Australian Broker Call

Macquarie rates A2M as Outperform (1) -

Macquarie takes a closer look at the US fresh milk opportunity, the largest consumer market in the world. A2 Milk is currently building its market share, experiencing a similar development profile to Australia, which the broker finds encouraging.

Macquarie assumes a2 Milk has a 10-year build up to a 2% share of value. Outperform rating maintained. Target is raised to $16.10 from $15.75.

Target price is $16.10 Current Price is $13.40 Difference: $2.7
If A2M meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $14.49, suggesting upside of 8.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Macquarie rates AGL as Upgrade to Neutral from Underperform (3) -

AGL Energy has withdrawn from due diligence on Vocus Group ((VOC)). This suggests to Macquarie there are significant challenges to justify the bid price. However, AGL Energy has pointed to its commitment to diversify energy-only earnings into the emerging telco sectors.

Therefore, there is an inherent diversification risk likely to be embedded in the share price. Macquarie upgrades to Neutral from Underperform. The main positive for investors is that cash flow is strong and the balance sheet is rapidly re-gearing. Target is raised to $20.58 from $19.06.

Target price is $20.58 Current Price is $19.89 Difference: $0.69
If AGL meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $19.42, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Ord Minnett rates AGL as Hold (3) -

AGL Energy has withdrawn its $4.85/share bid for Vocus Group ((VOC)), less than a week after commencing due diligence. Commentary appears to suggest that management deemed the offer price too high after initiating due diligence.

The withdrawal potentially means capital returns are back on the agenda, Ord Minnett assesses. Despite a high pay-out ratio, the broker envisages gearing falling to below 20% by FY22.

This implies room for additional capital returns. Hold rating and $21 target maintained.

Target price is $21.00 Current Price is $19.89 Difference: $1.11
If AGL meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $19.42, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

UBS rates AGL as Sell (5) -

AGL Energy has confirmed it has withdrawn the indicative proposal to acquire Vocus Group ((VOC)), noting it was no longer confident that an acquisition would create certain value for shareholders.

UBS still expects AGL will be attracted to growth opportunities in data service provision. However, alternative options are scarce and much larger in terms of enterprise value.

UBS expects AGL will return to pursuing energy sector growth where there is greater confidence in its ability to extract synergies. UBS maintains a Sell rating and $18.35 target, expecting the stock will continue to de-rate.

Target price is $18.35 Current Price is $19.89 Difference: minus $1.54 (current price is over target).
If AGL meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $19.42, suggesting downside of -2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Macquarie rates ALQ as Outperform (1) -

Macro concerns have reduced earnings visibility and the stock has significantly de-rated yet Macquarie envisages this as more of a pause in the cycle, with the underlying need for exploration unchanged.

The broker notes a slight pick up in Australian capital raisins in mining in recent months and metallurgy/inspection continues to show strong growth.

Outperform rating and $8.62 target.

Target price is $8.62 Current Price is $7.05 Difference: $1.57
If ALQ meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $7.91, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Morgans rates APT as Add (1) -

Afterpay Touch is required to appoint an AUSTRAC-approved external auditor to look into its compliance with the anti-money laundering regulations. The company must provide AUSTRAC with a copy of the final audit report within 120 days of the external auditor being engaged.

While the audit is a negative, Morgans finds it hard to gauge the operating or financial implications based on current disclosure. While the wording of the notice appears collaborative, the broker suggests this still needs to be viewed as an escalation of the issue.

Add rating maintained. Target is reduced to $23.43 from $25.96.

Target price is $23.43 Current Price is $21.26 Difference: $2.17
If APT meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Macquarie rates AQG as Outperform (1) -

Alacer Gold has declared commercial production for the Copler sulphide plant while lifting 2019 oxide guidance to 125-145,000 ounces. Macquarie lifts 2019 production expectations for both sulphide and oxide.

The broker continues to expect incremental improvement in throughput and recoveries over the second half. Macquarie maintains an Outperform rating and $4.90 target.

