibility for universities to engage with students despite the restrictions on international travel.

Overweight rating. Industry view is In-Line. Target is $17.50.

Target price is $17.50 Current Price is $15.02 Difference: $2.48
If IEL meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $15.71, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Citi rates JHX as Buy (1) -

Citi observes James Hardie has taken proactive action ahead of the uncertain outlook. The decision to conserve capital by cutting the dividend and expenditure enhances near-term liquidity, the broker adds.

James Hardie will delay commissioning of the Prattville manufacturing plant to FY22 and bring forward the permanent closure of Summerville.

The shift to a regional model in the Asia-Pacific region moves NZ manufacturing to Australia, which will take place over the next 4-6 months.

Citi retains a Buy rating and $36 target.

Target price is $36.00 Current Price is $20.69 Difference: $15.31
If JHX meets the Citi target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $29.38, suggesting upside of 42.0% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

Credit Suisse rates JHX as Neutral (3) -

Revenue growth in the fourth quarter appears to be ahead of forecasts which Credit Suisse suggests is another validation of the success of the company's new commercial strategy.

The decision to suspend dividends and reduce capital expenditure transforms the outlook for the balance sheet as there is no debt maturing in the next 12 months.

The broker retains a Neutral rating, reducing FY20 net profit estimates by -1% and increasing FY21 by 4%. Target is $21.50.

Target price is $21.50 Current Price is $20.69 Difference: $0.81
If JHX meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $29.38, suggesting upside of 42.0% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

Macquarie rates JHX as Outperform (1) -

James Hardie is taking solid action in harvesting working capital, cutting costs and shutting capacity, the broker notes, unsurprised. In a pre-result update, the company has retained guidance with a skew to the lower end.

The broker has been nonetheless surprised by progressive improvement in trading domestically and in the US in April, despite restrictions on movement.

Despite the risks, the broker sees James Hardie as well placed, and on an even better footing due to actions taken. Outperform retained. Target falls to $32.75 from $35.30 largely due to currency.

Target price is $32.75 Current Price is $20.69 Difference: $12.06
If JHX meets the Macquarie target it will return approximately 58% (excluding dividends, fees and charges).

Current consensus price target is $29.38, suggesting upside of 42.0% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

Morgan Stanley rates JHX as Overweight (1) -

Revised guidance points to a solid FY20, in Morgan Stanley's view, albeit at the lower end of prior guidance. Management has highlighted double-digit volume growth in North America.

Morgan Stanley assesses action to adjust the cost base to current demand is prudent. The broker reduces FY20 net operating profit estimates to US$352m, which is the mid point of guidance.

Overweight rating reiterated. Morgan Stanley believes James Hardie can outperform in a post-pandemic market. Target is raised to $32.00 from $31.20. Cautious industry view.

Target price is $32.00 Current Price is $20.69 Difference: $11.31
If JHX meets the Morgan Stanley target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $29.38, suggesting upside of 42.0% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

Ord Minnett rates JHX as Buy (1) -

James Hardie revised FY20 net profit guidance downwards to US$350-355m from US$350-370m along with suspending dividends and capital expenditure guidance for FY21. These revisions were expected by Ord Minnett.  

Even with an uncertain short-term outlook, the broker believes James Hardie is a high-quality business with ample liquidity and forecasts positive cash generation in FY21.

The broker retains Buy with the target price unchanged at $25.

Target price is $25.00 Current Price is $20.69 Difference: $4.31
If JHX meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $29.38, suggesting upside of 42.0% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

UBS rates JHX as Buy (1) -

James Hardie has outlined measures to preserve its balance sheet including the deferral of dividends and a -50% reduction in FY21 capital expenditure. The company will also move to stage asbestos payments from a lump sum.

UBS is surprised by the decision to close the NZ plant, allowing future demand to be met from Australia. Guidance for FY20 has been reduced by -2%.

The broker's main concern is the speed of recovery after the pandemic passes. Buy rating maintained. Target is reduced to $29 from $30.

