Australian Broker Call

Morgans rates ADH as Add (1) -

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

As a home wares retailer, Adairs has certainly benefited from covid-19 like most others, notes Morgans. It's considered that the company didn't attract the premium valuation of peers.

The broker retains the Add rating, but cautions this is a long-term call and out-performance is unlikely while vaccine noise is loud. Additionally, from the fourth quarter there will be tougher comparisons to the previous corresponding period, warns the analyst.

The Add rating is unchanged and the target price is decreased to $3.92 from $4.35.

Target price is $3.92 Current Price is $3.19 Difference: $0.73
If ADH meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates AUB as Outperform (1) -

Broking trends have driven a modest upgrade to FY21 guidance, with underlying net profit now expected to be $60-62m.

Credit Suisse observes the main driver has been more insured volumes rather than the quantum of premium rate inflation.

The broker suspects the updated guidance builds in some conservatism for the remainder of the year and the upgrade may have been larger but for the lingering pressures in the underwriting business.

Credit Suisse assesses the industry is in a solid position and insured volumes have proven to be more resilient than previously feared. Outperform retained. Target rises to $18.25 from $16.00.

Target price is $18.25 Current Price is $16.98 Difference: $1.27
If AUB meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates AX1 as Downgrade to Hold from Add (3) -

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Accent Group is yet to provide a trading update post its FY20 result (due at the AGM). Morgans expects trading outside of Melbourne has remained robust, with online the major driver.

Nonetheless, as a discretionary retailer, the broker expects the stock's ability to outperform will be limited from here.

The rating is decreased to Hold from Add. The target price is decreased to $1.67 from $1.84

Target price is $1.67 Current Price is $1.65 Difference: $0.02
If AX1 meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.76, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Baby Bunting benefited more from covid-19 than the broker anticipated. The company's products are far less discretionary than the rest of Morgans retail coverage.

Nonetheless, the analyst downgrades to Hold from Buy on the elevated price earnings multiple versus vaccine sentiment only. Morgans still thinks the group looks very well positioned over the long term.

The price target is decreased to $4.84 from $5.23.

Target price is $4.84 Current Price is $4.49 Difference: $0.35
If BBN meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.99, suggesting upside of 12.5% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

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

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Beacon Lighting was a major beneficiary of covid-19 via in-home spending and Morgans still sees upside risk to FY21 earnings.

Nonetheless, from the fourth quarter the group will cycle elevated comparisons to prior corresponding periods.

The rating is downgraded to Hold from Add and the target price is decreased to $1.50 from $1.73.

Target price is $1.50 Current Price is $1.39 Difference: $0.11
If BLX meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

With Beach Energy planning to drill two exploration wells in the Otway basin, followed by the Artisan project, Morgan Stanley tries to gauge volume production. The company stated volumes will be in-line with the pre-drill estimates although did not delve into the specifics. 

The broker assumes production of 100bn cubic feet (bcf) which translates to $800m in revenue over the life of the project. 

Morgan Stanley maintains its Equal-weight rating with a target price of $1.50. Industry view: Cautious.

Target price is $1.50 Current Price is $1.44 Difference: $0.06
If BPT meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.89, suggesting upside of 24.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Citi rates BSL as Neutral (3) -

BlueScope Steel has upgraded first half earnings (EBIT) guidance to $380m following the sale of an industrial warehouse property.

The upgrade of $40m to the October 23 guidance signals an unusually large contribution from the sale, Citi asserts, and will not be repeated in the second half.

The broker expects FY22 EBIT to be modestly lower than FY21, at $721m, as US steel price momentum eases and imports become competitive again. Neutral retained. Target is $16.

Target price is $16.00 Current Price is $16.20 Difference: minus $0.2 (current price is over target).
If BSL meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.41, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Macquarie rates BSL as Outperform (1) -

BlueScope Steel's Buildings North America division has sold a warehouse it built for A$40m. This will increase first half earnings and implies a lift to guidance, the broker notes.

Target rises to $19.10 from $19.05, Outperform retained.

Target price is $19.10 Current Price is $16.20 Difference: $2.9
If BSL meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $16.41, suggesting downside of -0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Citi rates CHC as Buy (1) -

Citi expects a pick up in transaction activity ahead of Christmas as vendors look to finalise sales. This could drive upside to assets under management.

The broker also assesses less downside to office values amidst low interest rates and investor appetite holding up, particularly offshore.

Citi maintains a Buy rating and raises the target to $14.75 from $13.50.

