Australian Broker Call
March 15, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 12:34 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| AQG - | ALACER GOLD | Upgrade to Outperform from Neutral | Macquarie |
| BDR - | BEADELL RESOURCES | Downgrade to Neutral from Outperform | Macquarie |
| CGF - | CHALLENGER | Upgrade to Neutral from Sell | Citi |
| GPT - | GPT | Upgrade to Outperform from Neutral | Credit Suisse |
| ORG - | ORIGIN ENERGY | Upgrade to Accumulate from Hold | Ord Minnett |
| OZL - | OZ MINERALS | Upgrade to Outperform from Neutral | Macquarie |
| SBM - | ST BARBARA | Upgrade to Outperform from Neutral | Macquarie |
| TRY - | TROY RESOURCES | Downgrade to Neutral from Outperform | Macquarie |
| WSA - | WESTERN AREAS | Upgrade to Outperform from Neutral | Macquarie |
Macquarie rates AQG as Upgrade to Outperform from Neutral (1) -
Macquarie observes gold equities continue to trade in a volatile way and this is expected to continue while gold prices are in the US$1150-1250/oz range. The broker believes share price volatility has opened up a value gap.
Macquarie upgrades to Outperform from Neutral on valuation grounds. Target is reduced to $2.80 from $2.90.
Target price is $2.80 Current Price is $2.51 Difference: $0.29
If AQG meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $4.28, suggesting upside of 76.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 4.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.7, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 10.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of minus 3.06 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.9, implying annual growth of -30.0%. Current consensus DPS estimate is 2.6, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 15.2. |
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
Macquarie rates AWC as Outperform (1) -
Macquarie's commodity team has updated price forecasts, with the key changes being upgrades of 29% for cobalt, 21% for alumina and a -9% reduction in coking coal estimates.
The emerging supply curtailments for aluminium and alumina are expected to drive material upside risk to the earnings outlook for the company.
Outperform retained. Target is raised to $2.40 from $2.20.
Target price is $2.40 Current Price is $1.82 Difference: $0.58
If AWC meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $1.84, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 21.40 cents and EPS of 19.05 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.0, implying annual growth of N/A. Current consensus DPS estimate is 14.1, implying a prospective dividend yield of 7.8%. Current consensus EPS estimate suggests the PER is 15.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 19.41 cents and EPS of 19.95 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.6, implying annual growth of 5.0%. Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 7.4%. Current consensus EPS estimate suggests the PER is 14.3. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BDR as Downgrade to Neutral from Outperform (3) -
Macquarie observes gold equities continue to trade in volatile way and this is expected to continue while gold prices are in the US$1150-1250/oz range.
The broker downgrades to Neutral from Outperform to reflect increased operating risk. Target is reduced to $0.30 from $0.35.
Target price is $0.30 Current Price is $0.28 Difference: $0.015
If BDR meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $0.31, suggesting upside of 8.8% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 2.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 3.7, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 7.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 5.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.4, implying annual growth of 73.0%. Current consensus DPS estimate is 0.3, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 4.5. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates BHP as Outperform (1) -
Macquarie's commodity team has updated price forecasts, with the key changes being upgrades of 29% for cobalt, 21% for alumina and a -9% reduction in coking coal estimates.
The broker expects capital management to be the main focus for the diversified majors in 2017.
Outperform retained. Target is reduced to $30 from $33.
Target price is $30.00 Current Price is $23.87 Difference: $6.13
If BHP meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $27.79, suggesting upside of 14.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 122.28 cents and EPS of 196.57 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 201.2, implying annual growth of N/A. Current consensus DPS estimate is 117.6, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 12.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 70.44 cents and EPS of 116.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 161.1, implying annual growth of -19.9%. Current consensus DPS estimate is 86.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 15.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CGF as Upgrade to Neutral from Sell (3) -
Citi analysts remain of the view Challenger won't meet its own guidance for FY17 Life CoE performance, but they also believe the improved outlook for the future from the higher proportion of longer-dated sales suggests the shares are not as expensive as previously thought.
