Australian Broker Call

UBS rates AD8 as Buy (1) -

While assessing Dante is one of the strongest products across its coverage and there are material long-term opportunities in audio and video, UBS assesses the current environment could be challenging.

Social distancing not only makes installations difficult but a softer economy delays replacements and reduces greenfield installations through subdued construction activity.

The broker incorporates a recession into forecasts, amid declining market revenues over the fourth quarter of FY20 out until the third quarter of FY21. Buy rating maintained. Target is reduced to $7.30 from $8.70.

Target price is $7.30 Current Price is $6.06 Difference: $1.24
If AD8 meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.43, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

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

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

APN Industria has withdrawn FY20 guidance following the release of the code of conduct from the federal government.

The company has indicated the potential impact of a requirement to waive a proportion of attendance rent is not possible to determine at the moment.

As a result, Morgans lowers forecasts for FY20 and FY21 income by around -2% and -3%, respectively. The balance sheet is considered sound.

Following weakness in the security, the broker upgrades to Add from Hold and reduces the target to $2.68 from $3.16.

Target price is $2.68 Current Price is $2.14 Difference: $0.54
If ADI meets the Morgans target it will return approximately 25% (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

UBS rates AGI as Sell (5) -

UBS assumes demand will take time to recover and replacements are likely to be down -50% over the next 6-12 months.

After incorporating the benefit of cost reduction measures, the broker anticipates Ainsworth Game will make a pre-tax loss of -$30-35m over FY20-21 before returning to positive in FY22. No dividends are assumed until FY24.

Sell rating is maintained. Target is reduced to $0.37 from $0.46.

Target price is $0.37 Current Price is $0.52 Difference: minus $0.15 (current price is over target).
If AGI meets the UBS target it will return approximately minus 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Citi rates APA as Neutral (3) -

Citi estimates APA Group’s operating earnings for FY20 to be -2% lower at $1.64bn with FY21 forecast mostly unchanged. The broker expects investment opportunities worth $1bn to be back-weighted with corporates postponing discretionary spending for the next 2-3 years.

Overall, Citi considers APA attractive with limited earnings impacts from Covid-19, medium-term growth opportunities, strong liquidity and a defensive yield.

Rating upgraded to Buy from Neutral with target price increased to $12.51

Target price is $12.51 Current Price is $11.67 Difference: $0.84
If APA meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $11.40, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Macquarie rates APA as Neutral (3) -

APA Group's investor day revealed the company is looking for pipeline opportunities on the US West Coast, and electricity "firming" capacity through both gas plants and batteries. There is established infrastructure for batteries locally but less so for gas plants, the broker notes.

The balance sheet has been restrengthened via a recent euro bond issue and the one negative was an Orbost update, with more clarity expected to emerge after the shutdown, the broker notes. Target falls to $11.37 from $11.89 on revised bond price assumptions. Neutral retained.

Target price is $11.37 Current Price is $11.67 Difference: minus $0.3 (current price is over target).
If APA meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.40, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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

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

After the company's investor briefing Morgan Stanley envisages prospects for future efficiencies from flexible work arrangements and technology upgrades.

The company is confident the Orbost gas processing plant will be commissioned soon. A $1bn 2-3 year investment pipeline was also reaffirmed, linked to new gas supply to the east coast grid and new demand in WA.

Morgan Stanley retains an Equal-weight rating. Industry view is Cautious. Price target is $11.66.

Target price is $11.66 Current Price is $11.67 Difference: minus $0.01 (current price is over target).
If APA meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.40, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates APA as Hold (3) -

APA Group has indicated it does not need to raise equity at this juncture, except in the case of a "reasonably-sized" acquisition.

Earnings are being driven by growth projects which pass the company's investment criteria and Morgans notes the reference to over $4bn in potential domestic investment over the next 5-10 years.

Recent share price strength has compressed potential returns to the extent that the current price is not compelling, Morgans suggests. Hold maintained. Target rises to $10.82 from $10.81.