Target price is $14.75 Current Price is $13.14 Difference: $1.61
If CHC meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $12.96, suggesting downside of -6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates CIA as Outperform (1) -

Champion Iron continues to benefit from strong iron ore prices and falling freight rates, the broker notes. With the proposed Bloom Lake phase 2 expansion a significant near-term catalyst, the broker suggests the project can be funded from cash flow.

Target rises to $4.40 from $3.80, Outperform retained.

Target price is $4.40 Current Price is $3.99 Difference: $0.41
If CIA meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

This company reports in CAD. 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

Morgans rates CKF as Add (1) -

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Collins Foods is likely to benefit from a return to 'normality' and the broker rolls forward valuations to reflect more normalised earnings years. Earnings risk (upside and downside) is considered to be a key focus, particularly regarding FY22.

The Add rating is unchanged and the target price is increased to $10.80 from $10.23.

Target price is $10.80 Current Price is $9.75 Difference: $1.05
If CKF meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in May.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgan Stanley rates COH as Overweight (1) -

Morgan Stanley's discussion with a cochlear implant audiologist based in the US shows things seem to be going back to pre-covid levels. Most of the patients who had postponed their implant procedures have since gone through with it.

Also, it looks like Cochlear products are preferred due to their better physical appearance, off the-ear processor (Kanso 2) and better patient connectivity. 

Overweight retained with a target price of $229. Industry view: In-line.

Target price is $229.00 Current Price is $223.37 Difference: $5.63
If COH meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $206.05, suggesting downside of -9.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates COL as Neutral (3) -

In a response to the response to the vaccine news with regard consumer stocks, Macquarie suggests that while virus winners will have a positive 2020, consumer behaviour will return to normal in 2021. To that end the broker has reverted to pre-covid sum-of-the-parts valuations.

Coles' target is lowered to $18.30 from $18.70. Neutral retained. The broker has not provided earnings/dividend forecast updates.

Target price is $18.30 Current Price is $17.69 Difference: $0.61
If COL meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $19.58, suggesting upside of 9.5% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates CQR as Outperform (1) -

Charter Hall Retail REIT has provided first half guidance ahead of the broker's forecast driven by better than expected cash (rent) collection. The interim dividend is guided to 10.7c, with the final expected by management to be larger.

While the stock has rallied solidly of late, the broker retains Outperform and a $3.86 target, noting an attractive 6.5% yield in the low rate environment and no change of occupancy in the period.

Target price is $3.86 Current Price is $3.84 Difference: $0.02
If CQR meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.38, suggesting downside of -13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Citi rates CSL as Downgrade to Neutral from Buy (3) -

Citi now assumes plasma collections return to pre-pandemic levels from January 2021 and, with the 6-7 month lead time for production, the earnings impact will be spread over FY21 and FY22.

The broker eases back on forecast declines in earnings per share for FY21-22, and as the stock has outperformed the ASX200 by 16% over the year to date, downgrades to Neutral from Buy. Target is reduced to $320 from $325.

Target price is $320.00 Current Price is $304.60 Difference: $15.4
If CSL meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $314.96, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

Ord Minnett rates CSL as Upgrade to Accumulate from Hold (2) -

Encouraging news regarding a covid-19 vaccine provides a two-fold boost to the outlook for CSL, in the opinion of Ord Minnett.

Plasma collections should normalise by the end of FY21, allowing a potential boost to nearer-term sales from a larger inventory release, explains the broker.

The analyst believes the vaccine candidates the company is manufacturing now appear more likely to succeed, based on the similar antibody profiles. This is considered to raise the potential for a new multi-year revenue stream.

The company began production of the AstraZeneca/Uni Oxford vaccine this week at its Melbourne facility. The broker expects the company will be paid for these initial doses irrespective of whether the vaccine is successful.

Ord Minnett raises the target price to $330 from $290, leading the broker to upgrade the recommendation to
Accumulate from Hold.

Target price is $330.00 Current Price is $304.60 Difference: $25.4
If CSL meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $314.96, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.4

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

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

A strong listings recovery in Sydney provided a favourable first quarter for Domain Holdings and Credit Suisse notes reliance on the Sydney market was evident in October volumes.

October volumes were more subdued nonetheless and the broker lowers first half digital revenue growth estimates to 4.1%. Management has also guided to a -12% reduction to the first half cost base.

Credit Suisse downgrades to Neutral from Outperform, given the limited upside from current trading levels. Target is raised to $4.40 from $4.00.

Target price is $4.40 Current Price is $4.30 Difference: $0.1
If DHG meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $3.91, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgans rates DHG as Hold (3) -

The AGM update for Domain Holdings highlights to Morgans impressive growth in residential depth revenue.

Despite the strong residential depth performance, the broker notes overall digital revenue is up a modest 4% over January-October, mainly due to weaker commercial and developer and media display markets.