On the flipside, Citi is of the belief Challenger will have to raise additional capital, exact timing unknown. On the combination of all of the above, rating upgraded to Neutral from Sell. Target lifts to $11.90 from $10.35.
Target price is $11.90 Current Price is $12.01 Difference: minus $0.11 (current price is over target).
If CGF 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 $10.88, suggesting downside of -9.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 34.50 cents and EPS of 68.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 65.9, implying annual growth of 12.6%. Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 18.3. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 39.00 cents and EPS of 75.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 71.7, implying annual growth of 8.8%. Current consensus DPS estimate is 36.9, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 16.8. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CPU as Buy (1) -
UBS believes the company's expansion into mortgage services is as important as cost reductions and interest-rate leverage, in terms of boosting anaemic, underlying organic growth. Globally, this business now represents 24% of group revenue, split equally across the US and UK.
The growth ambitions appear realistic and well timed to the broker, given competitor dynamics. Margin targets are considered achievable if the company can access the cost benefits of broader scale and avoid the operating service issues that are being faced by some of its peers. Buy rating and $14.95 target retained.
Target price is $14.95 Current Price is $14.01 Difference: $0.94
If CPU meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $13.52, suggesting downside of -3.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 43.86 cents and EPS of 73.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 71.9, implying annual growth of N/A. Current consensus DPS estimate is 37.1, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 19.5. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 37.00 cents and EPS of 63.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 76.0, implying annual growth of 5.7%. Current consensus DPS estimate is 39.5, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 18.4. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates GPT as Upgrade to Outperform from Neutral (1) -
The stock's recent underperformance can be attributed to both earnings and valuation risk associated with the GWSCF unit holder vote as well as depressed earnings growth, Credit Suisse believes.
Nevertheless, the broker is now more confident in the likelihood of the GWSCF being retained and, with greater visibility on the change-of-use upside, this makes it hard to ignore the valuation appeal.
Credit Suisse upgrades to Outperform from Neutral.. Target is raised to $5.35 from $5.21.
Target price is $5.35 Current Price is $4.79 Difference: $0.56
If GPT meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $5.16, suggesting upside of 5.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 25.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of N/A. Current consensus DPS estimate is 24.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.4. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 26.00 cents and EPS of 32.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.3, implying annual growth of 5.0%. Current consensus DPS estimate is 25.8, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 15.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates ING as Equal-weight (3) -
Morgan Stanley points out there should be little risk for Ingham's not achieving prospectus forecasts in FY17. After all, it's mostly about cost cutting against a background of strong retail sales.
Beyond FY17, however, the analysts see risks rising as contracts come up for negotiation, volume growth is likely to slow and supermarkets increasingly expect suppliers to do their dough in the price competition.
Ingham's is a major supplier to Woolworths ((WOW)), not so much to Coles ((WES)). While valuation looks cheap, it deserves to be to price in the mounting risks, argue the analysts. Equal-weight. Target $3.40. Industry view In-Line.
Target price is $3.40 Current Price is $3.04 Difference: $0.36
If ING meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $3.72, suggesting upside of 23.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 13.00 cents and EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.4, implying annual growth of N/A. Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 11.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 20.90 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.7, implying annual growth of 8.4%. Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 10.2. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates OGC as Hold (3) -
Deutsche Bank has visited Haile, considered a high-quality project that will underpin the company's portfolio for the next 10 years or more.
The broker believes the ore body has much more to offer than what is being captured in the latest technical report but extracting value is contingent on permit approvals that may take some years.
Hold rating retained. Target is raised to $4.10 from $4.00.
Target price is $4.10 Current Price is $3.86 Difference: $0.24
If OGC meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $4.60, suggesting upside of 22.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 2.66 cents and EPS of 29.24 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.3, implying annual growth of N/A. Current consensus DPS estimate is 3.7, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 8.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 2.66 cents and EPS of 37.21 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.7, implying annual growth of 5.7%. Current consensus DPS estimate is 3.7, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 8.4. |
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 ORG as Upgrade to Accumulate from Hold (2) -
Ord Minnett observes the stock price has declined -11% since the end of January, largely because of softness in both benchmark oil and spot LNG markets as well as slightly underwhelming first half result.