Target price is $29.00 Current Price is $20.69 Difference: $8.31
If JHX meets the UBS target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $29.38, suggesting upside of 42.0% (ex-dividends)

The company's fiscal year ends in March.

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: 0.8

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

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

Macquarie has been out visiting furniture stores in Sydney -- both Nick Scali and small unlisted competitors -- to find that while sales in some stores were down over -50% at the low point, the last two weeks of April saw a pick-up in foot traffic. Declining housing turnover will nevertheless remain a headwind.

The broker suggests the drop in activity is not as bad as the market is assuming, and a well-managed Nick Scali, with meaningful property ownership, has an opportunity to pick up market share, and larger furniture businesses may end up swallowing up struggling SMEs if the situation gets worse. Upgrade to Outperform from Neutral.

Target falls to $5.20 from $5.30.

Target price is $5.20 Current Price is $4.67 Difference: $0.53
If NCK meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates NCM as Hold (3) -

Ord Minnett expects Newcrest Mining’s Havieron and Red Chris projects to increase earnings per share by 20% from FY27 onwards.

The funding requirements at US$1bn per annum for the next five years seem manageable, comments the broker, leaving room for Newcrest to increase its share in projects.

Hold rating retained with target price increased to $28 from $26.

Target price is $28.00 Current Price is $29.02 Difference: minus $1.02 (current price is over target).
If NCM 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 $27.72, suggesting downside of -4.5% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates NEC as Outperform (1) -

Credit Suisse expects revenue trends to be challenged in the fourth quarter, with April free-to-air revenue down -30% and May looking even worse.

The broker continues to be surprised by the extent of the cost reductions the company is able to deliver during the crisis.

Management has guided for FY20 TV costs to be down -7% but this assumes no resumption of the NRL season and no additional NRL costs in FY20.

Among the company's assets, Stan remains the obvious beneficiary of the pandemic-related restrictions. Outperform maintained. Target rises to $2.00 from $1.90.

Target price is $2.00 Current Price is $1.39 Difference: $0.61
If NEC meets the Credit Suisse target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 39.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates NEC as Outperform (1) -

A trading update from Nine Entertainment revealed the shift to digital is ongoing, with 45% of earnings expected to come from digital platforms in FY20. A return of the NRL could be a negative in terms of Nine's costs, the broker notes, but the company sees the current situation as an opportunity to bring sporting rights costs down in future. 

New rules making Google and Facebook pay for content will provide a boost to the coffers. Meanwhile, FTA TV market share is holding up but advertising is down -30% and trending lower. The company is facing material near term headwinds but the broker sees upside underpinned by Stan, Domain and other digital assets. Outperform and $1.60 target retained.

Target price is $1.60 Current Price is $1.39 Difference: $0.21
If NEC meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 39.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Ord Minnett rates NEC as Buy (1) -

Nine Entertainment’s trading update was worse than expected by Ord Minnett.

Even as higher expected revenue share prompted the broker to increase FY20 revenue estimates to $2.244bn, operating earnings forecast was lowered to $435.8m due to lesser expected cost savings.

The broker continues to forecast a decline for the next six months in metro free-to-air TV and radio revenues.

Buy rating maintained with target price increased to $2.10 from $1.40.

Target price is $2.10 Current Price is $1.39 Difference: $0.71
If NEC meets the Ord Minnett target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 39.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates NSR as Underperform (5) -

Having lost its prior suitors due to the virus, National Storage REIT has raised $330m of capital at a -7% discount. The raising shores up the balance sheet but is around -15% dilutive, the broker notes.

The broker remains concerned about revenues in the short term, with lower housing turnover and weaker consumer confidence weighing, and the REIT's track record on returns from new equity has been below average. Underperform and $1.45 target retained,

Target price is $1.45 Current Price is $1.58 Difference: minus $0.13 (current price is over target).
If NSR meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.62, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

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

National Storage has launched a $300m equity raising via a placement. FY20 guidance for earnings per share has been revised to 8.2-8.7c, slightly lower.