The company's continued investment sees like-for-like costs (ex benefits of JobKeeper and Project Zipline) expected to be roughly flat in the first half, highlights the analyst. 

Morgans feels some of the spend on product development and systems is necessitated by the traffic and monetisation gap the company has to its largest competitor.

The Hold rating is unchanged and the target is increased to $3.97 from $3.32.

Target price is $3.97 Current Price is $4.30 Difference: minus $0.33 (current price is over target).
If DHG meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.91, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Ord Minnett rates DHG as Hold (3) -

Domain Holdings provided a trading update at its AGM, which Ord Minnett considers was a positive for depth penetration (that reached a national record). This is despite print revenues being severely affected by the Victorian covid-19 restrictions.

The company guided for total costs (adjusting for divestments) to fall -12% in the first half.

The broker increases the FY21 earnings forecast by 0.7% due to higher-than-expected depth revenues. Consequently, the target price is increased to $3.85 from $3.50.

The rating of Hold is unchanged on valuation grounds. The analyst notes the price to earnings (PE) and enterprise value to operating earnings (EV/EBITDA) multiples are stretched relative to historical averages.

Target price is $3.85 Current Price is $4.30 Difference: minus $0.45 (current price is over target).
If DHG meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.91, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

UBS rates DHG as Neutral (3) -

In the latest update, Domain Holdings Australia reported revenue growth for the four months till October to be -7% with the digital segment revenue up 4%. This is in-line with UBS's forecast and the broker has decided to keep its FY21 numbers broadly unchanged.

With management executing on yield/depth/new product levers and with more confidence in a rebound in listing volumes, UBS has increased its long-term revenue and margins slightly. 

Neutral rating is retained with the target price increasing to $4.25 from $3.60.

Target price is $4.25 Current Price is $4.30 Difference: minus $0.05 (current price is over target).
If DHG meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.91, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates DMP as Downgrade to Underperform from Neutral (5) -

In a response to the response to the vaccine news with regard consumer stocks, Macquarie suggests that while virus winners will have a positive 2020, consumer behaviour will return to normal in 2021. To that end the broker has reverted to pre-covid sum-of-the-parts valuations.

Domino's Pizza's target is lowered to $72.10 from $84.30. Downgrade to Underperform from Neutral.

The broker has not provided earnings/dividend forecast updates.

Target price is $72.10 Current Price is $77.76 Difference: minus $5.66 (current price is over target).
If DMP meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.36, suggesting downside of -7.4% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.6

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

Credit Suisse rates FBU as Neutral (3) -

The trading update was well ahead of Credit Suisse expectations, with the cost-cutting program more successful and demand more robust.

Credit Suisse now expects first half EBIT of NZ$302m and anticipates the current momentum will continue for a period.

The main risk is that cost reductions disrupt some of the good business and pose risks to earnings post FY21.

Management is reluctant to commit to a first half dividend as some debt covenant relief would need to be forgone. If no first half dividend is declared, management has also indicated the second half payment could have a little extra.

Neutral maintained. Target is raised to NZ$4.91 from NZ$4.03.

Current Price is $4.87. Target price not assessed.

Current consensus price target is $5.91, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.2

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

Macquarie rates FBU as Neutral (3) -

The broker found Fletcher Building's first half update encouraging but messy. Management has signalled $150m per annum of permanent cost savings but the broker wants to see evidence. Execution risk remains around large scale NZ capex.

If the company can find a way to its 6% earnings margin target by FY24, the broker would add $1.00 per share to valuation, but is currently forecasting 3.4%. Neutral retained, target rises to NZ$4.94 from NZ$4.06.

Current Price is $4.87. Target price not assessed.

Current consensus price target is $5.91, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.2

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

Morgan Stanley rates FBU as Upgrade to Overweight from Equal-weight (1) -

Fletcher Building's trading update for the four months ending October showed better revenue and operating income than last last year with improvement seen in margins across all business units.

Morgan Stanley believes the strong performance is an indication of the resilience of the New Zealand market and has increased its operating income forecast for FY21 by 66% with the estimate for FY22 increased by 46%.   

Morgan Stanley upgrades its rating to Overweight from Equal-weight with the target rising to $5.91 from $3.66. Industry view is Cautious.

Target price is $5.91 Current Price is $4.87 Difference: $1.04
If FBU meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $5.91, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.2

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

UBS rates FBU as Neutral (3) -

For the 4 months ended October, Fletcher Building's operating income was up 55% versus last year led by revenue growth and margin expansion. Resilient activity levels in both New Zealand and Australia helped the case, remarks UBS.