Target price is $4.90 Current Price is $4.77 Difference: $0.13
If AQG meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $4.76, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Morgans rates AX1 as Upgrade to Add from Hold (1) -

Morgans upgrades to Add from Hold following recent share price weakness. The broker is mindful of several issues such as the rise of JD Sports and a likely slowdown in the growth of the company's footprint.

Nevertheless, the opportunity in increased vertical brand/product penetration and The Athlete's Foot franchise buyback should underpin a solid growth profile, in the broker's view. Target is steady at $1.51.

Target price is $1.51 Current Price is $1.34 Difference: $0.17
If AX1 meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Citi rates AZJ as Neutral (3) -

Aurizon has hosted a briefing on the outlook for the UT5 regulatory period for the below-rail business. The briefing focused on the direct deal with miners that the company announced in May, accounting for 90% of railed volumes.

The main focus for investors, Citi believes, should now shift to ratification of the deal, expected to occur by the end of 2019.

The proposed amendments to UT5 would mean Aurizon's regulated earnings period extends to 10 years from four. This should provide greater earnings visibility, in the broker's view. Neutral rating and $4.40 price target.

Target price is $4.40 Current Price is $5.32 Difference: minus $0.92 (current price is over target).
If AZJ meets the Citi target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.91, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Deutsche Bank rates AZJ as Buy (1) -

Management has updated post lodging its UT5 submission. Deutsche Bank notes there are differences in the submissions but these are mainly at the margin.

The stakeholder consultation period ends July 3 and the Queensland Competition Authority is expected to hand down its decision late in the first quarter of FY20.

Buy rating and $5.40 target maintained.

Target price is $5.40 Current Price is $5.32 Difference: $0.08
If AZJ meets the Deutsche Bank target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.91, suggesting downside of -7.7% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Macquarie rates AZJ as Neutral (3) -

The company has updated the market around its customer draft amending access undertaking (DAAU). Since lodging the DAAU with the Queensland Competition Authority, Aurizon has engaged the residual 10% of clients.

Macquarie believes the upside is already reflected in the share price. There is further upside from Adani and re-contracting above rail as well as better cost savings on the network.

Neutral rating maintained. Target is raised to $5.28 from $4.81.

Target price is $5.28 Current Price is $5.32 Difference: minus $0.04 (current price is over target).
If AZJ meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.91, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

UBS rates AZJ as Neutral (3) -

The agreement between Aurizon and the miners has progressed and is now with the Queensland regulator. UBS believes an approval could be received by the end of 2019 and the full run rate of around $40m per annum in benefits occur in FY21.

UBS estimates 5-7% of underlying costs have been removed in above-rail coal haulage since the IPO. The network will not achieve the same outcome but the broker believes a -10% reduction in costs could be attainable and add 3-4% to group earnings.

Neutral rating and $5.10 target maintained.

Target price is $5.10 Current Price is $5.32 Difference: minus $0.22 (current price is over target).
If AZJ meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.91, suggesting downside of -7.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Citi rates COH as Neutral (3) -

Citi assesses the new Tesla MRI compatible implant that has been launched in the US has already been factored into the share price.

The launch is in line with the broker's expectations and remains a positive for Cochlear as it increases confidence in forecasts.

Citi maintains a Neutral rating and $198 target.

Target price is $198.00 Current Price is $203.70 Difference: minus $5.7 (current price is over target).
If COH meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $170.11, suggesting downside of -16.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Deutsche Bank rates COH as Sell (5) -

The new cochlear implant has received approval from the US FDA earlier than Deutsche Bank expected and the announcement is considered a positive boost for Cochlear.

The broker maintains a Sell rating and $154 target.

Target price is $154.00 Current Price is $203.70 Difference: minus $49.7 (current price is over target).
If COH meets the Deutsche Bank target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $170.11, suggesting downside of -16.5% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Ord Minnett rates DMP as Lighten (4) -

Ord Minnett has recently reviewed the outlook, noting Australasian and European operations remain challenged. The Japanese market is a positive driver but remains too small to offset the headwinds.

The broker maintains a Lighten rating and reduces the target to $35 from $42. Ord Minnett suspects there is some downside risk to FY19 guidance and reduces FY20 and FY21 normalised earnings estimates by -5.8% and -8.9% respectively.

