Australian Broker Call

Citi rates AFG as Neutral (3) -

Citi's recent industry discussions show housing loan volumes are easing but remain "resilient" while investor loan applications are down between -10% to -20% post the federal budget.

The analyst believes the risks have a downside skew for greater falls and expects investor loan growth to decline by around -30% y/y in FY27.

Accordingly, EPS forecasts are downgraded across non-banks by the broker for FY27 by between -2% to -13%.

Positive tailwinds for funding are largely intact which is anticipated to support margins. Citi remains "constructive" on the sector, due to the valuation (between 6x-9x PER) and established through the cycle value offering.

Australian Finance Group remains Neutral rated with a new target price of $1.83 from $2.40.

Target price is $1.83 Current Price is $1.69 Difference: $0.145
If AFG meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.5

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

Bell Potter rates COI as Speculative Buy (1) -

Comet Ridge will raise $40m through a placement in two tranches and up to $5m in a share purchase plan at an issue price of 10.25c a share.

The funds will be used to settle the cash component of the company's acquisition of the Santos stake in the Mahalo joint venture as well as stamp duty and assumption of rehabilitation bonds.

The company is now targeting gas sales agreements and the economics of the Mahalo gas project by the end of 2026. First production is expected in late 2028.

Bell Potter had previously expected the company would introduce a project partner to fund both the acquisition and development, the latter which is still pending. Target  is reduced to $0.14 from $0.21 and a Speculative Buy rating is maintained.

Target price is $0.14 Current Price is $0.10 Difference: $0.041
If COI meets the Bell Potter target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Citi rates COL as Buy (1) -

Citi notes ABS retail categories rose 5.7% y/y in May compared to April, up 4.8% y/y. Food was robust at 4.3% growth, while the fall in Alcohol & Tobacco eased to around -4%, against previous months.

The analyst points out the Tobacco trend aligns with market feedback of some "stabilisation" in the market.

Markedly, against a backdrop of weak consumer confidence, discretionary categories remained strong. Household goods rose 6.4% y/y, Clothing & Footwear up 7.2% were the stand outs, the broker highlights.

Lower than expected fuel prices are believed to be the catalyst for the strength in spending data. Qld and WA were the strongest.

Citi's top stock picks are Coles Group, Buy rated with a $23 target and JB HiFi ((JBH)), Buy rated with a $85 target.

Target price is $23.00 Current Price is $24.06 Difference: minus $1.06 (current price is over target).
If COL meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.86, suggesting downside of -1.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.7

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

Bell Potter rates EIQ as Initiation of coverage with Speculative Buy (1) -

Bell Potter initiates coverage of EchoIQ with a Speculative Buy rating and $1.65 target. First off among catalysts is the pending approval of the 510(K) submission for  EchoSolv HF, focused on left ventricle disease and this is expected in the next month or so.

If approved, the broker points out the product is likely to attract keen interest from cardiology buyers around  the world and will be adopted by the Mayo Clinic.

The AI-driven software is used to analyse echocardiographic data and aid clinicians in diagnosing serious cardiac disease including aortic stenosis and left ventricle dysfunction.

Target price is $1.65 Current Price is $1.62 Difference: $0.035
If EIQ meets the Bell Potter target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.58, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Ord Minnett rates EIQ as Speculative Buy (1) -

EchoIQ has forged an agreement with Pro Medicus ((PME)), establishing a framework for a strategic investment and US reseller agreement.

Ord Minnett believes the deal will provide a timely boost to the cash outlook and a step change in the company's immediate US commercialisation opportunity.

The broker anticipates the integration of EchoSolv will assist Pro Medicus to upsell existing customers onto its cardiology platform and provide a material incremental growth opportunity for EchoIQ.

Ord Minnett updates forecasts and reduces estimated cost of capital to reflect a de-risked funding profile. Speculative Buy. Target is raised to $1.80 from $1.50.

Target price is $1.80 Current Price is $1.62 Difference: $0.185
If EIQ meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.58, suggesting downside of -0.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Citi rates JBH as Buy (1) -

Citi notes ABS retail categories rose 5.7% y/y in May compared to April, up 4.8% y/y. Food was robust at 4.3% growth, while the fall in Alcohol & Tobacco eased to around -4%, against previous months.

The analyst points out the Tobacco trend aligns with market feedback of some "stabilisation" in the market.