New Zealand's core operating income was up due to solid growth across all categories (concrete, building products and distribution). Construction was on the lower side, notes the broker, due to the seasonally low period for civil construction activity.

Fletcher Building did not provide any FY21 guidance on account of macro-economic uncertainties.

Neutral rating is under review with a target of NZ$3.50.

Current Price is $4.87. Target price not assessed.

Current consensus price target is $5.91, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.2

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

Citi rates FLT as Neutral (3) -

Citi believes the increased likelihood of a widely-available vaccine for coronavirus in 2021 has pulled forward the recovery of Flight Centre into FY22 and FY23. As a result estimates for these years are increased.

Citi also assesses Flight Centre now has sufficient liquidity to last until December 2022.

The company has announced a $400m convertible bond in addition to refinancing existing debt facilities. Neutral rating retained. Target rises to $16.00 from $14.10.

Target price is $16.00 Current Price is $15.70 Difference: $0.3
If FLT meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $13.94, suggesting downside of -12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Morgan Stanley rates FLT as Overweight (1) -

Flight Centre has announced a $400m convertible note offering and a bank debt refinancing. The noteholders will have the right to convert to the shares on or after 41 business days after issuance at a price between $19.50-$20.66, implying additional shares of 19.4-20.5m, if converted.

Liquidity runway has been extended by circa 4 months to July 2022, calculates Morgan Stanley, after adjusting for cash holding requirement and paying down -$100m in debt.

Morgan Stanley retains its Overweight rating with a target of $15. Industry view is Cautious.

Target price is $15.00 Current Price is $15.70 Difference: minus $0.7 (current price is over target).
If FLT meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.94, suggesting downside of -12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Credit Suisse rates IPL as Outperform (1) -

Credit Suisse observes FY21 is no longer turning out to be a "recovery" year and notes FY20 was one of the first results for some time in which fertiliser pricing didn't figure prominently.

Planned plant maintenance has set a muted backdrop for the first half. Credit Suisse expects mining activity in regions affected by the pandemic should improve and support an earnings recovery in markets that were negatively affected in the second half of FY20.

Despite the unexpected downside in the results, the broker believes the stock has quality value and a pathway to improved profits closer to FY22. Outperform retained. Target is reduced to $2.79 from $3.31.

Target price is $2.79 Current Price is $2.10 Difference: $0.69
If IPL meets the Credit Suisse target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

Incitec Pivot's FY20 underlying profit and earnings fell short of Macquarie's and consensus forecasts. Dyno Americas (explosives) was the biggest source of the miss, with management suggesting a return to normal only post-covid.

We're not yet post-covid, so no dividend was declared due to ongoing uncertainty when the broker had forecast 3.5c. An anticipated earnings recovery has been pushed out to FY22, with FY21 a "transition year", management suggests.

Vaccine news since announced is a positive but coal volumes remain challenging. Macquarie pulls back to Neutral for now from Outperform. Target falls to $2.30 from $2.63.

Target price is $2.30 Current Price is $2.10 Difference: $0.2
If IPL meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

Incitec Pivot's FY20 operating income was up 23% versus last year but -11% less than Morgan Stanley's forecast. While the fertiliser and Dyno Nobel Asia Pacific businesses were in line, Dyno Nobel Americas missed the mark due to decline in coal volumes.

Morgan Stanley is disappointed by the result and notes better commodity prices are the key to more upside for Incitec Pivot.   

Equal-weight rating. Target rises to $2.45 from $2.25. Industry view: Cautious.

Target price is $2.45 Current Price is $2.10 Difference: $0.35
If IPL meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Morgans rates IPL as Add (1) -

The FY20 result for Incitec Pivot was weaker than Morgans had anticipated. 

The broker attributes the miss to the explosives result which showed structural declines in US coal, temporary covid-19 restrictions impacting some of its customers and lower earnings in Indonesia. Also, the re-contracting of Moranbah customers had a negative effect.

While FY21 outlook comments were weaker than expected, the analyst still expects solid earnings growth driven by improved fertiliser prices and a recovery in explosives demand. Additionally, $60m of sustained annual cost savings by FY22 will assist growth.

The company also expects $40-50m of benefits from the Manufacturing Excellence program.

The Add rating is unchanged. The target price increased to $2.50 from $2.35.

Target price is $2.50 Current Price is $2.10 Difference: $0.4
If IPL meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates IPL as Buy (1) -

Incitec Pivot reported a FY20 underlying net profit of $188.2m, -5% below Ord Minnett’s forecast.  Net debt ended the period 6% higher than the broker's estimate.

Ord Minnett's EPS estimates increase by average 13%, related to the share count following an equity raising earlier in the year.

