Australian Broker Call

Deutsche Bank rates ALL as Buy (1) -

Deutsche Bank believes the company is well positioned to maintain its momentum in North America and in the VGT business in 2017 and 2018 as it enters new addressable segments.

VGT has continued to grow its installed base as evidenced by the Quapaw contract.

A Buy rating is retained. Target is based on a maintainable earnings approach and rises to $19.70 from $17.80.

Target price is $19.70 Current Price is $16.29 Difference: $3.41
If ALL meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $16.63, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: 0.8

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

Macquarie rates ALQ as Upgrade to Outperform from Underperform (1) -

With the minerals exploration cycle in the throes of a typical 3-year recovery Macquarie takes a more positive view on ALS. The broker upgrades to Outperform from Underperform despite the stock appearing expansive on near-term multiples.

Macquarie suspects the company may consider the sale or closure options for its oil & gas business in the event of ongoing losses and ALS remains on an acquisition footing in food. Target is raised to $6.70 from $5.20.

Target price is $6.70 Current Price is $6.08 Difference: $0.62
If ALQ meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting downside of -17.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.2

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

Credit Suisse rates API as Neutral (3) -

The CEO Stephen Roche will step down in February as part of the succession plans and the current general manager of business development, Richard Vincent, will take on the role. The company has also modestly increased its earnings guidance for FY16.

Credit Suisse revises forecasts and assumes the improved position is because of a significant recovery in the second half working capital position and, hence, the paying down of debt. Neutral rating retained. Target rises to $2.00 from $1.95.

Target price is $2.00 Current Price is $1.99 Difference: $0.015
If API meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: -0.3

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

Morgans rates APO as Hold (3) -

The outdoor advertising industry posted a 14.2% increase in media revenue in the September quarter and Morgans notes the rate of sales growth in the month was noticeably slower than in the prior two months.

Industry trends remain consistent with management's guidance for 2016 revenue growth of 6-8% and EBITDA between $79-84m.

Hold rating and $5.44 target retained.

Target price is $5.44 Current Price is $5.31 Difference: $0.13
If APO meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.27, suggesting upside of 15.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY16:

Forecast for FY17:

Market Sentiment: 0.7

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

Credit Suisse rates ASX as Neutral (3) -

Credit Suisse observes activity trends are softening but earnings growth appears insulated. The broker has factored in weaker September quarter activity into forecasts which leads to 2% downgrades across FY17-19.

The broker retains a Neutral rating, noting while valuation support is eroding the defensiveness of the earnings during current market volatility will remain appealing to some. Target is steady at $48.

Target price is $48.00 Current Price is $49.31 Difference: minus $1.31 (current price is over target).
If ASX meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $45.53, suggesting downside of -6.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.4

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

Macquarie rates AZJ as Outperform (1) -

The company has won the recent haulage contract with AGL Energy ((AGL)). The contract is short dated, FY18-25. The company believes it can manage existing haulage with existing equipment in the first instance but if Whitehaven Coal ((WHC)) or BHP Billiton ((BHP)) expand as the contracts allow, new equipment will be required.

Macquarie upgrades FY18 estimates on the back of the win. The broker also notes underlying coal volumes are sound and that the issues paper has been released by the ACCC on the proposals to acquire G-Rail. Outperform retained. Target is $4.99, up from $4.86.

Target price is $4.99 Current Price is $4.75 Difference: $0.24
If AZJ meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $4.71, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Deutsche Bank rates BHP as Hold (3) -

The investor briefing on the petroleum business suggests to Deutsche Bank a further fall of 5% in FY18 to 195mmboe while costs are trending higher. The broker reduces earnings estimates by 3-5%.

The broker notes the company reiterated its commitment to the US onshore assets despite these consuming US$26bn in cash since FY11.

Offshore exploration is more exciting in Deutsche bank's view, with a discovery north of Shenzi, but potential greenfields projects are long dated and conventional volumes remain in decline.

The broker retains a Hold rating and $22 target.

Target price is $22.00 Current Price is $23.12 Difference: minus $1.12 (current price is over target).
If BHP meets the Deutsche Bank target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.29, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.6

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

UBS rates BHP as Buy (1) -

UBS observes BHP has reiterated the economics of the US onshore business and emphasised its 1,200 liquid-rich wells with at least 15% return at US$50/bbl.