A distribution of 90-100% of underlying earnings has been reconfirmed. Morgan Stanley notes, post the capital raising, gearing will reduce to 24.1%, providing flexibility to pursue acquisitions should stressed sellers emerge from the pandemic.

Equal-weight rating. Target is $1.70. Industry view is In-Line.

Target price is $1.70 Current Price is $1.58 Difference: $0.12
If NSR meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.62, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Citi rates ORI as Upgrade to Buy from Neutral (1) -

Orica has a strong position in the global explosives sector because of its intellectual property, particularly in wireless blasting systems. Citi also notes the diversified earnings are underpinned by multi-year contracts with major miners.

The outlook for end markets remains mixed, but increased strip ratios in the mining industry are favourable for explosive volumes.

As the share price has fallen, and given the assessment of risk around earnings, Citi upgrades to Buy from Neutral. Target is reduced to $19.40 from $24.50.

Target price is $19.40 Current Price is $17.24 Difference: $2.16
If ORI meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $19.61, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in September.

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

Citi rates QAN as Buy (1) -

Qantas has focused on a range of liquidity initiatives in order to withstand the impacts of the shutdown. Citi considers the airline is in an enviable position in global aviation as it does not have to raise equity.

Qantas has resolved to get cash burn to -$40m per week by the end of June 2020, a reduction of more than -50% from current levels.

The domestic and trans-Tasman routes are considered the viable starting point for a recovery and Qantas could have around 50% share in the latter and almost exclusive share of Australia's east coast, if flying resumes early in FY21.

However, Citi cautions investors about extrapolating this into meaningful earnings upside against a backlog of accrued travel credits, weaker sentiment and demand, as well as constraints on load factors from social distancing.

Buy/High Risk rating maintained. Target is $3.70.

Target price is $3.70 Current Price is $3.52 Difference: $0.18
If QAN meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $3.95, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates QAN as Underperform (5) -

Credit Suisse notes Qantas has short-term liquidity of $3.5m and has $2.7bn of unencumbered aircraft assets against which funds could be raised, which suggests equity will survive the pandemic.

Currently Qantas is operating 5% of the domestic network and 1% of the international network on an average seat kilometre basis.

However, any ongoing social distancing requirements are likely to affect the potential seat load factor and it remains unclear what a viable solution will be.

Credit Suisse assesses demand recovery is likely to be volatile and matching capacities to demand could be challenging.

Moreover, Virgin Australia ((VAH)) could re-emerge from voluntary administration as a far tougher competitor. The broker retains an Underperform rating and target of $2.20.

Target price is $2.20 Current Price is $3.52 Difference: minus $1.32 (current price is over target).
If QAN meets the Credit Suisse target it will return approximately minus 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.95, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates QAN as Neutral (3) -

Qantas has cut costs and secured sufficient liquidity to get it through 2021 if current conditions persist. Macquarie's analysts are forecasting a return to profitability in the second half of 2021 but with the caveat of a high level of uncertainty, so don't hold them to it.

The broker still considers Australia as one of the most attractive airline markets globally with two main operators, and at this stage it's unclear what the second one might look like. Target falls to $3.60 from $4.80, Neutral retained.

Target price is $3.60 Current Price is $3.52 Difference: $0.08
If QAN meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.95, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

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 QAN as Overweight (1) -

Morgan Stanley notes the liquidity position has improved and Qantas expects cash burn to reduced to -$40m per week by the end of June.

Management has indicated that recent experience with chartered flights indicates an ability to ramp up quickly (one week for domestic) and, if required again, ramp down in 2-4 weeks. Incremental capacity will only be added if it is positive for cash flow.

Overweight rating. Target is $5.60. Industry view is In-Line.

Target price is $5.60 Current Price is $3.52 Difference: $2.08
If QAN meets the Morgan Stanley target it will return approximately 59% (excluding dividends, fees and charges).

Current consensus price target is $3.95, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates SBM as Neutral (3) -

The pre-feasibility study for the Simberi sulphide shows the mine is economically viable. Given the chance of a slippage in timelines and delivery risks, which could weigh on sentiment on valuation, Citi sticks with a Neutral rating and moves to a High Risk notation.