Markedly, against a backdrop of weak consumer confidence, discretionary categories remained strong. Household goods rose 6.4% y/y, Clothing & Footwear up 7.2% were the stand outs, the broker highlights.

Lower than expected fuel prices are believed to be the catalyst for the strength in spending data. Qld and WA were the strongest.

Citi's top stock picks are Coles Group ((COL)), Buy rated with a $23 target and JB HiFi, Buy rated with a $85 target.

Target price is $85.00 Current Price is $81.60 Difference: $3.4
If JBH meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $84.91, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.5

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

Citi rates JDO as Buy (1) -

Judo Capital announced an increase in specific provisions and lifted cost guidance to -$116m-$122m versus consensus at -$96m due to a deterioration in three individual exposures, Citi explains.

Management has downgraded FY26 by around -8% below consensus at the mid-point and initial FY27 guidance for profit before tax is $210m-$220m, some circa -15% below consensus.

The analyst highlights that the FY27 downgrades seem to be an effort to "rebase" the earnings outlook. The -40% fall in the share price is believed to mirror market concerns around structural issues like how much risk has been assumed by Judo.

EPS forecasts are lowered by -8% to -14% over FY26-FY27 with a downgrade in target price to $1.50 from $2.20. The stock remains Buy rated but confidence will take time to restore, Citi stresses.

Target price is $1.50 Current Price is $0.92 Difference: $0.585
If JDO meets the Citi target it will return approximately 64% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting upside of 93.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Macquarie rates JDO as Outperform (1) -

Judo Capital updated the market on credit quality ahead of its 2H26 result. As a result of three exposures totalling $70–$80m it has revised up its FY bad debt charge from –$100m to –$116–122m.

Despite a better underlying performance, this has seen FY profit guidance downgraded to $163–$169m (was $180–$190m). It has also released FY27 guidance for profit of $210–$220m, materially below consensus of $250m.

Importantly, notes Macquarie, this guidance incorporates an assumption of continued elevated impairments, given the challenging macro outlook.

It will take time for management to win back credibility, but after a –40% fall in the share price, Macquarie thinks the elevated near-term risks are more than adequately reflected in Judo's valuation.

Outperform retained, target falls to $1.55 from $1.85.

Target price is $1.55 Current Price is $0.92 Difference: $0.635
If JDO meets the Macquarie target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting upside of 93.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Morgan Stanley rates JDO as Overweight (1) -

Judo Capital has increased its FY26 loan loss guidance to above consensus and profit guidance to below consensus. FY27 profit guidance is also reduced, with no loan loss guidance provided.

In Morgan Stanley's view, the announcement raises concerns about Judo’s lending standards, business model and ‘metrics-at-scale’ targets.

The broker is surprised how quickly loan losses have stepped up – operating conditions started to deteriorate only in March and credit quality remains sound at other banks.

Morgan Stanley believes it will take time to address these concerns. Overweight and $1.85 target retained for now. Industry view: Cautious.

Target price is $1.85 Current Price is $0.92 Difference: $0.935
If JDO meets the Morgan Stanley target it will return approximately 102% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting upside of 93.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Morgans rates JDO as Buy (1) -

Judo Capital has downgraded its FY26 pre-tax profit guidance to $163-169m, down around -8% at the mid point. Morgans observes the slump in the share price was "vicious", considering the decline that has already occurred since February.

Earnings growth may have moderated but the broker still forecasts around 30% EPS growth across FY26 and FY27 and notes a significant risk premium has now been priced into the stock.

It was higher credit impairment charges that damaged guidance, with the company surprised by the rapid deterioration in three loan exposures across different sectors and different states. Morgans reduces the target to $1.47 from $2.15 and retains a Buy rating.

Target price is $1.47 Current Price is $0.92 Difference: $0.555
If JDO meets the Morgans target it will return approximately 61% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting upside of 93.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Ord Minnett rates JDO as Downgrade to Hold from Buy (3) -

Judo Capital has reduced guidance for FY26 pre-tax profit by -9%–11%, citing increased bad and doubtful debt provisions related to three borrowers in different sectors.

Ord Minnett is greatly concerned, given the speed at which conditions for these three specific exposures deteriorated, which raises questions as to just how rigorous and reliable the company's monitoring processes are.