Target price is $10.82 Current Price is $11.67 Difference: minus $0.85 (current price is over target).
If APA meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.40, suggesting downside of -2.3% (ex-dividends)

The company's fiscal year ends in June.

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 APX as Initiation of coverage with Accumulate (2) -

Ord Minnett initiates coverage with an Accumulate rating and $33 target. The broker assesses Appen has demonstrated a strong track record of growth amid repeat work from its key technology customers.

The company's world-class training data are vital for the employment of artificial intelligence and, hence, the broker believes it can take advantage of the next stage of growth in the industry.

Target price is $33.00 Current Price is $29.70 Difference: $3.3
If APX meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $29.48, suggesting downside of -0.8% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Macquarie rates ASX as Underperform (5) -

An update from the ASX showed average daily volumes up 57% in the second half FY20 to date from last year. Secondary capital raisings have all but doubled. The offset is interest income, impacted by lower rates.

Clearly the exchange is making hay, but at a 31.4x PE the stock is valued 29% above its five-year average and at a 67% premium over the All Industrials, the broker points out. Underperform retained. Target rises to $71.50 from $69.50.

Target price is $71.50 Current Price is $83.31 Difference: minus $11.81 (current price is over target).
If ASX meets the Macquarie target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $74.26, suggesting downside of -10.9% (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 CSR as Downgrade to Neutral from Buy (3) -

Citi expects CSR to report a net profit dip of -40% to $111.1m in its upcoming FY20 results, reflecting top-line earnings pressure and negligible property earnings. Further, the broker expects a final dividend of $0.05 per share (50% franked).

The aluminium hedging profile will be the focus medium-term with CSR having a large exposure to aluminium spot prices, comments Citi.

The outlook looks challenging with emerging top-line headwinds in aluminium and housing putting pressure on earnings, anticipates the broker.

Rating downgraded to Neutral from Buy with target price reduced to $3.45 from $5.60.

Target price is $3.45 Current Price is $3.38 Difference: $0.07
If CSR meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.58, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in March.

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

Macquarie rates DCN as Resumption of coverage with Outperform (1) -

Dacian Gold has completed its recapitalisation via a $98m raising, and the broker has returned from restriction to set an Outperform rating, given the company's credit risk, which previously had the broker on Underperform, has been materially reduced. Target 45c on dilution (previously 70c).

The fresh capital also shores up the three-year Mt Morgan open pit base case, while upside is on offer from a restart of underground mining and further exploration, the broker suggests.

Target price is $0.45 Current Price is $0.38 Difference: $0.07
If DCN meets the Macquarie target it will return approximately 18% (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

Credit Suisse rates HMC as Upgrade to Outperform from Neutral (1) -

Credit Suisse considers, with around 90% of the company stores remaining open, the impact of the pandemic is moderated. The net cash impact from lower cash rent is expected to be relatively minor because of the cost savings and dividend reductions.

While acknowledging the challenging conditions could hinder the timing of the company's strategy, the broker considers the asset locations and relatively low rents may provide an advantage over other traditional retail outlets.

Rating is upgraded to Outperform from Neutral, with the stock expected to appeal to longer-term investors. Target is reduced to $3.18 from $3.89.

Target price is $3.18 Current Price is $2.82 Difference: $0.36
If HMC meets the Credit Suisse target it will return approximately 13% (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

Morgans rates HPI as Hold (3) -

With pubs in lockdown, Hotel Property has reached a commercial agreement with its major tenant, Queensland Venue, which represents around 84% of income. As a result, a portion of rent will be deferred.

Given the increased certainty around the terms, Morgans reduces the discount applied to the stock to -10% from -20%.

Morgans retains a Hold rating and raises the target to $2.82 from $2.58.

Target price is $2.82 Current Price is $2.59 Difference: $0.23
If HPI meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

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 IAP as Upgrade to Accumulate from Hold (2) -

Ord Minnett updates forecasts, following the FY20 result. The business is considered able to withstand the uncertainty associated with the pandemic as it has low gearing and there should be high tenant retention.

Rating is upgraded to Accumulate from Hold while the target is steady at $1.20. The Investec property fund has restructured its debt facilities, securing a new 10-year fixed-rate facility and extending bank facilities.