As the stock is now trading at a discount to the $7.10 target, the broker raises its rating to Accumulate from Hold.
Ord Minnett expects Origin Energy to benefit from the greater volatility in wholesale electricity markets through its flexible generation portfolio. An increasingly tight east coast gas market could result in a higher-than-expected value for the exploration and production business.
Target price is $7.10 Current Price is $6.54 Difference: $0.56
If ORG meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $7.23, suggesting upside of 10.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 73.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.1, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 36.0. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 10.00 cents and EPS of 54.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.6, implying annual growth of 212.7%. Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates OZL as Upgrade to Outperform from Neutral (1) -
Macquarie upgrades to Outperform from Neutral. The company is set to release its final feasibility study in the next few weeks on Carrapateena and the broker expects improved financial metrics, including reduced capital expenditure.
Target is reduced to $9.60 from $10.40.
Target price is $9.60 Current Price is $8.04 Difference: $1.56
If OZL meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $8.86, suggesting upside of 6.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 25.00 cents and EPS of 61.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.7, implying annual growth of N/A. Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 15.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 23.00 cents and EPS of 20.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 41.5, implying annual growth of -25.5%. Current consensus DPS estimate is 13.1, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 20.1. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates S32 as Outperform (1) -
Macquarie's commodity team has updated price forecasts, with the key changes being upgrades of 29% for cobalt, 21% for alumina and a -9% reduction in coking coal estimates.
Emerging supply curtailment is for aluminium and alumina, and a belief that China will reinstate the 276-day policy is expected to boost thermal coal prices and drive material upside risk to the earnings outlook for the company.
Outperform retained. Target is reduced to $3.70 from $3.80.
Target price is $3.70 Current Price is $2.70 Difference: $1
If S32 meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).
Current consensus price target is $3.12, suggesting upside of 14.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 15.68 cents and EPS of 33.49 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.5, implying annual growth of N/A. Current consensus DPS estimate is 14.1, implying a prospective dividend yield of 5.2%. Current consensus EPS estimate suggests the PER is 8.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 16.08 cents and EPS of 32.03 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.7, implying annual growth of -20.9%. Current consensus DPS estimate is 13.7, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 10.6. |
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
Macquarie rates SBM as Upgrade to Outperform from Neutral (1) -
Macquarie observes gold equities continue to trade in volatile way and this is expected to continue while gold prices are in the US$1150-1250/oz range.
The broker upgrades to Outperform from Neutral on valuation grounds. Target is raised to $3.00 from $2.90.
Target price is $3.00 Current Price is $2.60 Difference: $0.4
If SBM meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $2.90, suggesting upside of 15.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 28.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of -12.9%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 8.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 33.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.7, implying annual growth of 19.8%. Current consensus DPS estimate is 6.5, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 7.0. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates TRY as Downgrade to Neutral from Outperform (3) -
Macquarie observes gold equities continue to trade in volatile way and this is expected to continue while gold prices are in the US$1150-1250/oz range.
The broker downgrades to Neutral from Outperform to reflect increased operating risk. Target is reduced to $0.17 from $0.25.
Target price is $0.17 Current Price is $0.16 Difference: $0.015
If TRY meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 0.10 cents. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 0.00 cents and EPS of 7.30 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates WES as Sell (5) -
Wesfarmers has been hosting its very own UK hardware tour, highlighting upside potential from a successful turnaround, report analysts at Citi.
The analysts believe it is early days yet and the turnaround of Homebase/Bunnings is likely to encounter strong competition from incumbent retailers. Sell rating retained.
Target price is $39.00 Current Price is $44.35 Difference: minus $5.35 (current price is over target).
If WES meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $42.12, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 205.00 cents and EPS of 259.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 263.9, implying annual growth of 629.0%. Current consensus DPS estimate is 220.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 212.00 cents and EPS of 259.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 266.7, implying annual growth of 1.1%. Current consensus DPS estimate is 223.5, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates WES as Sell (5) -
After a site visit Deutsche Bank highlights how similar Bunnings stores in the UK are to Australian stores, not only in format but also in the presence of a large number of Australian brands.