The Buy rating is unchanged and the target increased to $2.70 from $2.60.

Target price is $2.70 Current Price is $2.10 Difference: $0.6
If IPL meets the Ord Minnett target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

UBS rates IPL as Buy (1) -

Incitec Pivot's FY20 operating income at $375m was 23% above last year but circa -7% below UBS's estimate. Lower than expected earnings in Dyno Nobel Americas contributed to the miss. The Dyno Nobel APAC and fertiliser businesses were broadly in-line.

Even with a stronger balance sheet post capital raising, the company decided not to declare a final dividend.

UBS expects FY21 operating income to be $422m led by a recovery in fertiliser prices, strong domestic fertiliser demand volumes and cost-out benefits.

Noting the stock is highly leveraged to a recovery in global fertiliser pricing, UBS retains its Buy rating with a target price of $2.40.

Target price is $2.40 Current Price is $2.10 Difference: $0.3
If IPL meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.51, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

In a response to the response to the vaccine news with regard consumer stocks, Macquarie suggests that while virus winners will have a positive 2020, consumer behaviour will return to normal in 2021. To that end the broker has reverted to pre-covid sum-of-the-parts valuations.

JB Hi-Fi's target is lowered to $49.50 from $54.90.. Downgrade to Neutral from Outperform.

The broker has not provided earnings/dividend forecast updates.

Target price is $49.50 Current Price is $46.46 Difference: $3.04
If JBH meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $47.95, suggesting upside of 7.9% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates JBH as Hold (3) -

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

For JB Hi-Fi, the share price re-rate since mid-February has been outpaced by the quantum of earnings upgrades and the broker sees no need to lower the company's rating (Hold).

The target price is decreased to $41.40 from $48.50.

Target price is $41.40 Current Price is $46.46 Difference: minus $5.06 (current price is over target).
If JBH meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $47.95, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Citi rates JHX as Neutral (3) -

Second quarter results were strong with a boost to cash flow, Citi observes. The company expects to reduce gross debt by -US$400m and reinstate the dividend at the FY21 result.

The company has experienced a broad-based acceleration in volume and sales across all regions to date. Citi expects gross margin headwinds will increase in the third quarter as start-up costs for the commissioning of Prattville begin.

This will then moderate as the annual price increase is pulled forward to January 2021. Neutral retained. Target is raised to $36.35 from $35.45.

Target price is $36.35 Current Price is $36.21 Difference: $0.14
If JHX meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $40.26, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

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

Cash flow has been confirmed as strong in the second quarter, with revenue and earnings having been pre-announced. Credit Suisse notes operating cash flow was already 92% of full FY22 cash flow because of an inventory reduction attributed to customer integration.

Net debt is reduced and the company will pay a full-year equivalent dividend for the final, which the broker estimates at US48c.

Given the earnings revisions over the year to date, Credit Suisse considers the potential for further material upgrades in FY21/22 has diminished. Rating is downgraded to Neutral from Outperform. Target is raised to $39.00 from $38.50.

Target price is $39.00 Current Price is $36.21 Difference: $2.79
If JHX meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $40.26, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

Macquarie rates JHX as Outperform (1) -

The broker describes James Hardie's September quarter as "exemplary" and "quality" with cash flow the highlight, reflecting structural changes in the business model and industry strength. The broker believes the structural demand story remains intact, even with a vaccine.

Forecast growth in US housing starts across the period lifted by 9-11%, target rises to $41.20 from $40.90, Outperform retained on valuation.

Target price is $41.20 Current Price is $36.21 Difference: $4.99
If JHX meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $40.26, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

Morgan Stanley rates JHX as Overweight (1) -

James Hardie confirmed its previous expectations of a strong performance in the second quarter. Morgan Stanley observes the company can reinvest in growth and there is potential to outperform an improving market post the pandemic.

The broker is increasingly confident in a prolonged period of an earnings (EBIT) margin that is well ahead of the 20-25% target.

Overweight rating reiterated. Target rises to $42.00 from $40.50. Industry view is Cautious.

Target price is $42.00 Current Price is $36.21 Difference: $5.79
If JHX meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $40.26, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

Ord Minnett rates JHX as Accumulate (2) -

James Hardie reported a second-quarter FY21 normalised net profit of US$120.5m, which was broadly in-line with Ord Minnett’s US$121m estimate, with most key metrics pre-announced on 14 October.

The broker highlights an impressive cash performance, with operating cash flow rising 104% on the same period last year. Also considered encouraging was the outlook for North America fibre cement (NAFC) pricing.

A trading update was above Ord Minnett's expectations for the third quarter to date across all regions. North America volumes were up in the mid to high teens, Europe revenues up in the double digits, and Asia Pacific (APAC) volumes up in the mid to high single digits.