The hedge book has also been re-set at a cost of -$27m for terminating out-of-the-money hedge positions.

Target price is $1.20 Current Price is $1.10 Difference: $0.1
If IAP meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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

Credit Suisse rates IPL as Outperform (1) -

Credit Suisse expects Incitec Pivot will withstand the current environment better than Orica ((ORI)) because its regional exposure is mainly Australia, PNG and North America.

The first half result is expected to provide more clarity on the debt position.

The broker highlights the risk of rising US gas costs as additional risk to consider in the second half. Outperform maintained. Target is reduced to $3.72 from $3.78.

Target price is $3.72 Current Price is $2.19 Difference: $1.53
If IPL meets the Credit Suisse target it will return approximately 70% (excluding dividends, fees and charges).

Current consensus price target is $2.95, suggesting upside of 34.9% (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 IVC as Buy (1) -

With operating earnings declining by -10.7%, InvoCare had a weaker than expected first quarter, notes Citi.

Citi has reduced FY20 earnings forecast by -12% mostly to account for the weak first quarter but expects the share price to increase with the gradual ease in lockdown measures.

Overall, the business is stable and the broker reiterates Buy with target price at $12.75.

Target price is $12.75 Current Price is $10.98 Difference: $1.77
If IVC meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $12.54, suggesting upside of 14.2% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates IVC as Hold (3) -

The trading update at the AGM has indicated operating earnings (EBITDA) in the first quarter are running below Ord Minnett's forecasts because of higher costs.

The short-term outlook for volumes is increasingly uncertain, given a heightened focus on social distancing, personal hygiene and the likely increase in the take-up of the influenza vaccine this year.

Ord Minnett retains a Hold rating and $12.50 target.

Target price is $12.50 Current Price is $10.98 Difference: $1.52
If IVC meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $12.54, suggesting upside of 14.2% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates LNK as Accumulate (2) -

As the company has a high level of debt as well as pressure on many of its divisions, and appears determined not to raise equity capital, Ord Minnett assesses dividends are likely to be at the lower end of the historical range.

Link Administration's retirement and superannuation solutions business is experiencing increased member activity from switching, as well as the early super access initiative. Early redemptions are expected to result in meaningful losses in accounts, which would be negative for Link Administration.

There are benefits from increased capital raisings, but there is lower revenue from a decrease in asset values, Ord Minnett assesses. The broker retains an Accumulate rating and reduces the target to $4.61 from $5.75.

Target price is $4.61 Current Price is $3.65 Difference: $0.96
If LNK meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $4.75, suggesting upside of 30.2% (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 MCR as Initiation of coverage with Outperform (1) -

The broker has "initiated" coverage of Mincor Resources, having ceased coverage in 2016. Nickel mining in Kambalda is set to resume in FY22 with a planned multi-mine restart, underpinning a 15ktpa five-year production restart.

The broker believes material upside is on offer from the restart through exploration and remnant resource conversion. Outperform, target 85c.

Target price is $0.85 Current Price is $0.66 Difference: $0.19
If MCR meets the Macquarie target it will return approximately 29% (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

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

Credit Suisse continues to believe Macquarie Group is a quality business but there are multiple headwinds over the short-term around transaction volumes, asset realisations and the potential for further impairments.

Earnings estimates are modestly downgraded by -6%, attributed to lower activity following the impact of the pandemic.

Rating is downgraded to Neutral from Outperform as the share price is up in excess of 40% since mid March. Target is reduced to $107.50 from $110.00.

Target price is $107.50 Current Price is $111.88 Difference: minus $4.38 (current price is over target).
If MQG meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $116.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Overweight (1) -

Morgan Stanley observes asset realisations will be slower in FY21 and commodity revenue remains uncertain. Still, the focus on impairments overlooks some impressive statistics in Macquarie Asset Management, in the broker's view.

Despite the bear equity market, this division grew 8% half-on-half or 4% ex acquisitions. Second half base fees also grew around 20%. The broker considers the guidance for flat FY21 base fees is conservative.