The broker also highlights the large size of the particular loans, with a combined exposure of $80m, versus the company's average loan size to its key SME clients of around $3m.

Rating is downgraded to Hold from Buy and the target lowered to $1.60 from $2.40.

Target price is $1.60 Current Price is $0.92 Difference: $0.685
If JDO meets the Ord Minnett target it will return approximately 75% (excluding dividends, fees and charges).

Current consensus price target is $1.70, suggesting upside of 93.6% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Citi rates LFG as Neutral (3) -

Citi's recent industry discussions show housing loan volumes are easing but remain "resilient" while investor loan applications are down between -10% to -20% post the federal budget.

The analyst believes the risks have a downside skew for greater falls and expects investor loan growth to decline by around -30% y/y in FY27.

Accordingly, EPS forecasts are downgraded across non-banks by the broker for FY27 by between -2% to -13%.

Positive tailwinds for funding are largely intact which is anticipated to support margins. Citi remains "constructive" on the sector, due to the valuation (between 6x-9x PER) and established through the cycle value offering.

Liberty Financial retains a Neutral rating with a new target price of $3.35 from $4.10, previously.

Target price is $3.35 Current Price is $3.17 Difference: $0.18
If LFG meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.5

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

Bell Potter rates MI6 as Speculative Buy (1) -

Minerals 260 has drilling results from ongoing resource definition at the Bullabulling gold project in Western Australia including 20m at 3.4g/t gold from 93m, 18m at 2.9g/t gold from 332m and 3m at 5.6g/t gold from 265m.

The results, both infill and extension drilling, will be included in the August update and continue to confirm and upgrade confidence in the current resource, commentary states.

Bell Potter notes additional opportunities are emerging, stemming from continuity and increases in the understanding of the geology of high-grade zones within the footwall at Phoenix and Bacchus deposits. Speculative Buy rating and $1.35 target.

Target price is $1.35 Current Price is $0.83 Difference: $0.52
If MI6 meets the Bell Potter target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $1.24, suggesting upside of 45.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Bell Potter rates NIC as Buy (1) -

Nickel Industries will acquire an interest in the expansions to the existing ENC HPAL facility, lifting its attributable nickel in HPAL capacity to 58,600tpa.

It will acquire a 17.5% interest in the 36,000tpa PT Teluk Metal Industry expansion for US$169m in cash. Separately, a 36% interest in the 28,000tpa PT Chengsheng New Energy expansion will be acquired via an equity swap.

Bell Potter finds the unexpected deal compelling, with the payback period short and firmly establishing the company in the lithium-ion battery supply chain. It also integrates the Sampala project into downstream nickel production.

Buy rating retained. Target rises to $1.55 from $1.45.

Target price is $1.55 Current Price is $0.89 Difference: $0.66
If NIC meets the Bell Potter target it will return approximately 74% (excluding dividends, fees and charges).

Current consensus price target is $1.38, suggesting upside of 52.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY26:

Forecast for FY27:

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

Market Sentiment: 1.0

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

Citi rates PPM as Buy (1) -

Citi's recent industry discussions show housing loan volumes are easing but remain "resilient" while investor loan applications are down between -10% to -20% post the federal budget.

The analyst believes the risks have a downside skew for greater falls and expects investor loan growth to decline by around -30% y/y in FY27.

Accordingly, EPS forecasts are downgraded across non-banks by the broker for FY27 by between -2% to -13%.

Positive tailwinds for funding are largely intact which is anticipated to support margins. Citi remains "constructive" on the sector, due to the valuation (between 6x-9x PER) and established through the cycle value offering.

Pepper Money remains the preferred non-bank exposure with a Buy rating. Target price falls to $2.05 from $2.65, previously.

Target price is $2.05 Current Price is $1.58 Difference: $0.47
If PPM meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Market Sentiment: 0.5

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

Citi rates RMC as Upgrade to Neutral from Sell (3) -

Citi's recent industry discussions show housing loan volumes are easing but remain "resilient" while investor loan applications are down between -10% to -20% post the federal budget.

The analyst believes the risks have a downside skew for greater falls and expects investor loan growth to decline by around -30% y/y in FY27.

Accordingly, EPS forecasts are downgraded across non-banks by the broker for FY27 by between -2% to -13%.

