Australian Broker Call
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September 28, 2022
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 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.
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Today's Upgrades and Downgrades
UNI - | Universal Store | Upgrade to Neutral from Underperform | Macquarie |
WOR - | Worley | Upgrade to Hold from Lighten | Ord Minnett |
Overnight Price: $33.39
Morgan Stanley rates ALL as Overweight (1) -
Aristocrat Leisure's latest update is largely consistent with commentary from its first half results. According to Morgan Stanley, the company has not observed a slow down of its land-base gaming segment, while in digital it anticipates a mid-single digit compound annual growth rate over the coming years.
The company claims to be on track for real money gaming content to be available in two jurisdictions by the end of the year, and it continues to look to further merger and acquisition opportunities to accelerate expansion into the real money gaming segment.
The Overweight rating and target price of $45.00 are retained. Industry view: In-Line.
Target price is $45.00 Current Price is $33.39 Difference: $11.61
If ALL meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).
Current consensus price target is $43.29, suggesting upside of 30.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 EPS of 168.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 162.5, implying annual growth of 26.8%. Current consensus DPS estimate is 58.3, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 20.4. |
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 EPS of 187.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 184.3, implying annual growth of 13.4%. Current consensus DPS estimate is 69.8, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 18.0. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $37.20
Macquarie rates BHP as Outperform (1) -
Macquarie upgrades its short and long-term outlook for thermal coal due to a market deficit and energy security concerns. Earnings forecasts for relevant stocks under its coverage are materially impacted.
Over 2023-27 the broker's price estimates rise by 38-114%, while the long-term price forecast rises by 43% to US$80/t from US$58/t.
Macquarie's EPS forecasts for BHP Group rise by 4-6% for FY23 to FY26 and the target rises to $44 from $42. The Outperform rating is maintained.
Target price is $44.00 Current Price is $37.20 Difference: $6.8
If BHP meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $41.52, suggesting upside of 11.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 262.02 cents and EPS of 349.03 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 516.6, implying annual growth of N/A. Current consensus DPS estimate is 362.4, implying a prospective dividend yield of 9.7%. Current consensus EPS estimate suggests the PER is 7.2. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 306.85 cents and EPS of 407.73 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 423.8, implying annual growth of -18.0%. Current consensus DPS estimate is 308.4, implying a prospective dividend yield of 8.3%. Current consensus EPS estimate suggests the PER is 8.8. |
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
Ord Minnett rates BHP as Hold (3) -
BHP Group has outperformed Rio Tinto ((RIO)) on operating costs and sustaining capital requirements according to Ord Minnett, and the company has flagged a potential 40m tonne per annum growth by the end of the decade.
Ord Minnett expects an upcoming iron ore briefing could provide further detail as to the scope of works required to reach this goal, and why it will take so long to achieve a relatively small increase. Studies remain underway to grow production, with results targeted by FY25.
The Hold rating and target price of $42.00 are retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $42.00 Current Price is $37.20 Difference: $4.8
If BHP meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $41.52, suggesting upside of 11.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 309.65 cents and EPS of 441.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 516.6, implying annual growth of N/A. Current consensus DPS estimate is 362.4, implying a prospective dividend yield of 9.7%. Current consensus EPS estimate suggests the PER is 7.2. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 264.82 cents and EPS of 376.91 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 423.8, implying annual growth of -18.0%. Current consensus DPS estimate is 308.4, implying a prospective dividend yield of 8.3%. Current consensus EPS estimate suggests the PER is 8.8. |
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
Overnight Price: $1.52
Macquarie rates CRN as Outperform (1) -
Macquarie upgrades its short and long-term outlook for thermal coal due to a market deficit and energy security concerns. Earnings forecasts for relevant stocks under its coverage are materially impacted.
Over 2023-27 the broker's price estimates rise by 38-114%, while the long-term price forecast rises by 43% to US$80/t from US$58/t.
As Coronado Global Resources derives more than 90% of its revenue from metallurgical coal, Macquarie's EPS forecasts rise a modest 3-6% over 2023-27. The target rises to $3.60 from $3.50. The company is the preferred exposure to metallurgical coal. Outperform.
Target price is $3.60 Current Price is $1.52 Difference: $2.08
If CRN meets the Macquarie target it will return approximately 137% (excluding dividends, fees and charges).