There is upside risk to the broker's call if the PNG mining act is resolved and the sulphide project proceeds. Target is raised to $3.00 from $2.80.

Target price is $3.00 Current Price is $2.53 Difference: $0.47
If SBM meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates SBM as Outperform (1) -

The updated pre-feasibility study for the Simberi sulphide development has shown an 80% increase in life-of-mine production over a longer 13-year life. Cost estimates have also improved.

Completion of the feasibility study is planned by the end of 2020 with an investment decision in the March quarter of 2021.

Nevertheless, the company has indicated that broad-ranging changes proposed to the PNG mining act could render the project uneconomic, with highly punitive new levies on disposal of tailings and waste and a fourfold increase in royalties.

Credit Suisse updates its model to allow for the revised study and takes a conservative approach. Outperform rating and $3.30 target are maintained.

Target price is $3.30 Current Price is $2.53 Difference: $0.77
If SBM meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates SBM as Overweight (1) -

The pre-feasibility study is a positive development for the Simberi sulphide, Morgan Stanley observes. Eventual construction would further diversify the company's gold production to three low-cost long-life sites.

The feasibility study will now consider the proposed changes to the PNG mining act which, the broker notes, as currently drafted, would render the project uneconomic.

Overweight rating and $3.35 target. Industry view is In-Line.

Target price is $3.35 Current Price is $2.53 Difference: $0.82
If SBM meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates SBM as Buy (1) -

St Barbara confirmed progressing to a feasibility study for the Simberi sulphide project in Papua New Guinea, that would lead to a final investment decision (FID) by March 2021.

The 13-year project is considered robust by the broker and is expected to produce 1.8moz for capital expenditure of -US$130–150m and with all-in sustaining costs of US$920/oz.

Buy rating retained with target price increase of $4.10 from $3.80.

Target price is $4.10 Current Price is $2.53 Difference: $1.57
If SBM meets the Ord Minnett target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 29.2% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates SHL as Outperform (1) -

Despite strong increases in pandemic testing volumes in Australia, Credit Suisse estimates industry pathology volumes have fallen -30-40% from mid-March as a result of lower GP attendances and the deferral of elective surgery.

US volumes are estimated to have declined -40-50%. While the easing of some restrictions is positive, the broker expects a slow return to more elective healthcare.

Earnings estimates for FY20 are lowered by -20% and FY21 by -8%. Outperform maintained. Target is reduced to $28.00 from $29.50.

Target price is $28.00 Current Price is $26.02 Difference: $1.98
If SHL meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $27.48, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in June.

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

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

Transurban has indicated traffic deteriorated in early April but the deterioration has now moderated. Large vehicles continue to be more resilient and weekday traffic stronger than weekends.

Morgans makes slight upgrades to revenue forecasts, which assumes severe traffic weakness until September and a full recovery not occurring until 2022.

Upside may come from traffic recovering quicker than previously assumed as government restrictions are eased.

Rating is downgraded to Hold from Add as the potential shareholder returns are compressed to 1% as a result of the share price increase. Target is reduced to $13.52 from $13.71.

Target price is $13.52 Current Price is $13.54 Difference: minus $0.02 (current price is over target).
If TCL meets the Morgans target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.10, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

UBS rates WBC as Neutral (3) -

Westpac has announced the formation of a specialist business division, which includes wealth, superannuation, investments & automotive, general & life insurance. The bank is taking a strategic review to assess the most appropriate ownership structure.

The specialist business generates 2% of revenue and uses 8% of group capital. UBS assesses the disposal of these assets could help strengthen CET1, especially as Westpac indicated RWA inflation is likely to absorb 105-180 basis points of CET1 over the next two years.

However, the broker acknowledges disposing of these sorts of businesses is not easy in the current environment. Increased credit provisioning and strategic options around capital remain the key positives, UBS adds. Neutral rating retained. Target is $18.50.

Target price is $18.50 Current Price is $15.95 Difference: $2.55
If WBC meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $18.59, suggesting upside of 16.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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