Overweight rating and In-Line industry view. Target is raised to $120 from $115.

Target price is $120.00 Current Price is $111.88 Difference: $8.12
If MQG meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $116.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Add (1) -

FY20 net profit was softer than expected, largely because of higher impairments. Morgans downgrades FY21 and FY22 estimates for earnings per share by -22% and -11%, respectively, because of the current economic conditions.

In the short term, earnings pressures are likely but the broker considers the business well-positioned to ride out the current storm and seize opportunities afterwards.

Value is still envisaged in the stock and an Add rating is maintained. Target is reduced to $121.50 from $140.40.

Target price is $121.50 Current Price is $111.88 Difference: $9.62
If MQG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $116.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Buy (1) -

FY20 cash net profit was slightly below Ord Minnett's forecast. As expected, no FY21 guidance was provided. Nevertheless, the broker considers the group is well situated for what is likely to be a challenging year.

Uncertainty is likely to drag on FY21 and the company clearly expects activity to slow further. Hence, Ord Minnett softens short-term forecasts, expecting a drop in net profit of -10% in FY21 on higher impairments, lower performance fees and lower gains on sale.

Buy rating retained. Target rises to $120 from $112.

Target price is $120.00 Current Price is $111.88 Difference: $8.12
If MQG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $116.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in March.

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 MQG as Neutral (3) -

FY20 results were broadly in line with expectations. Macquarie Group has halved its second half dividend and will offset this by raising additional equity.

This will provide additional capital should the global economy deteriorate further.

Moreover, UBS assesses Macquarie Group may be able to take advantage of investment opportunities in the current downturn and support the next leg of growth.

However, the broker is mindful that the current travel restrictions make cross-border acquisitions more difficult to bed down. Neutral rating and $105 target.

Target price is $105.00 Current Price is $111.88 Difference: minus $6.88 (current price is over target).
If MQG meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $116.25, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in March.

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 NWS as Outperform (1) -

Operating earnings (EBITDA) were ahead of Credit Suisse estimates in the third quarter. Good cost controls were in evidence at News and Information Services.

While advertising revenue at Dow Jones declined more than -20% in April, the broker notes this was significantly better than peers.

Any change in consumer habits that increases the take-up of digital subscriptions can have longer-term structural benefits for news, while the decline in advertising revenue is likely to be more cyclical and come back in time, Credit Suisse assesses.

Outperform rating maintained. Target is reduced to $22.60 from $22.70.

Target price is $22.60 Current Price is $17.35 Difference: $5.25
If NWS meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $22.37, suggesting upside of 29.0% (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: 0.5

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

Macquarie rates NWS as Outperform (1) -

News Corp's earnings were down -2% year on year in the March quarter, ahead of the broker's expectation, with only a small virus impact noted.

The virus will nonetheless drive more intensity around business review and cost-out programs, the broker notes.

No additional funding injection for Foxtel is planned for 12 months, while there may be an opportunity to reduce sports rights costs.

Valuation continues to be underpinned by the REA Group ((REA)) stake, as well as Move, Books and Dow Jones. Outperform and $22.52 target retained.

Target price is $22.52 Current Price is $17.35 Difference: $5.17
If NWS meets the Macquarie target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $22.37, suggesting upside of 29.0% (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: 0.5

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

Morgan Stanley rates NWS as Underweight (5) -

Of note, in the third quarter results the carrying value of Foxtel has been written down to US$900m from US$1.9bn. This is consistent with Morgan Stanley's view of the structural and competitive challenges facing the business.

There are no plans to extend further capital to Foxtel. The broker envisages earnings risk for News Corp will be more acute in the fourth quarter as the pandemic impact worsens.

Underweight rating and US$10 target maintained. Industry view: Attractive.

Current Price is $17.35. Target price not assessed.

Current consensus price target is $22.37, suggesting upside of 29.0% (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: 0.5

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

UBS rates NWS as Buy (1) -

UBS found the third quarter results solid, noting all businesses are embarking on cost reduction programs. The company has moved faster than the broker expected on cost savings, although operating trends in April still deteriorated.