Current consensus price target is $2.71, suggesting upside of 67.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 42.74 cents and EPS of 70.06 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.2, implying annual growth of N/A. Current consensus DPS estimate is 49.2, implying a prospective dividend yield of 30.4%. Current consensus EPS estimate suggests the PER is 2.2. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 61.65 cents and EPS of 113.21 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 78.7, implying annual growth of 4.7%. Current consensus DPS estimate is 51.7, implying a prospective dividend yield of 31.9%. Current consensus EPS estimate suggests the PER is 2.1. |
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
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $284.64
Ord Minnett rates CSL as Accumulate (2) -
Ord Minnett expects CSL's Vifor Pharma acquisition contribution to be weaker in the current half given a drop in dialysis patients. The broker does expect this to be short-term issue, and one that CSL understood when making its bid for Vifor Pharma.
The return of Mexican border plasma donors has boosted Ord Minnett's Behring forecasts, and offset weakness from Vifor Pharma.
The Accumulate rating and target price of $330.00 are retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $330.00 Current Price is $284.64 Difference: $45.36
If CSL meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $324.80, suggesting upside of 15.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 EPS of 800.06 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 857.2, implying annual growth of N/A. Current consensus DPS estimate is 406.6, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 32.9. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 EPS of 962.59 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1058.0, implying annual growth of 23.4%. Current consensus DPS estimate is 505.3, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 26.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.19
Macquarie rates CXO as Outperform (1) -
Macquarie explains that as spodumene ore has been uncovered in the Grants open pit, a maiden DSO lithium shipment will occur later this year. This occurrence would present upside to the analyst's base case forecasts.
In addition, accelerated work on the spodumene DMS plant has resulted in spodumene production being scheduled for the 1H 2023. The broker retains its Outperform rating and $1.80 target price.
Target price is $1.80 Current Price is $1.19 Difference: $0.61
If CXO meets the Macquarie target it will return approximately 51% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.80 cents and EPS of 2.20 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 6.50 cents and EPS of 21.70 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.89
Macquarie rates MVF as Outperform (1) -
While Medicare statistics for August show IVF fresh cycles fell around -20%, this is in comparison to the prior August which experienced the second strongest month on record.
The broker retains its Outperform rating for Monash IVF and expects 160bps of fresh market share gains in FY23, resulting in fresh cycle growth of 8.8%. Strong specialist recruitment is also expected to contribute to growth.
The $1.30 target price is unchanged.
Target price is $1.30 Current Price is $0.89 Difference: $0.41
If MVF meets the Macquarie target it will return approximately 46% (excluding dividends, fees and charges).
Current consensus price target is $1.23, suggesting upside of 38.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 4.20 cents and EPS of 6.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.0, implying annual growth of 27.1%. Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 14.8. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 4.70 cents and EPS of 7.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.0, implying annual growth of 16.7%. Current consensus DPS estimate is 4.8, implying a prospective dividend yield of 5.4%. Current consensus EPS estimate suggests the PER is 12.7. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.73
Macquarie rates NHC as Outperform (1) -
Macquarie upgrades its short and long-term outlook for thermal coal due to a market deficit and energy security concerns. Earnings forecasts for relevant stocks under its coverage are materially impacted.
Over 2023-27 the broker's price estimates rise by 38-114%, while the long-term price forecast rises by 43% to US$80/t from US$58/t.
Macquarie's EPS forecasts for New Hope rise by 34% and 163% in FY23 and FY24 and by over 400% from FY25 (from a low base) and the target rises to $7.00 from $6.00. The Outperform rating is maintained.
Target price is $7.00 Current Price is $5.73 Difference: $1.27
If NHC meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $5.83, suggesting downside of -1.9% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 221.00 cents and EPS of 315.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 244.6, implying annual growth of 107.1%. Current consensus DPS estimate is 165.0, implying a prospective dividend yield of 27.8%. Current consensus EPS estimate suggests the PER is 2.4. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 129.00 cents and EPS of 212.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 224.5, implying annual growth of -8.2%. Current consensus DPS estimate is 134.0, implying a prospective dividend yield of 22.6%. Current consensus EPS estimate suggests the PER is 2.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NST NORTHERN STAR RESOURCES LIMITED
Gold & Silver
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Overnight Price: $7.11
Citi rates NST as Buy (1) -
More detail on Northern Star Resources' Pogo strategy has reiterated to Citi that the company continues its plan to lift mine grade, reduce costs and lift reserves above ten years.
The company continues to take a slow and steady approach to reducing costs. Jumbo drilling rig operators have been reduced to six from seven, and the company targets a further reduction to five.