The broker increases growth forecasts across the board and the FY21 net profit forecast is now above the guidance range of US$380–420m.

The Accumulate rating is unchanged and the target price is increased to $40 from $39.

Target price is $40.00 Current Price is $36.21 Difference: $3.79
If JHX meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $40.26, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

UBS rates JHX as Buy (1) -

UBS lifts its estimate for North American exteriors volume growth to 15%. The broker also expects price growth in the last quarter in the US to be higher than corporate costs led by the demand from work from home and de-urbansiation. 

UBS highlights James Hardie Industries' product offering will broaden in FY22 with the company expanding its exteriors business into new categories like the Stucco market. 

Buy rating retained with a target price of $43.00.

Target price is $43.00 Current Price is $36.21 Difference: $6.79
If JHX meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $40.26, suggesting upside of 7.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.6

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

Morgan Stanley rates KAR as Overweight (1) -

The company has completed the Bauna acquisition for US$385m. A contingent payment of US$285m depends on higher oil prices and Morgan Stanley does not factor this in, given lower oil price forecasts.

Karoon Energy plans to double current production to 25-30,000bopd by the installation of new pumps on existing wells and the development of a smaller field called Patola.

Morgan Stanley assesses the stock offers most leverage to a rising oil price amongst its coverage. Overweight rating retained. Target rises to $1.30 from $1.14. Industry view: Cautious.

Target price is $1.30 Current Price is $0.88 Difference: $0.42
If KAR meets the Morgan Stanley target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $1.39, suggesting upside of 49.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates LOV as Add (1) -

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Lovisa Holdings is likely to benefit from a return to 'normality' and the broker rolls forward valuations to reflect more normalised earnings years. Earnings risk (upside and downside) is considered to be a key focus, particularly regarding FY22.

The Add rating is unchanged and the target price is increased to $10.76 from $8.16.

Target price is $10.76 Current Price is $10.25 Difference: $0.51
If LOV meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $8.55, suggesting downside of -14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

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

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Motorcycle Holdings was a major beneficiary of covid-19 and Morgans still sees potentially material upside to FY21 forecasts. However, the company's products are highly discretionary and a potential redirection of spend is a key risk from current elevated earnings levels.

The broker highlights the balance sheet position looks rock solid post covid-19.

The rating is downgraded to Hold from Add and the target price is decreased to $2.67 from $2.83.

Target price is $2.67 Current Price is $2.50 Difference: $0.17
If MTO meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates NWS as Buy (1) -

News Corp's first-quarter result was a significant beat to UBS's forecast driven by a combination of better than expected performance in News Media & Foxtel and stronger referral revenues at Move & Book Publishing.

The REA Group's ((REA)) September quarter result was also ahead of expectations led by revenue deferrals and higher cost-outs.

FY21-22 operating income forecasts have been revised upwards by UBS although the broker highlights News Corp's near term performance depends heavily on the duration and severity of the pandemic.

UBS retains its Buy rating with the target price rising to $29 from $25.

Target price is $29.00 Current Price is $22.26 Difference: $6.74
If NWS meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $27.22, suggesting upside of 21.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.5

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

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

Morgans upgrades the rating for Pendal Group to Add from Hold due to a favourable balance of risk/reward over the next twelve months, a good net cash position and leverage to a broader equity market recovery.

The company reported 'core' net outflows of -$3.9bn in FY20, of which -$3.3bn was from EU funds. The result was broadly in-line with the analyst expectations.

The broker sees flows as remaining relatively subdued, unless assistance comes from potential funds flow into UK/EU markets. In that case, the analyst highlights the upside leverage the company has to a broad and sustained equity market improvement through 2021.

The rating is upgraded to Add from Hold and the target price of $7.02 is unchanged.

Target price is $7.02 Current Price is $6.29 Difference: $0.73
If PDL meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $6.69, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates PPH as Neutral (3) -

UBS would have liked more detail on Pushpay Holdings' front book which is still an area of uncertainty after the first half result.

Regarding the back book, UBS expects penetration to plateau in the second half with recovery in FY22. Overall, the broker's views on Pushpay's back book are similar to the company's forecasts.

On the assumption the front book growth resumes in FY22, UBS retains its Neutral rating with a target of NZ$8.35.

Current Price is $7.36. Target price not assessed.

Current consensus price target is $4.45, suggesting downside of -38.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.0

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

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

Credit Suisse notes the shares are up 6% following the Pfizer announcement of positive interim data for its coronavirus vaccine.

While continuing to believe that Ramsay Health Care would benefit from volume post the pandemic, significant earnings pressure is assessed for the near term as cases rise in Europe.

