Australian Broker Call

Macquarie rates AMI as Outperform (1) -

Aurelia Metals has halted the exploration decline at Federation amid funding issues, with the market reacting with a -38% share price decline. Macquarie highlights project funding remains a major hurdle, with the company estimating development costs of $145m.

Macquarie assumes funding will be met through a $70m capital raising, with cash flows to fund the balance. The release of Aurelia Metals' Federation feasibility study, alongside full year guidance and an assumed equity raising supports earnings per share forecast declines of -66%, -14%, -34%, -52% and -64% through to FY27. 

The broker maintains that Federation will be a transformational asset for the company. The Outperform rating is retained and the target price decreases to $0.25 from $0.30.

Target price is $0.25 Current Price is $0.13 Difference: $0.12
If AMI meets the Macquarie target it will return approximately 92% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

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

A positive margin outcome and commentary from Bank of Queensland supports Morgan Stanley's positive view on near-term margin trends for the major banks, particularly in relation to deposit pricing benefits.

For ANZ Bank, the Equal-weight rating and $23.10 target price are maintained. Industry View Attractive.

Target price is $23.10 Current Price is $24.75 Difference: minus $1.65 (current price is over target).
If ANZ meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.79, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Ord Minnett rates ANZ as Accumulate (2) -

Ord Minnett sets higher target prices for the four major Australian banks after gaining increased confidence from Hold-rated Bank of Queensland's FY22 result.

The broker sees significant near-term interest rate leverage and potential net interest margin expansion from a slow repricing of deposit products. A potential lack of credit quality issues, until (possibly late) 2023, provides further confidence for earnings upside.

ANZ Bank is rated second behind Accumulate-rated National Australia Bank in Ord Minnett's order of preference. The target rises to $26.20 from $24.70 and the Accumulate rating is maintained.

Target price is $26.20 Current Price is $24.75 Difference: $1.45
If ANZ meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $26.79, suggesting upside of 6.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates APM as Outperform (1) -

APM Human Services International has received an average Disability Employment Services Star Rating of 3.96 for the June quarter, largely in line with its 3.98 rating in the March quarter and the highest rating among the top ten largest providers.

Credit Suisse notes performance was not consistent across regions, with ratings only improving in New South Wales and the ACT, while Victoria and Western Australia reported the steepest declines. The broker expects market leading ratings to support market share gains. 

The Outperform rating and target price of $4.30 are retained.

Target price is $4.30 Current Price is $3.28 Difference: $1.02
If APM meets the Credit Suisse target it will return approximately 31% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates BOQ as Buy (1) -

While FY22 cash earnings for Bank of Queensland fell short of the consensus estimate by around -2%, Citi notes shares reacted positively to the announcement.

The analyst feels the reaction was due to bullish commentary on the net interest margin (NIM), as costs (while disappointing) will proportionally be much less than revenue upgrades. Previous NIM expectations held by the market were thought to be much lower.

After adjusting for bad and doubtful debts, the broker increases its forecast return on equity to 7.8% from 7.3% and retains its Buy rating and $8.75 target price.

Target price is $8.75 Current Price is $7.59 Difference: $1.16
If BOQ meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $8.82, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Credit Suisse rates BOQ as Outperform (1) -

Bank of Queensland's higher net interest margin result, as well as further upside into the first half of the new fiscal year, underpins Credit Suisse's cash earnings forecast upgrades of 3% and 1% in FY23 and FY24 respectively. 

The broker found the result to validate the thesis that Bank of Queensland can benefit from upside risk from rising rates, which it expects will translate to strong net interest income in the coming year. It does warn of inflation and tech investment pressures on the bank.  

The Outperform rating and target price of $10.00 are retained.

Target price is $10.00 Current Price is $7.59 Difference: $2.41
If BOQ meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $8.82, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates BOQ as Neutral (3) -

Macquarie described Bank of Queensland's full year result as solid, with exit margins 6 basis points up on the previous year as deposit pricing continued to provide upside.

The broker does warn upside risk is less material looking ahead, with deposit margins likely to peak in the first half of the new fiscal year, and considers risk to consensus margins from FY24.

Despite this, improved deposit margin benefits lift earnings per share forecasts 9%, 8% and 3% through to FY25.

The Neutral rating is retained and the target price increases to $7.50 from $7.00.

Target price is $7.50 Current Price is $7.59 Difference: minus $0.09 (current price is over target).
If BOQ 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 $8.82, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Morgan Stanley rates BOQ as Overweight (1) -

Following FY22 results for Bank of Queensland, Morgan Stanley assesses a better-than-expected 4Q margin and a better overall outlook, and raises its target to $8.50 from $8.10.

The 2H margin was around 4bps better than the analyst forecast and the "exit" margin was "well in excess" of a strong 4Q margin. This outcome increases the broker's confidence in leverage to higher interest rates and benefits from deposit pricing.