Target price is $35.00 Current Price is $38.71 Difference: minus $3.71 (current price is over target).
If DMP meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $42.40, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

Morgans rates DTL as Add (1) -

Morgans expects the Australian ICT sector is likely to return to growth in 2019, after several years of anaemic expenditure which has led to a need to replace equipment.

Data#3 has a long history as a technology services company, which the broker suggests is largely due to the quality of the offering and its success in evolving within a rapidly changing landscape.

Morgans takes the opportunity to roll forward valuation and increases the target to $2.25 from $1.85. Add rating maintained.

Target price is $2.25 Current Price is $2.13 Difference: $0.12
If DTL meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Credit Suisse rates FSF as Resume Coverage with Neutral (3) -

Credit Suisse resumes coverage with a Neutral rating and NZ$4.39 target. The company is progressing its exit from several areas of business including Tip Top, Brazil and Beingmate.

Debt remains considerable but the broker suggests there is time for orderly exits from further businesses.

This should provide more scope for lower overheads and smaller capital expenditure requirements versus the prior strategy, which Credit Suisse believes was too broad and focused on volume.

Current Price is $3.70. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: -0.3

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

UBS rates GPT as Neutral (3) -

UBS believes the growth outlook has improved and upgrades estimates for distributions by around 2.5% for FY20-22.

The company's office portfolio will deliver the best results amid office peers in 2019, boosted by a 300 basis points pick up in actual occupancy, in the broker's view.

UBS maintains a Neutral rating and raises the target to $6.30 from $5.78.

Target price is $6.30 Current Price is $6.32 Difference: minus $0.02 (current price is over target).
If GPT meets the UBS target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.81, suggesting downside of -8.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.2

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

Citi rates MMS as Buy (1) -

The company has downgraded FY19 guidance for net profit, primarily because of softness in its group remuneration services and asset management businesses. There is also soft conditions and increased competition in the UK.

Citi believes this is evidence of the cyclical headwinds in the new car market. The broker hopes for improved conditions in the first half of FY20 from a cyclical improvement, and better consumer sentiment post the federal election.

Buy rating maintained. Target is reduced to $16.07 from $16.82.

Target price is $16.07 Current Price is $12.49 Difference: $3.58
If MMS meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $14.65, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

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

The FY19 trading update implies -4.3% downgrades to consensus underlying net profit estimates, Macquarie notes. Trading conditions are weaker than expected.

McMillan Shakespeare has flagged surplus capital and an excess franking credit position. While capital could be allocated to acquisitions the company has also commenced a process to undertake an off-market share buyback in the first half of FY20 of up to $100m.

Macquarie reduces its growth and margin outlook and lowers the target to $12.62 from $14.21. Rating is downgraded to Neutral from Outperform.

Target price is $12.62 Current Price is $12.49 Difference: $0.13
If MMS meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $14.65, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Morgan Stanley rates MMS as Overweight (1) -

The company has announced a potential off-market share buyback of $100m and also guided to net profit in the range of $87-89m, -2-4% below Morgan Stanley's estimates.

The broker notes trading has softened into the fourth quarter. This is disappointing, but Morgan Stanley believes the market will look through the cyclical headwinds at the current valuation and find opportunity in the buyback.

Overweight rating. Target is $16.60. In-Line sector view.

Target price is $16.60 Current Price is $12.49 Difference: $4.11
If MMS meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $14.65, suggesting upside of 17.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Macquarie rates NEA as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage with an Outperform rating and $4.22 target. The broker believes Nearmap has a significant, under-penetrated market opportunity.

There are strong unit economics and a proven and highly profitable operating model. The aggregate market opportunity equates to over $3.0bn per annum in the company's existing markets.

Target price is $4.22 Current Price is $4.04 Difference: $0.18
If NEA meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.23, suggesting upside of 4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates PLS as Buy (1) -

Pilbara Minerals expects production of 65,000t for the June quarter. Sales are expected to be in the 23-45,000t range.

The company is trying to match shipping schedules with delayed commissioning and ramp up of a customer's chemical conversion facilities in China.