The impact of the pandemic remains highly uncertain. Buy rating maintained. Target is $22.

Target price is $22.00 Current Price is $17.35 Difference: $4.65
If NWS meets the UBS target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $22.37, suggesting upside of 29.0% (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: 0.5

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

Citi rates ORA as Neutral (3) -

Orora recently revealed the capital distribution path of the fibre business sales proceeds, with plans to distribute $600m through capital return and special dividends. The company expects covid-19 related headwinds mostly from the North American segment in the second half. 

The broker feels Orora's already strong balance sheet would be aided by retention of additional sales proceeds post-capital returns, but looks for more clarification on the path to normalisation in the US post lock-down and defensiveness of the Australasian glass and metal segment in the wake of weaker wine exports.

Neutral rating retained with target price unchanged at $3.

Target price is $3.00 Current Price is $2.45 Difference: $0.55
If ORA meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $2.74, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

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

Credit Suisse rates ORA as Neutral (3) -

Orora has announced distributions of $600m, less than half the proceeds from the fibre business sale. Credit Suisse notes its previous message indicated that most would be distributed by FY20.

The reasons this has not eventuated, the broker assesses, stem from the pandemic and the focus on debt, while the Owens Illinois glass divestment appears to have stalled.

The broker considers it likely further capital management will be on hand in FY21 and retains a $200m share buyback in its modelling.

FY20 estimates for earnings per share are downgraded -5%. Rating stays at Neutral while the target is raised to $2.25 from $2.15.

Target price is $2.25 Current Price is $2.45 Difference: minus $0.2 (current price is over target).
If ORA meets the Credit Suisse target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.74, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates ORA as Overweight (1) -

In a market where yield is hard to come by, Morgan Stanley expects the announcement of a $600m capital return is likely to be a positive catalyst. Orora has announced the first stage of its capital management following the sale of Australasian Fibre.

There will be $450m in special dividends, franked at 50%, and a $150m capital return, subject to shareholder approval.

The remaining proceeds will be used to pay down debt and pursue growth investment opportunities, with the potential for further returns if these do not arise.

Overweight. Target is $3.50. Sector view is Cautious.

Target price is $3.50 Current Price is $2.45 Difference: $1.05
If ORA meets the Morgan Stanley target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $2.74, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates ORA as Hold (3) -

Following completion of the sale of the Australasian fibre business, Orora will return $600m to shareholders.

Challenging markets are still expected to persist for the remainder of FY20, particularly in North America where the company has exposure to the retail, entertainment, convenience and manufacturing segments.

Morgans decreases FY20 and FY20 earnings (EBIT) estimates by -10% and -15%, respectively. The broker retains a Hold rating and reduces the target to $2.33 from $3.15.

Target price is $2.33 Current Price is $2.45 Difference: minus $0.12 (current price is over target).
If ORA meets the Morgans target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.74, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

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 ORA as Hold (3) -

Orora has confirmed it will distribute $600m in capital management as a result of the sale of the fibre business. Ord Minnett reduces FY20 forecasts for earnings per share by -11%, as the pandemic has weighed heavily on the North American division.

While valuation metrics are undemanding, the broker is unsure of the path for growth amid limited opportunities in Australasia and North America. Hold maintained. Target is reduced to $2.65 from $3.10.

Target price is $2.65 Current Price is $2.45 Difference: $0.2
If ORA meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $2.74, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates ORA as Neutral (3) -

Orora has indicated it will return $600m to shareholders from the sale of the fibre business. This is half the amount previously indicated for return.

The company has, instead, retained the flexibility to pursue growth while also highlighting a tightening of liquidity in debt markets amid uncertainty over the pandemic.

UBS suspects Orora will prioritise global glass & can packaging assets over a further consolidation of the North American distribution market.

Neutral maintained. Target is $2.67.

Target price is $2.67 Current Price is $2.45 Difference: $0.22
If ORA meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.74, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates ORI as Buy (1) -

Mining disruptions from Covid-19 have led Orica to anticipate a fall in FY20 volumes by -300kt, with conditions expected to normalise by year-end.