The broker does highlight that should gold pricing decline below US$1,200 per ounce resources would be pulled quickly.
The Buy rating and target price of $10.90 are retained.
Target price is $10.90 Current Price is $7.11 Difference: $3.79
If NST meets the Citi target it will return approximately 53% (excluding dividends, fees and charges).
Current consensus price target is $10.03, suggesting upside of 39.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 25.00 cents and EPS of 26.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.9, implying annual growth of -19.1%. Current consensus DPS estimate is 22.6, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 24.0. |
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 27.00 cents and EPS of 30.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.8, implying annual growth of 26.4%. Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 19.0. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PMV PREMIER INVESTMENTS LIMITED
Apparel & Footwear
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Overnight Price: $20.49
Ord Minnett rates PMV as Hold (3) -
With Premier Investments set to report full year results on September 29, Ord Minnett is forecasting a -5.5% year-on-year decline in retail earnings to $332.5m, and a -3.6% year-on-year decline to earnings per share to $1.61.
Having reported elevated inventory levels of $222m with its interim result, Ord Minnett expects the market to be looking for a normalisation of inventory moving into the new financial year to minimise gross margin risk.
The Hold rating and target price of $20.50 are retained.
Target price is $20.50 Current Price is $20.49 Difference: $0.01
If PMV meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $25.68, suggesting upside of 24.1% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 98.00 cents and EPS of 161.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 154.2, implying annual growth of -9.9%. Current consensus DPS estimate is 99.6, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 13.4. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 85.00 cents and EPS of 131.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 135.1, implying annual growth of -12.4%. Current consensus DPS estimate is 99.7, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 15.3. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $90.39
Macquarie rates RIO as Neutral (3) -
Rio Tinto is set to expand underground mining at Kennecott via the approval of the Lower Commercial Skarn project, with first copper production expected by early 2023.
The broker believes the Lower Commercial Skarn development is an initial small-scale project to de-risk the full underground development.
The Neutral rating and target price of $93.00 are retained.
Target price is $93.00 Current Price is $90.39 Difference: $2.61
If RIO meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $105.07, suggesting upside of 16.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 612.58 cents and EPS of 1131.99 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1447.2, implying annual growth of N/A. Current consensus DPS estimate is 806.9, implying a prospective dividend yield of 9.0%. Current consensus EPS estimate suggests the PER is 6.2. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 647.47 cents and EPS of 976.04 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1277.9, implying annual growth of -11.7%. Current consensus DPS estimate is 851.7, implying a prospective dividend yield of 9.5%. Current consensus EPS estimate suggests the PER is 7.0. |
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 RIO as Overweight (1) -
Rio Tinto remains committed to the development of battery minerals projects, with a focus on lithium and nickel.
The company reiterated to Morgan Stanley it considers lithium key to the development of electric vehicles and energy storage systems, and unlike peers, believes there will be long-term incentive prices for lithium projects.
With its current projects aimed at producing lithium carbonate, Rio Tinto is actively exploring the lithium carbonate to hydroxide refining process. Morgan Stanley sees expansion into the lithium hydroxide market as critical and adding optionality to product offering.
The Overweight rating and target price of $118.50 are retained. Industry view: Attractive.
Target price is $118.50 Current Price is $90.39 Difference: $28.11
If RIO meets the Morgan Stanley target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $105.07, suggesting upside of 16.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 766.43 cents and EPS of 1219.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1447.2, implying annual growth of N/A. Current consensus DPS estimate is 806.9, implying a prospective dividend yield of 9.0%. Current consensus EPS estimate suggests the PER is 6.2. |
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 999.02 cents and EPS of 1223.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1277.9, implying annual growth of -11.7%. Current consensus DPS estimate is 851.7, implying a prospective dividend yield of 9.5%. Current consensus EPS estimate suggests the PER is 7.0. |
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
SLH SILK LOGISTICS HOLDINGS LIMITED
Transportation & Logistics
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Overnight Price: $2.25
Morgans rates SLH as Add (1) -
Morgans incorporates into its forecasts the recently completed acquisition of Perth-based port logistics business, Freemantle Freight and Storage.
While EPS estimates initially fall by around -6% in FY23, FY24-FY25 forecasts lift by 3-5% and the target price increases to $3.70 from $3.50. The company's market share is expected to increase over the medium term.
For investors seeking income, the broker highlights a relatively defensible business with an attractive dividend yield. Add.