UBS is concerned that the Permian, which holds the bulk of the company's onshore resources by liquids, is not yet commercial. Even under a high case price scenario the broker does not expect onshore US business to generate material free cash flow until beyond the end of this decade.

Buy rating and $23 target retained.

Target price is $23.00 Current Price is $23.12 Difference: minus $0.12 (current price is over target).
If BHP meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $23.29, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

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

Assets under management reached $2.4bn in the September quarter, up 14% over the quarter. The company has made a solid start to FY17, Morgans observes and upgrades estimate by 6% over the forecast period.

Fund divestments and capital recycling continue to be a catalyst. The broker considers the stock a more attractive proposition after its recent share price decline and upgrades to Add from Hold. Target rises to $8.70 from $8.50.

Target price is $8.70 Current Price is $7.38 Difference: $1.32
If BLA meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Citi rates BOQ as Buy (1) -

Citi was unimpressed with the weak FY16 results, which were 2% below estimates. The broker does not believe soft revenue is the whole story, rather that net interest margins fell during the second half because of higher funding and hedging costs.

The challenges for FY17 are not unique to Bank of Queensland and the broker believes the bank is differentiated from peers in its strong capital position and high dividend yield.

Target is reduced to $13.75 from $15.00 and the Buy rating is retained.

Target price is $13.75 Current Price is $11.15 Difference: $2.6
If BOQ meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $11.64, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Credit Suisse rates BOQ as Neutral (3) -

Credit Suisse downgrades estimates for FY17 following the weak FY16 results. The broker did not like the soft net interest margin, contraction in the mortgage portfolio and further softening of collective provision coverage.

Credit Suisse expects revenue growth to remain a challenge, necessitating a more intense focus on costs. Neutral retained. Target is lowered to $11.50 from $12.00.

Target price is $11.50 Current Price is $11.15 Difference: $0.35
If BOQ meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $11.64, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Deutsche Bank rates BOQ as Hold (3) -

FY16 results were affected by weak margins, Deutsche Bank observes, with mortgage re-pricing failing to offset the funding costs and asset competition.

The broker believes this highlights the fragility of the bank's funding profile. Genuine improvement in the bank's deposit gathering ability is expected to take time.

Meanwhile, Deutsche Bank considers the current valuation fair and retains a Hold rating. Target is lowered to $11.00 from $11.50.

Target price is $11.00 Current Price is $11.15 Difference: minus $0.15 (current price is over target).
If BOQ meets the Deutsche Bank target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.64, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Macquarie rates BOQ as Neutral (3) -

FY16 results were soft in Macquarie's opinion, with margin pressure greater than expected. Coupled with subdued volume growth in recent months suggests to the broker that the revenue outlook in FY17 will be challenging.

The stock may appear relatively inexpensive, particularly compared with Bendigo & Adelaide ((BEN)), but Macquarie continues to envisage better value in the major banks.

The broke retains a Neutral rating and $11.50 target.

Target price is $11.50 Current Price is $11.15 Difference: $0.35
If BOQ meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $11.64, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Ord Minnett rates BOQ as Hold (3) -

Ord Minnett expects that margin headwinds will ease and the stepped-up cost management should mean that the FY16 results mark the low point of earnings-per-share growth.

The broker notes the margin re-basing in the second half was significant but considers the outlook is clearer. Mortgage volumes are expected to recover. A Hold rating is maintained as the valuation appears full. Target is $11.25.

Target price is $11.25 Current Price is $11.15 Difference: $0.1
If BOQ meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $11.64, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Macquarie rates CHC as Outperform (1) -

Macquarie is considering the implications of the Charter Hall Long WALE REIT currently being marketed for an IPO. Charter Hall will enjoy fee upside and, in aggregate, Macquarie estimates around 7% upside to current earnings forecasts.

The broker finds Charter Hall an attractive proposition with mid to high single digit underlying earnings growth for the next few years. Outperform retained with a $5.68 target.

Target price is $5.68 Current Price is $5.09 Difference: $0.59
If CHC meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates EHE as Neutral (3) -

The company has revised guidance for FY17 down by 16%. Macquarie notes weaker occupancy and increased non-labour operating expenses are driving the downgrade.

A strategic review is underway and the broker notes no-core assets may be divested. Despite the downgrade the broker believes the update is a step in the right direction as the company looks to re-set expectations and clean up some accounting practices.

Neutral rating retained. Target drops to $3.50 from $4.00.