Indicating a weaker second half volume outlook, Citi has cut FY20 to FY22 earnings estimates by -2% to -17% while forecasting FY21 operating earnings to increase by 12% to $696m.

The broker notes Orica commands a dominant position in the explosives sector with the company’s earnings globally diversified and backed by multi-year contracts.

Buy retained with target price reduced to $18.30 from $19.40.

Target price is $18.30 Current Price is $16.08 Difference: $2.22
If ORI meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

Credit Suisse rates ORI as Neutral (3) -

The size of the downgrade to volume guidance surprised Credit Suisse, with mining affected significantly in March. On balance, the broker suggests the company has sufficiently re-based expectations for the second half.

Previous expectations of pricing upside may need to be push back to 2022, the broker suggests.

A reduction in the interim dividend in the first half appears to be a temporary measure, with potential "catch-up" in the final dividend depending on the current earnings outlook.

There is sufficient funding headroom to see the company through. Credit Suisse retains a Neutral rating on the basis of market uncertainty. Target is reduced to $17.06 from $18.21.

Target price is $17.06 Current Price is $16.08 Difference: $0.98
If ORI meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

Macquarie rates ORI as Outperform (1) -

Orica's first half result was broadly in line with expectation. A 16.5c dividend is below the broker's 22c forecast and at the low end of the payout range, reflecting conservatism at this time.

Volume growth guidance is weaker than expected for the second half, but the broker believes the market is looking through to a more "normal" FY21.

The Burrup restart is encouraging, and the company is leveraged to a global recovery, with a strong balance sheet. Target falls to $19.69 from $21.51, Outperform retained.

Target price is $19.69 Current Price is $16.08 Difference: $3.61
If ORI meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

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

First half results were broadly in line with Morgan Stanley's expectations although management has signalled that the impact of the pandemic is worse than previously anticipated.

Still, Morgan Stanley likes the industry structure and quality of the business and believes the disruptions are largely short term in nature.

Equal-weight maintained. Target is raised to $19 from $18. Industry view is Cautious.

Target price is $19.00 Current Price is $16.08 Difference: $2.92
If ORI meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

Morgans rates ORI as Hold (3) -

First half results were slightly ahead of expectations. Morgans makes material revisions to forecasts and suspects the outlook could get worse before it gets better.

Hence, the broker retains a Hold rating. FY20 earnings (EBIT) forecasts are lowered by -11.8%.

A more gradual recovery in ammonium nitrate volumes is expected given the economic downturn and the fact US coal volumes are likely to remain under pressure. Target is reduced to $15.55 from $17.30.

Target price is $15.55 Current Price is $16.08 Difference: minus $0.53 (current price is over target).
If ORI meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

Ord Minnett rates ORI as Hold (3) -

First half results were lower than Ord Minnett expected. The main issue is the global outlook for ammonium nitrate volumes as demand has been affected by mine closures.

The broker considers this, along with increased capital expenditure, as sufficient reason to remain on the sidelines. Communication about Burrup is also a primary area of disappointment for the broker.

The premium in the stock is considered unwarranted and Ord Minnett retains a Hold rating. Target is lowered to $16.75 from $17.80.

Target price is $16.75 Current Price is $16.08 Difference: $0.67
If ORI meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

UBS rates ORI as Buy (1) -

First half results were "solid", UBS suggests. There were larger-than-expected volume losses attributed to the NSW bushfires and -$14m in costs relating to increased east coast gas prices and Burrup arbitration fees.

UBS reduces FY20 forecasts for earnings (EBIT) by -7%, taking a more conservative view on the impacts of the pandemic on global mining demand.

The broker notes, however, there has been no impact on Orica's highest margin volumes in Australia. Buy rating maintained. Target is reduced to $20.75 from $21.38.

Target price is $20.75 Current Price is $16.08 Difference: $4.67
If ORI meets the UBS target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $18.16, suggesting upside of 12.9% (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

Credit Suisse rates PTM as Underperform (5) -

Funds under management as at the end of April were up 1.0%, driven by positive market movements and partially offset by net outflows.