Credit Suisse makes earnings downgrades of -1-2% across the forecast period. The stock is now trading in line with a target of $70 and the rating is downgraded to Neutral from Outperform.

Target price is $70.00 Current Price is $69.49 Difference: $0.51
If RHC meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $68.52, suggesting upside of 1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Credit Suisse rates SGM as Neutral (3) -

The update at the AGM provided a materially improved trading outlook. Credit Suisse notes all metal divisions obtained solid earnings in the September quarter.

Intake volumes are indicated at 85% of FY19 levels, which is considered a "normal" trading year. Gains have been made as economies have emerged from lockdowns and this has driven steel production/scrap demand and more supportive non-ferrous pricing.

Credit Suisse retains a Neutral rating and asserts the update has endorsed previously uncertain projections rather than eliciting a material change in view. Target is raised to $10.75 from $9.85.

Target price is $10.75 Current Price is $10.24 Difference: $0.51
If SGM meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $9.99, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates SGM as Outperform (1) -

Sims' AGM offered commentary but little in the way of quantative visibility, the broker reports. The September quarter saw all metal operations achieving positive earnings, netting to a "solid" group effort.

New rules in China allow for some 90% of the company's non-ferrous scrap to imported, and the broker notes ferrous changes are potentially supportive as well.

Outperform retained, target rises to $11.60 from $11.00.

Target price is $11.60 Current Price is $10.24 Difference: $1.36
If SGM meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $9.99, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates SM1 as Hold (3) -

Synlait Milk will raise NZ$200m in new equity. Major shareholders in Bright Dairy (39%) and the a2 Milk Company ((A2M)), which owns 19.8%, have committed to their pro rata share.

The company will use the proceeds to complete the -NZ$70m investment needed to support the recently secured multinational customer agreement, and to strengthen the balance sheet.

Morgans feels the raising removes the negative sentiment created by an elevated balance sheet on top of an elevated capex profile.

Due to weaker than expected first half canned infant formula (IFC) customer demand, FY21 guidance has been softened by management and a particularly weak first half is expected, notes the broker.

Morgans EPS forecasts have fallen -18%, -15% and -15% over FY21-23. The Hold rating is unchanged and the target price is increased to $5.87 from $5.53. 

Target price is $5.87 Current Price is $5.10 Difference: $0.77
If SM1 meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.87, suggesting upside of 15.1% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.5

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

Citi rates STO as Buy (1) -

Citi delays the expected final investment decision for Dorado by six months and Barossa by 18 months. This relates to uncertainty over pandemic risks for executing on fabrication and the phasing of capital required to preserve credit metrics while oil prices are low.

Lower oil prices have slowed the pace of de-gearing relative to what the broker suspects Santos requires for a final investment decision. This, in turn, implies a preference by management to phase capital rather than raise equity.

Citi maintains a Buy rating and removes the High Risk tag because the outlook is less volatile. Target is reduced to $6.76 from $7.02.

Target price is $6.76 Current Price is $5.62 Difference: $1.14
If STO meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.45, suggesting upside of 8.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.9

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

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

As a result of recent vaccine developments, Morgans lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a return to some sense of normality (redirection of spend). 

The broker continues to think Christmas will be a boomer this year and first half results will show extraordinary growth with strong operating expense leverage on buoyant top-line trading. However, it's considered the market will likely look through this strength.

Super Retail Group's businesses (excl. Macpac) have benefited from domestic consumption conditions resulting from covid-19 in recent months, notes Morgans. The balance sheet is also considered in a solid position (zero net debt).

While the broker expects this will continue to play for a period yet, it's expected the market will be less willing to capitalise current earnings at higher price earnings (PE) levels.

The rating is decreased to Hold from Add and the target price decreased to $11.78 from $12.59.

Target price is $11.78 Current Price is $10.30 Difference: $1.48
If SUL meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $11.94, suggesting upside of 19.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Citi rates SUN as Neutral (3) -

Citi considers Suncorp Group reasonable value at current levels albeit there are a number of headwinds such as lower investment income and higher hazard allowances.

Suncorp has incurred natural hazard costs of -$348-408m in the four months to October 20 and there is a risk it will exceed its first half allowance. Citi asserts that, nevertheless, the chances of any overrun reversing in the second half are high.

The broker retains a Neutral rating and $10.20 target and prefers QBE Insurance ((QBE)) and Insurance Australia Group ((IAG)) in the general insurer space.

Target price is $10.20 Current Price is $9.15 Difference: $1.05
If SUN meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $10.54, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates SUN as Outperform (1) -

Suncorp Group has released quarterly data showing loan deferrals have contracted by more than a quarter since July. Impairment losses in the period indicated a return to pre-covid levels.