Target price is $3.50 Current Price is $3.20 Difference: $0.3
If EHE meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Morgan Stanley rates EHE as Downgrade to Underweight from Equal-weight (5) -

Estia has downgraded earnings guidance by 14-18%. Despite the contribution of acquisitions, guidance now points to an earnings decline of 3.0-7.3%, Morgan Stanley calculates.

This suggests to the broker a lower sustainable margin and less of an ability to cope with the regulatory changes announced in the federal budget. Downgrade to Underweight.

Current Price is $3.20. Target price not assessed.

Current consensus price target is $3.68, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates EHE as Buy (1) -

The company has re-set FY17 EBITDA guidance to $86-90m. UBS observes the projections on growth appear to be set at very conservative levels.

A review of costs and other ways to mitigate government cuts is underway and the company will examine the divestment of underperforming assets. The broker believes the company has now passed the most difficult period in terms of cash flow and the balance sheet.

UBS makes reductions for the lower guidance, which it suspects is a floor. Target drops to $3.85 from $4.10. Buy rating retained.

Target price is $3.85 Current Price is $3.20 Difference: $0.65
If EHE meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 20.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Deutsche Bank rates FLT as Hold (3) -

Flight Centre has made a small acquisition in India, Travel Tours, which has transaction value of almost $150m in FY16 from 18 locations. The rationale is that India is a fast-growing emerging travel market and the acquisition will diversify the weighting away from corporate travel.

Deutsche Bank is surprised by the move to invest more capital in India as the company has commented in the past about the difficulty in operating in the Indian market and suspects execution will remain difficult.

Hold rating and $38 target retained.

Target price is $38.00 Current Price is $36.27 Difference: $1.73
If FLT meets the Deutsche Bank target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $36.04, suggesting downside of -0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates PLS as Underperform (5) -

The company has released a definitive feasibility study from its Pilgangoora lithium project and also completed a pre-feasibility to double production, both look positive to Macquarie.

Macquarie believes Pilgangoora could be a significant mine in the first quartile of spodumene production but remains of the view that barriers to entry in the market are low and there could be a rapid and large supply response.

Underperform rating is retained.Target falls to 40c (65c) on higher dilution for the expected capital raising to fund the project.

Target price is $0.40 Current Price is $0.48 Difference: minus $0.08 (current price is over target).
If PLS meets the Macquarie target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -1.0

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

Credit Suisse rates SBM as Neutral (3) -

September quarter production was in line with expectations at 92,500 ozs, representing 26% of FY17 guidance. Credit Suisse observes new records have been set at Simberi on material movements and volumes processed.

The broker's target of $2.95 and Neutral rating are retained.

Target price is $2.95 Current Price is $2.77 Difference: $0.18
If SBM meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.18, suggesting upside of 19.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Morgans rates TPE as Initiation of coverage with Add (1) -

TPI Enterprises is one of eight companies globally licensed to grow and export narcotic raw material to the pharmaceutical sector for opioid-based pain relief.

Morgans believes the stock's value proposition is strong and there is scope for expansion of the customer base, underpinned by long-term renewable contracts.

The broker initiatives coverage with an Add rating and $3.54 target.

Target price is $3.54 Current Price is $2.99 Difference: $0.55
If TPE meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Market Sentiment: 1.0

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

Macquarie rates VRL as Neutral (3) -

The Australian box office has had a strong start to FY17, supported by several high grossing films including Finding Dory, Suicide Squad, The Secret Life of Pets and Jason Bourne.

The broker is watching the stock closely as, prima facie, its earnings growth looks attractive in an expensive small caps market. Still, Macquarie retains a Neutral rating and remains of the view that the stock will not re-rate until it builds its track record. Target is steady at $5.07.

Target price is $5.07 Current Price is $5.02 Difference: $0.05
If VRL meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.49, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Deutsche Bank rates WES as Hold (3) -

Deutsche Bank now expects resources to be profitable in FY17, which should underpin strong group earnings. Coles and Bunnings remain the drivers of the share price, accounting for over 75% of the broker's valuation.

The broker revises FX and coal price assumptions which drives a 5% upgrade to FY17 earnings estimates. Hold rating retained. Target is $43.

Target price is $43.00 Current Price is $45.10 Difference: minus $2.1 (current price is over target).
If WES meets the Deutsche Bank target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $42.59, suggesting downside of -5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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