Credit Suisse notes improving retail flows, and increases estimates for earnings per share by 1% in FY20 and 10% for FY21-22.

Industry flows appear not as negative as previously expected. However, the fund performance remains underwhelming for the broker.

Underperform maintained. Target is raised to $3.15 from $2.65.

Target price is $3.15 Current Price is $3.76 Difference: minus $0.61 (current price is over target).
If PTM meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.95, suggesting downside of -21.4% (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

Morgans rates PWH as Add (1) -

The pandemic is having a negative impact on revenue, with a noticeable slowdown in forward orders over the past 4-6 weeks, but Morgans assesses the company is managing its cost prudently.

Production has re-started at some facilities and the NASCAR and Formula One are also looking to recommence in the near future.

The broker reduces FY20 operating earnings (EBITDA) estimates by -17% but makes no changes to FY21 forecasts. Add maintained. Target is reduced to $4.70 from $5.10.

Target price is $4.70 Current Price is $3.66 Difference: $1.04
If PWH meets the Morgans target it will return approximately 28% (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

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

Revenue growth in the third quarter was lower than Credit Suisse expected. Residential revenue was broadly flat on a -7% decline in national listings.

The broker continues to expect a recovery in volumes from the low point over the next few months but, given the recent rally, believes this is appropriately priced.

Hence, rating is downgraded to Neutral from Outperform and the target lowered to $94.50 from $94.80.

Target price is $94.50 Current Price is $93.71 Difference: $0.79
If REA meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $98.39, suggesting upside of 5.0% (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 REA as Downgrade to Neutral from Outperform (3) -

REA Group posted a solid March quarter, Macquarie notes, featuring a return to revenue growth and an 8% increase in earnings. The virus impact will be felt in the June quarter, hence the company will lower its operational expense to provide at least some offset.

REA is highly leveraged to a rebound in listings, has a strong balance sheet and good cost discipline, the broker suggests. But the stock is now trading around fair value following a 41% run-up from the March low. Downgrade to Neutral from Outperform. Target rises to $95 from $90.

Target price is $95.00 Current Price is $93.71 Difference: $1.29
If REA meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $98.39, suggesting upside of 5.0% (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 REA as Overweight (1) -

Morgan Stanley believes REA Group is a structural growth story, now more than ever. The main test for the business trajectory will be delivered as auction activity recommences in Sydney and Melbourne over the next month or so.

The broker remains fundamentally positive on a 12-month view and retains an Overweight and $105 target. Industry view: Attractive.

Target price is $105.00 Current Price is $93.71 Difference: $11.29
If REA meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $98.39, suggesting upside of 5.0% (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 REA as Hold (3) -

Third quarter results were slightly better than Morgans expected. Forecasts are raised to reflect the cost controls the company has announced, amid plans to take out -20% of underlying costs over the short term.

The broker acknowledges the company has significant pricing power. The changes lift the valuation and the target increases to $95.83 from $86.93. A Hold rating is maintained as the stock appears fully priced.

Target price is $95.83 Current Price is $93.71 Difference: $2.12
If REA meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $98.39, suggesting upside of 5.0% (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

Ord Minnett rates REA as Accumulate (2) -

Listings volumes were down -7% in the third quarter and revenue was below Ord Minnett's forecasts. The broker now forecasts FY20 revenue of $801.6m, down -8.4%.

However, volumes appear to have troughed in April and are better than feared, particularly as restrictions on home inspections have started to ease. Accumulate retained. Target rises to $100 from $88.

Target price is $100.00 Current Price is $93.71 Difference: $6.29
If REA meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $98.39, suggesting upside of 5.0% (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

UBS rates REA as Buy (1) -

UBS found the third quarter update positive as the company will reduce costs by -20% and the slump in listings appears to be better than some bear case scenarios.

However, the broker suggests the fourth quarter may be even messier, as some of the offerings and initiatives outlined in March will delay revenue recognition into the future. Buy rating and $100 target maintained.