Positive tailwinds for funding are largely intact which is anticipated to support margins. Citi remains "constructive" on the sector, due to the valuation (between 6x-9x PER) and established through the cycle value offering.

Resimac Group is upgraded to Neutral from Sell. Target price is cut to 75c from 80c.

Target price is $0.75 Current Price is $0.81 Difference: minus $0.055 (current price is over target).
If RMC meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

Bell Potter rates SGLLV as Buy (1) -

Ricegrowers reported FY26 underlying net profit that was ahead of Bell Potter's forecasts, while EBITDA, down -3%, was slightly below. FY27 revenue is expected to be slightly below FY26, reflecting lower participation in bulk tenders amid a smaller Australian 2026 crop.

This year will be a challenge, the broker suggests, given a lower level of SMDB storage utilisation as 2027 planting decisions are made.

Forecasts for FY28 reflect a cropping outcome that is largely comparable to FY27, with growth continuing in the branded business contribution. Target is raised to $18 from $17 and a Buy rating is maintained.

Target price is $18.00 Current Price is $14.47 Difference: $3.53
If SGLLV meets the Bell Potter target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in April.

Forecast for FY27:

Forecast for FY28:

Market Sentiment: 1.0

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

Bell Potter rates SNT as Speculative Buy (1) -

Syntara will report initial results in coming days from a Phase 2 trial for drug candidate SNT-4728. Bell Potter observes this candid receives less attention, or value attribution, compared to the company's myelofibrosis/MDS asset but represents a clear opportunity.

The trial will test subjects with iRBD, isolated REM sleep behaviour disorder, where most end up developing Parkinson's related conditions.

The key question, the broker points out, is whether the inhibition of two specific enzymes will lead to a downstream reduction in neuroinflammation in the brain.

No changes to the six cents target or Speculative Buy rating.

Target price is $0.06 Current Price is $0.02 Difference: $0.039
If SNT meets the Bell Potter target it will return approximately 186% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Citi rates WOR as Buy (1) -

Worley's market update included two negative aspects, according to Citi. FY26 earnings (EBITDA) is now expected to experience a headwind of -$110m including around -$60m from delays in Middle East projects, as well as FX moves of -$50m.

Both challenges are considered as timing issues, rather than structural challenges with no cancellations of projects. A reopened 2015 class action does contribute to uncertainty, but the analyst notes the financial exposure is manageable via insurance.

The sell off in the share price by -10% is viewed as overdone in light of no basic changes to the underlying fundamentals.

Buy rated. Target slips to $12.50 from $13.60.

Target price is $12.50 Current Price is $11.08 Difference: $1.42
If WOR meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.30, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.6

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

Macquarie rates WOR as Outperform (1) -

Worley has disclosed its earnings impact from the Middle East conflict will be "up to -$60m" versus April's -$30-40m assumption. Importantly, notes Macquarie, impacts are contained to the Middle East.

Worley should be a beneficiary of the Gulf oil & gas rebuild as conflict ends, along with return of deferred growth projects. The market will require evidence that deferred projects are resuming -- Macquarie thinks this should occur during 1H27 assuming a durable peace deal.

After a tough FY26 featuring war and tariffs, Macquarie believes the broader environment should get better from here. The question is one of timing. Target falls to $12.00 from $13.70, Outperform retained.

Target price is $12.00 Current Price is $11.08 Difference: $0.92
If WOR meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $13.30, suggesting upside of 23.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.6

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

Ord Minnett rates WOR as Downgrade to Hold from Accumulate (3) -

Worley has downgraded guidance for FY26 underlying EBITA, citing the Middle East war and now expecting a negative impact of around -$60m, well ahead of Ord Minnett's prior expectations of -$45m. Rating is downgraded to Hold from Accumulate.

The company points out no customers have cancelled any projects but disruptions and delays remain an issue. No new contracts were being awarded amid uncertainty regarding the ceasefire and reopening of the Strait of Hormuz.

The broker reduces EPS estimates by -7.2% for FY26 and -8.2% for FY27, lowering the target to $12.70 from $13.10.

Ord Minnett also highlights the change in business mix, with a shift to engineering, procurement and construction work - a business segment that is higher risk - compared with the traditional consultancy and advisory.

Target price is $12.70 Current Price is $11.08 Difference: $1.62
If WOR meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $13.30, suggesting upside of 23.3% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.6

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