Target price is $3.70 Current Price is $2.25 Difference: $1.45
If SLH meets the Morgans target it will return approximately 64% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 11.00 cents and EPS of 31.00 cents. |
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 13.00 cents and EPS of 28.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.03
Macquarie rates SM1 as Underperform (5) -
The FY22 result for Synlait Milk was largely as Macquarie expected, with the business broadly on-track for recovery over FY23/24 as new customers ramp-up.
While net debt was a key positive for the analyst, a more cautious approach by management to increasing volume resulted in a significant step down from prior long-term return on capital targets.
The Underperform rating is retained due to execution risks and the target falls to NZ$3.25 from NZ$3.20.
Current Price is $3.03. Target price not assessed.
The company's fiscal year ends in July.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 22.92 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 EPS of 37.61 cents. |
This company reports in NZD. 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
Ord Minnett rates STO as Buy (1) -
Santos has confirmed the sale of a -5% stake in PNG LNG to Kumal Petroleum for US$1.4bn. The sale price, which implies value for the project of US$28-30bn, is below Ord Minnett's estimated value.
With the sale effective as of December 31, Ord Minnett notes Santos will retain the benefits of higher LNG pricing through to the end of the year.
The Buy rating is retained and the target price decreases to $9.25 from $9.90.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $9.25 Current Price is $6.95 Difference: $2.3
If STO meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $9.56, suggesting upside of 39.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 16.81 cents and EPS of 106.49 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 132.7, implying annual growth of N/A. Current consensus DPS estimate is 25.9, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 5.2. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 EPS of 85.47 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 107.9, implying annual growth of -18.7%. Current consensus DPS estimate is 36.3, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 6.3. |
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
UBS rates STO as Buy (1) -
Santos has agreed to exclusively deal with Kumal Petroleum Holdings following Kumal Petroleum's $1.4bn bid for Santos' 5% PNG LNG stake.
The deal remains dependent on Kumal Petroleum obtaining approvals and financing, but UBS is confident Santos could sell the stake to another bidder at similar terms should the deal fall through.
The broker described the sell down as a strategic move, reducing exposure to liquefied natural gas and accelerating deleveraging to support further capital management. UBS estimates gearing will reach 12% by December following completion of the sell down.
The Buy rating is retained and the target price decreases to $9.20 from $9.40.
Target price is $9.20 Current Price is $6.95 Difference: $2.25
If STO meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $9.56, suggesting upside of 39.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY22:
UBS forecasts a full year FY22 dividend of 21.02 cents and EPS of 121.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 132.7, implying annual growth of N/A. Current consensus DPS estimate is 25.9, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 5.2. |
Forecast for FY23:
UBS forecasts a full year FY23 EPS of 109.29 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 107.9, implying annual growth of -18.7%. Current consensus DPS estimate is 36.3, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 6.3. |
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
UNI UNIVERSAL STORE HOLDINGS LIMITED
Apparel & Footwear
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Overnight Price: $5.00
Macquarie rates UNI as Upgrade to Neutral from Underperform (3) -
After conducting a youth consumer survey, Macquarie finds Universal Store is the most preferred youth retailer, ahead of other incumbents such as General Pants and Glue Store.
These findings raise the broker's conviction in the worth of Universal Store's recent investment in digital initiatives and the rating rises to Neutral from Underperform. Improved in-store and online sales are assumed and the valuation multiple is increased.
The target jumps to $4.90 from $3.90.
Target price is $4.90 Current Price is $5.00 Difference: minus $0.1 (current price is over target).
If UNI meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.98, suggesting upside of 21.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 20.00 cents and EPS of 32.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 36.7, implying annual growth of 21.4%. Current consensus DPS estimate is 25.3, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 13.5. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 23.00 cents and EPS of 38.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 44.4, implying annual growth of 21.0%. Current consensus DPS estimate is 27.4, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 11.1. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.45
Macquarie rates WHC as Outperform (1) -
Macquarie upgrades its short and long-term outlook for thermal coal due to a market deficit and energy security concerns. Earnings forecasts for relevant stocks under its coverage are materially impacted.
Over 2023-27 the broker's price estimates rise by 38-114%, while the long-term price forecast rises by 43% to US$80/t from US$58/t.
Macquarie's EPS forecasts for Whitehaven Coal rise by 28% in FY23 and by 100%-200% for FY24-27 and the target rises to $12 from $10. The Outperform rating is maintained.