The company believes spodumene offtake is slower because of a conversion capacity mismatch, rather than because customers do not want more feedstock.

Buy/High Risk rating maintained with a $0.90 target.

Target price is $0.90 Current Price is $0.59 Difference: $0.31
If PLS meets the Citi target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $0.90, suggesting upside of 52.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Credit Suisse rates PLS as Outperform (1) -

Record May production of 22,375t and guidance for June of 20-24,000t signals to Credit Suisse a sustained improvement. Upside is expected from recovery enhancements.

The main negative in the company's update was principally market-driven and September quarter production is likely to be moderated to match demand.

The company has cited delays to the ramp up of its offtake partners' downstream chemical conversion facilities as the main reason for constraining sales volumes. Outperform rating and $1.15 target maintained.

Target price is $1.15 Current Price is $0.59 Difference: $0.56
If PLS meets the Credit Suisse target it will return approximately 95% (excluding dividends, fees and charges).

Current consensus price target is $0.90, suggesting upside of 52.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Macquarie rates PLS as No Rating (-1) -

A slower ramping up of key customer conversion capacity has dampened production and sales in June and July. The company recorded monthly production of 22,400t in May, achieving around 85% of stage 1 nameplate capacity.

Pilbara Minerals is exploring additional sales customers, including parties that have experienced interest in partnering at Pilgangoora.

The broker is advising hence is currently restricted from making a recommendation.

Current Price is $0.59. Target price not assessed.

Current consensus price target is $0.90, suggesting upside of 52.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Deutsche Bank rates QBE as Sell (5) -

Deutsche Bank believes QBE Insurance is facing a number of headwinds. The company is exiting from underperforming lines and returning its focus to the core business. Yet this is happening at a time of macro pressures.

Local interest rates have fallen and the US dollar has strengthened. At a micro level the broker envisages a normalisation of crop and downside risks to Australian lender mortgage insurance earnings. Sell rating maintained. Target is $11.60.

Target price is $11.60 Current Price is $11.91 Difference: minus $0.31 (current price is over target).
If QBE meets the Deutsche Bank target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.05, suggesting upside of 9.5% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Macquarie rates RIO as Outperform (1) -

The company has released updated information regarding its tailings facility management. Rio Tinto does not have any dams classified as extreme but has 20 considered "Very High" consequence. Half of these are located in Brazil at the operation, MRN, operated by Vale.

Macquarie suggests the increased costs of dam management are immaterial as the company is compliant with tailings dam standards set out by the ICMM in 2019.

Meanwhile, Rio Tinto is benefiting significantly from the iron ore price environment. Macquarie increases the target to $109 from $107. Outperform maintained.

Target price is $109.00 Current Price is $103.62 Difference: $5.38
If RIO meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $98.21, suggesting downside of -5.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Morgans rates RMS as Add (1) -

The company has released a life-of-mine plan for five years incorporating 1m or more ounces. FY20 production guidance of 214,500 ounces has been slated at an all-in sustaining cost of $1225-1325/oz.

Morgans believes the company is still on track to generate $103m in operating earnings (EBITDA) in FY20. A healthy cash balance and no debt also provide options. Add rating maintained. Target is reduced to $0.95 from $1.02.

Target price is $0.95 Current Price is $0.68 Difference: $0.27
If RMS meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Credit Suisse rates S32 as Outperform (1) -

The new Illawarra metallurgical coal reserve update now incorporates a reduction of -22mt as a portion of the mining lease in the Appin area is relinquished. Reserve life is reduced to 19 years.

Over 70% of the resource for the Taylor deposit is now stated as measured or indicated, supporting a pre-feasibility study that is expected to be completed by the end of FY20.

The company has also added 10mt to the resource estimate at Hermosa, although overall grade has been reduced.

Outperform rating and $4 target maintained.

Target price is $4.00 Current Price is $3.18 Difference: $0.82
If S32 meets the Credit Suisse target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $3.92, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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 S32 as Overweight (1) -

South32 has announced a maiden reserve for Hermosa, with increased tonnage but a decline in grades, and an updated reserve for Illawarra.

Coal reserves for the Bulli seam have been reduced by -22mt to 114mt following the decision to relinquish a portion of the mining lease.