The broker notes it is early days and the format is unproven in the UK. The risk is that it could take longer than anticipated to generate acceptable returns, even if the Bunnings format resonates well, given the challenging economics of the Homebase formats.
Deutsche Bank retains a Sell rating and $40 target.
Target price is $40.00 Current Price is $44.35 Difference: minus $4.35 (current price is over target).
If WES meets the Deutsche Bank target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $42.12, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 243.00 cents and EPS of 265.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 263.9, implying annual growth of 629.0%. Current consensus DPS estimate is 220.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 245.00 cents and EPS of 273.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 266.7, implying annual growth of 1.1%. Current consensus DPS estimate is 223.5, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates WES as Accumulate (2) -
The company hosted an upbeat presentation of its Homebase and Bunnings stores in the UK and Ireland.
Price deflation is not expected to occur, despite the new Bunnings offering in the market, which Ord Minnett notes has lower prices than its peers because of sourcing cost inflation. The main concern is the uncertainty following Brexit.
Accumulate retained. Target is raised to $45.50 from $45.00.
Target price is $45.50 Current Price is $44.35 Difference: $1.15
If WES meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $42.12, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 215.00 cents and EPS of 268.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 263.9, implying annual growth of 629.0%. Current consensus DPS estimate is 220.6, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.6. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 215.00 cents and EPS of 271.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 266.7, implying annual growth of 1.1%. Current consensus DPS estimate is 223.5, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WSA as Upgrade to Outperform from Neutral (1) -
Macquarie prefers Western Areas over Independence Group ((IGO)) for nickel exposure, with the supply outlook expected to become clearer in coming months.
The broker upgrades its nickel price forecast for 2017 by 12% and 2018 and 2019 by 6% and 4% respectively. Upgrade to Outperform from Neutral. Target is raised to $2.70 from $2.60.
Target price is $2.70 Current Price is $2.34 Difference: $0.36
If WSA meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $2.49, suggesting upside of 6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 0.00 cents and EPS of 6.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 3.9, implying annual growth of N/A. Current consensus DPS estimate is 0.3, implying a prospective dividend yield of 0.1%. Current consensus EPS estimate suggests the PER is 60.1. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 5.00 cents and EPS of 15.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.2, implying annual growth of 264.1%. Current consensus DPS estimate is 3.8, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 16.5. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AQG - | ALACER GOLD | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $2.51 |
| AWC - | ALUMINA | Outperform - Macquarie | Overnight Price $1.82 |
| BDR - | BEADELL RESOURCES | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $0.28 |
| BHP - | BHP BILLITON | Outperform - Macquarie | Overnight Price $23.87 |
| CGF - | CHALLENGER | Upgrade to Neutral from Sell - Citi | Overnight Price $12.01 |
| CPU - | COMPUTERSHARE | Buy - UBS | Overnight Price $14.01 |
| GPT - | GPT | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $4.79 |
| ING - | INGHAMS GROUP | Equal-weight - Morgan Stanley | Overnight Price $3.04 |
| OGC - | OCEANAGOLD | Hold - Deutsche Bank | Overnight Price $3.86 |
| ORG - | ORIGIN ENERGY | Upgrade to Accumulate from Hold - Ord Minnett | Overnight Price $6.54 |
| OZL - | OZ MINERALS | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $8.04 |
| S32 - | SOUTH32 | Outperform - Macquarie | Overnight Price $2.70 |
| SBM - | ST BARBARA | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $2.60 |
| TRY - | TROY RESOURCES | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $0.16 |
| WES - | WESFARMERS | Sell - Citi | Overnight Price $44.35 |
| Sell - Deutsche Bank | Overnight Price $44.35 | ||
| Accumulate - Ord Minnett | Overnight Price $44.35 | ||
| WSA - | WESTERN AREAS | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $2.34 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 9 |
| 2. Accumulate | 2 |
| 3. Hold | 5 |
| 5. Sell | 2 |
Wednesday 15 March 2017
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