Target price is $100.00 Current Price is $93.71 Difference: $6.29
If REA meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $98.39, suggesting upside of 5.0% (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 SGM as Buy (1) -

After withdrawing its first-half earnings guidance, Sims Metal Management has seen some stabilisation in scrap prices, albeit at lower levels, points out broker Citi.

Citi expects lower scrap prices to impact margins and volumes and has accordingly reduced FY20 and FY21 volume forecasts by -4% and -3% to 8.9mt and 9.4mt. The broker expects an operating loss of -$68m in FY20 and no final dividend for the year. 

Scrap prices will recover, predicts the broker, with the company’s well-established North America Metals (NAM) and Australian operations providing some respite in terms of stable profits in the long run.

Buy reaffirmed with a reduced target price of $9.50.

Target price is $9.50 Current Price is $6.73 Difference: $2.77
If SGM meets the Citi target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $9.02, suggesting upside of 34.0% (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

Citi rates SHL as Buy (1) -

Data covering markets that form 90% of Sonic Healthcare’s revenues indicate a material impact from covid-19 in April, remarks Citi. Corroborating this are data from Sonic Healthcare’s competitors in the US and European markets which also saw material dips in their April revenues.

In Australia, this revenue decline translated to about -30% for both pathology and diagnostic imaging for April with volumes gradually recovering in May, notes Citi. The broker feels the Australian businesses, which form about 35% of company revenues, will recover more quickly than the international divisions.

The broker reminds investors the business is critical to national infrastructure and expects some recovery in May.? Citi maintains Buy with target price unchanged at $32.50.

Target price is $32.50 Current Price is $26.55 Difference: $5.95
If SHL meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $27.48, suggesting upside of 3.5% (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 SXL as Resumption of coverage with Outperform (3) -

The broker has returned from restriction, post capital raising, with an Outperform rating on Southern Cross Media (previously Neutral) and an 18c target (70c).

The raising has de-risked the balance sheet, and operational initiatives and Job Keeper will materially mitigate near-term revenue headwinds, the broker suggests.

The broker is forecasting -35% and -79% falls in earnings in FY20-21. From this re-base, the valuation is seen as attractive given operating leverage to a normalisation of ad markets.

Target price is $0.18 Current Price is $0.17 Difference: $0.01
If SXL meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 151.0% (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

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

The company and its banks have agreed that current funding facilities are sufficient to cover the short term. From an operating perspective, IVF treatment in Australia resumed on April 27 and diagnostics are increasing as staff and operations return to more normal levels.

A gradual return to normal activity is anticipated over the next six months. Morgans upgrades to Add from Hold, assessing there is more than 10% upside in the stock. Target is raised to $3.17 from $3.04.

Target price is $3.17 Current Price is $3.39 Difference: minus $0.22 (current price is over target).
If VRT meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

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

Morgans rates VUK as Hold (3) -

First half net profit was below forecasts and, as Morgans expected, no interim dividend was declared. No final dividend is expected either.

Underlying estimates for earnings per share are downgraded by -18% and -37% for FY20 and FY21, respectively.

The company has downgraded its net interest margin and cost guidance and the broker also envisages downward pressure on revenue from no loan growth over the next 12 months.

Most of the transformation programs, such as branch closures and redundancies, are being delayed. Hold maintained. Target is $1.44.

Target price is $1.44 Current Price is $1.55 Difference: minus $0.11 (current price is over target).
If VUK meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.80, suggesting upside of 15.8% (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: 0.3

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

UBS rates Z1P as Buy (1) -

Sales growth in April was firm although the company provided no update to guidance. There was an increase in bad debts but the magnitude suggests to UBS that credit risks are under control.

Moreover, the repayment rate has increased to 15% of receivables in April from 12% in March. The company has also likely benefited from Australian government initiatives. Buy rating maintained. Target is $3.30.

Target price is $3.30 Current Price is $3.49 Difference: minus $0.19 (current price is over target).
If Z1P meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.06, suggesting downside of -12.4% (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