Morgan Stanley does not believe this creates mine-life headwinds for Bulli, as the reserve life remains around 20 years. Overweight rating and $4.05 target maintained. Industry view is Attractive.

Target price is $4.05 Current Price is $3.18 Difference: $0.87
If S32 meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $3.92, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.6

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

Ord Minnett rates S32 as Hold (3) -

Ord Minnett reviews the Illawarra Coal operations ahead of a site visit. The broker maintains a view that Appin will return to two longwall operations by the second half of FY20.

Illawarra Coal accounts for around 20% of the broker's FY19 operating earnings forecasts and 13% of net present valuation. Hold rating maintained. Target is $3.60.

Target price is $3.60 Current Price is $3.18 Difference: $0.42
If S32 meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.92, suggesting upside of 23.2% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.6

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

Credit Suisse rates SGM as Outperform (1) -

The company has guided to May quarter operating earnings (EBIT) of US$28-29m from its auto and metals recycling segment.

The sequentially stronger performance reflects the benefits from higher ferrous and non-ferrous volumes, seasonally improved supply flows and retail sales.

Credit Suisse expects the June quarter should benefit from a material improvement in export market prices relative to US domestic prices.

Outperform rating and $12.90 target maintained.

Target price is $12.90 Current Price is $9.88 Difference: $3.02
If SGM meets the Credit Suisse target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $11.58, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.4

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

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

The company has announced a $50m sale and toll agreement for Roma North's gas processing facility. Credit Suisse believes the sale will strengthen the balance sheet and make the company more resilient to lower oil prices.

Credit Suisse reduces FY20 earnings estimates by -7.5% to account for the toll agreement. The broker's calculations suggest a capital raising is unlikely to be an issue.

Rating is upgraded to Outperform from Neutral on the back of the Jemena infrastructure sale, partly offset by the risk of higher royalties. Target is raised to $0.37 from $0.36.

Target price is $0.37 Current Price is $0.32 Difference: $0.05
If SXY meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

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

Senex Energy has announced the $50m sale of its Roma North processing facility to Jemena. Morgan Stanley judges this will improve the balance sheet rather than provide value accretion.

Equal-weight maintained. Target is $0.41. Industry view: In-Line.

Target price is $0.41 Current Price is $0.32 Difference: $0.09
If SXY meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Morgans rates SXY as Add (1) -

The company has announced the sale of the Roma North gas plant to infrastructure operator Jemena for $50m and a long-term gas tolling agreement. Morgans believes this should remove any remaining funding concerns. The gas plant is in its final stages of construction.

Morgans believes the market is undervaluing the company's organic earnings growth profile. While not offering a step-change in earnings from new projects, production from the flagship projects is expected to steadily ramp up.

Add rating maintained. Target is raised to $0.55 from $0.53.

Target price is $0.55 Current Price is $0.32 Difference: $0.23
If SXY meets the Morgans target it will return approximately 72% (excluding dividends, fees and charges).

Current consensus price target is $0.44, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Macquarie rates VOC as Neutral (3) -

AGL Energy ((AGL)) has withdrawn its indicative offer for Vocus Group. Macquarie notes there was limited explanation about the withdrawal, which comes only six days after announcing a four-week exclusive due diligence process.

The numerous challenges for Vocus have been well flagged but corporate interest continues, Macquarie notes.

The broker considers it unlikely Vocus will field other approaches soon and the focus will return to the operating outlook and transformation ambitions. Neutral maintained. Target is reduced to $3.25 from $4.50.

Target price is $3.25 Current Price is $3.26 Difference: minus $0.01 (current price is over target).
If VOC meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.82, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Deutsche Bank rates WHC as Buy (1) -

As Adani's Carmichael project is now proceeding, Deutsche Bank draws attention to the pending approvals for Whitehaven Coal and the latent value.

The broker has some hope that overall imports to China will pick up as the season enters a period of higher demand. Buy rating and $4.80 target.

Target price is $4.80 Current Price is $3.65 Difference: $1.15
If WHC meets the Deutsche Bank target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.01, suggesting upside of 37.3% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.9

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