Target price is $12.00 Current Price is $8.45 Difference: $3.55
If WHC meets the Macquarie target it will return approximately 42% (excluding dividends, fees and charges).
Current consensus price target is $9.98, suggesting upside of 13.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 107.00 cents and EPS of 355.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 360.7, implying annual growth of 82.5%. Current consensus DPS estimate is 103.3, implying a prospective dividend yield of 11.7%. Current consensus EPS estimate suggests the PER is 2.4. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 125.00 cents and EPS of 417.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 228.5, implying annual growth of -36.7%. Current consensus DPS estimate is 85.8, implying a prospective dividend yield of 9.7%. Current consensus EPS estimate suggests the PER is 3.9. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.52
Ord Minnett rates WOR as Upgrade to Hold from Lighten (3) -
The recent market downturn has seen Worley's share price decline, and with the stock now trading below Ord Minnett's target price the broker has lifted its rating.
Ord Minnett continues to view Worley as a high-beta stock with better leverage to the market than most companies in its coverage.
The broker likes that capital expenditure forecasts imply mid-single digit revenue growth for each of the next two years. Ord Minnett forecasts earnings growth of 30% in FY23 and 16% in FY24.
The rating is upgraded to Hold from Lighten and the target price of $12.80 is retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $12.80 Current Price is $12.52 Difference: $0.28
If WOR meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $14.56, suggesting upside of 17.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 EPS of 64.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 69.1, implying annual growth of 110.6%. Current consensus DPS estimate is 50.1, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 18.0. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 EPS of 77.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 80.1, implying annual growth of 15.9%. Current consensus DPS estimate is 54.4, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 15.5. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
Company | Last Price | Broker | New Target | Prev Target | Change | |
BHP | BHP Group | $37.32 | Macquarie | 44.00 | 42.00 | 4.76% |
CRN | Coronado Global Resources | $1.62 | Macquarie | 3.60 | 3.50 | 2.86% |
NHC | New Hope | $5.94 | Macquarie | 7.00 | 6.00 | 16.67% |
SLH | Silk Logistics | $2.20 | Morgans | 3.70 | 3.50 | 5.71% |
STO | Santos | $6.85 | Ord Minnett | 9.25 | 9.90 | -6.57% |
UBS | 9.20 | 9.40 | -2.13% | |||
UNI | Universal Store | $4.94 | Macquarie | 4.90 | 3.60 | 36.11% |
WHC | Whitehaven Coal | $8.80 | Macquarie | 12.00 | 10.00 | 20.00% |
Summaries
ALL | Aristocrat Leisure | Overweight - Morgan Stanley | Overnight Price $33.39 |
BHP | BHP Group | Outperform - Macquarie | Overnight Price $37.20 |
Hold - Ord Minnett | Overnight Price $37.20 | ||
CRN | Coronado Global Resources | Outperform - Macquarie | Overnight Price $1.52 |
CSL | CSL | Accumulate - Ord Minnett | Overnight Price $284.64 |
CXO | Core Lithium | Outperform - Macquarie | Overnight Price $1.19 |
MVF | Monash IVF | Outperform - Macquarie | Overnight Price $0.89 |
NHC | New Hope | Outperform - Macquarie | Overnight Price $5.73 |
NST | Northern Star Resources | Buy - Citi | Overnight Price $7.11 |
PMV | Premier Investments | Hold - Ord Minnett | Overnight Price $20.49 |
RIO | Rio Tinto | Neutral - Macquarie | Overnight Price $90.39 |
Overweight - Morgan Stanley | Overnight Price $90.39 | ||
SLH | Silk Logistics | Add - Morgans | Overnight Price $2.25 |
SM1 | Synlait Milk | Underperform - Macquarie | Overnight Price $3.03 |
STO | Santos | Buy - Ord Minnett | Overnight Price $6.95 |
Buy - UBS | Overnight Price $6.95 | ||
UNI | Universal Store | Upgrade to Neutral from Underperform - Macquarie | Overnight Price $5.00 |
WHC | Whitehaven Coal | Outperform - Macquarie | Overnight Price $8.45 |
WOR | Worley | Upgrade to Hold from Lighten - Ord Minnett | Overnight Price $12.52 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 12 |
2. Accumulate | 1 |
3. Hold | 5 |
5. Sell | 1 |
Wednesday 28 September 2022
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Disclaimer:
The content of this information does in no way reflect the opinions of
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the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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