Medium term uncertainty remains around premium growth, but as the broker calculates the general insurance business is trading at around a -2% discount to peers, the stock could provide relative short-term safety for investors. Target rises to $11.80 from $11.00.

Outperform retained.

Target price is $11.80 Current Price is $9.15 Difference: $2.65
If SUN meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $10.54, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

The update on the company's banking business was better than Morgan Stanley expected. Total impairment charges were just -$3m and collective provisions were flat versus the prior quarter.

The credit outlook is supported by just 4% of mortgages remaining on payment deferrals.

In terms of the insurance business, losses for the four months to date are ahead of the catastrophe budget run rate but the broker believes this presents only modest risk to FY21 earnings.

Equal-weight rating. The target is steady at $9.50. Industry view: In-line.

Target price is $9.50 Current Price is $9.15 Difference: $0.35
If SUN meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $10.54, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Ord Minnett rates SUN as Accumulate (2) -

Suncorp Group updated the market on its quarterly APS330 disclosures on the bank, which showed weak loan book growth trends but favourable outcomes on impairments, highlights Ord Minnett.

The total lending portfolio contracted -$335m over the quarter (slightly weaker than the broker's forecast). This was considered driven by a -1% decline in home lending given repayments and refinancing, offset by a 1% increase in commercial loans and agribusiness lending. 

The group's collective provision remains unchanged and a small specific provision was taken this quarter, points out the analyst.

The Accumulate rating is unchanged and the target price is increased to $11.85 from $11.82.

Target price is $11.85 Current Price is $9.15 Difference: $2.7
If SUN meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $10.54, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates SUN as Buy (1) -

Suncorp Group's first-quarter bank update reveals loan book slippage led by a decline in housing lending.

UBS notes, with lower bad and doubtful debts than expected and net-interest-margins supported by the term funding facility, bank earnings appear to be tracking ahead of expectations.

UBS believe a truer picture will emerge in the second half once stimulus and deferrals come to an end. On the back of stronger near-term performance, the broker upgrades its earnings by 2.7% in FY21.

UBS reiterates its Buy rating with a target price of $10.60.

Target price is $10.60 Current Price is $9.15 Difference: $1.45
If SUN meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $10.54, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

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

Senex Energy has announced a dividend target of 20-30% of free cash and a production aspiration target in FY25 of 60PJ.

The sale of the Cooper Basin assets provides a platform for a more focused strategy, Morgan Stanley asserts, although the company will need to expand further in Roma West, find more gas via exploration, or make acquisitions to hit its higher production targets.

While the growth story remains sound, the broker believes there is better upside to an oil price recovery from other E&P companies.

Equal-weight retained. Target rises to $0.35 from $0.31. Industry view is Cautious.

Target price is $0.35 Current Price is $0.33 Difference: $0.02
If SXY meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $0.43, suggesting upside of 25.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Macquarie rates URW as Neutral (3) -

UR Westfield shareholders have voted down management's plan to raise equity, which implies asset sales will be needed to reduce debt. An activist consortium is pushing for US asset sales and the broker's analysis suggests this would be a less dilutive outcome.

However, financial risk would be heightened in the meantime, but the broker believes current valuation, at a -72% discount to net asset value, compensates. The vaccine news also limits downside.

Neutral and $2.74 target retained.

Target price is $2.74 Current Price is $4.12 Difference: minus $1.38 (current price is over target).
If URW meets the Macquarie target it will return approximately minus 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.77, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in EUR. 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

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

In a response to the response to the vaccine news with regard consumer stocks, Macquarie suggests that while virus winners will have a positive 2020, consumer behaviour will return to normal in 2021. To that end the broker has reverted to pre-covid sum-of-the-parts valuations.

Wesfarmers' target is lowered to $49.70 from $51.00. Downgrade to Neutral from Outperform.

The broker has not provided earnings/dividend forecast updates.

Target price is $49.70 Current Price is $47.41 Difference: $2.29
If WES meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $44.90, suggesting downside of -5.5% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Macquarie rates WOW as Outperform (1) -

In a response to the response to the vaccine news with regard consumer stocks, Macquarie suggests that while virus winners will have a positive 2020, consumer behaviour will return to normal in 2021. To that end the broker has reverted to pre-covid sum-of-the-parts valuations.

Woolworths' target is lowered to $40.75 from $42.50. Outperform retained.

The broker has not provided earnings/dividend forecast updates.

Target price is $40.75 Current Price is $37.64 Difference: $3.11
If WOW meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $42.18, suggesting upside of 10.3% (ex-dividends)

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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