The Overweight rating is unchanged. Industry view: Attractive.

Target price is $8.50 Current Price is $7.59 Difference: $0.91
If BOQ meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.82, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Ord Minnett rates BOQ as Hold (3) -

Despite a strong share price reaction following FY22 results for Bank of Queensland, Ord Minnett sees limited upside potential and better interest rate leverage for the major banks. The Hold rating is unchanged.

The broker raises its target to $8.00 from $7.80 after a large uplift in the 4Q net interest margin (NIM) and after management indicated the exit NIM was higher again.

The 2H cash net profit was a -5% miss versus the analyst's forecast as the higher NIM was more than offset by lower non-interest income, as well as higher costs and impairment expenses.

Target price is $8.00 Current Price is $7.59 Difference: $0.41
If BOQ meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $8.82, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Morgan Stanley rates CBA as Underweight (5) -

A positive margin outcome and commentary from Bank of Queensland supports Morgan Stanley's positive view on near-term margin trends for the major banks, particularly in relation to deposit pricing benefits.

For CommBank, the Underweight rating and $83.50 target price are maintained. Industry View Attractive.

Target price is $83.50 Current Price is $96.29 Difference: minus $12.79 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $90.47, suggesting downside of -7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.4

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

Ord Minnett rates CBA as Hold (3) -

Ord Minnett sets higher target prices for the four major Australian banks after gaining increased confidence from Hold-rated Bank of Queensland's FY22 result.

The broker sees significant near-term interest rate leverage and potential net interest margin expansion from a slow repricing of deposit products. A potential lack of credit quality issues, until (possibly late) 2023, provides further confidence for earnings upside.

CommBank is rated last behind Accumulate-rated National Australia Bank in Ord Minnett's order of preference. The target rises to $94 from $90 and the Hold rating is maintained.

Target price is $94.00 Current Price is $96.29 Difference: minus $2.29 (current price is over target).
If CBA meets the Ord Minnett target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $90.47, suggesting downside of -7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.4

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

Morgan Stanley rates CSL as Overweight (1) -

CSL reiterated FY23 profit guidance of US$2.4bn-US$2.5bn at its AGM. This figure excludes guidance for Vifor earnings (and transaction costs), which will be provided at a market briefing on October 17.

The broker cites a number of factors that should keep margins compressed, including inflationary costs, staffing constraints and higher cost of plasma. Logistics and supply chain challenges are also expected to be a headwind.

The Overweight rating and $323 target are retained. Industry View: In-line.

Target price is $323.00 Current Price is $279.70 Difference: $43.3
If CSL meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $324.80, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Credit Suisse rates DBI as Outperform (1) -

A ten-year pricing deal with coal mining customers announced by Dalrymple Bay Infrastructure has exceeded Credit Suisse's initial pricing expectations by 19%.

The company lifted its dividend guidance 10% for the next twelve months, anticipating long-term annual dividend growth of 3-7%.

The broker's bull and bear valuations of $3.40 and $2.67 per share are dependent on whether pricing is reset at the end of the ten years.

The Outperform rating is retained and the target price increases to $3.15 from $2.60.

Target price is $3.15 Current Price is $2.32 Difference: $0.83
If DBI meets the Credit Suisse target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $2.85, suggesting upside of 23.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

A positive margin outcome and commentary from Bank of Queensland supports Morgan Stanley's positive view on near-term margin trends for the major banks, particularly in relation to deposit pricing benefits.

For National Australia Bank, the Equal-weight rating and $27.20 target price are maintained. Industry View Attractive.

Target price is $27.20 Current Price is $29.88 Difference: minus $2.68 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $31.90, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Ord Minnett rates NAB as Accumulate (2) -

Ord Minnett sets higher target prices for the four major Australian banks after gaining increased confidence from Hold-rated Bank of Queensland's FY22 result.

The broker sees significant near-term interest rate leverage and potential net interest margin expansion from a slow repricing of deposit products. A potential lack of credit quality issues, until (possibly late) 2023, provides further confidence for earnings upside.

National Australia Bank ranks number one in Ord Minnett's order of preference. The target rises to $33.70 from $32.70 and the Accumulate rating is maintained.

Target price is $33.70 Current Price is $29.88 Difference: $3.82
If NAB meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $31.90, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Citi rates NHF as Neutral (3) -

Citi expects investment earnings for nib Holdings from its roll-up of NDIS plan managers will partially offset the dilution caused by the $150m in new equity raised for the strategy. So far, the first small manager acquired is Maple Plan.

The company also issued a 1Q FY23 trading update, which the analyst feels continues to demonstrate robust revenue growth and the
maintenance of strong margins.

Once the broker incorporates into forecasts the recently-announced premium give-back and a negative 1Q mark-to-market, the target falls to $7.45 from $7.80. Neutral.

Target price is $7.45 Current Price is $7.51 Difference: minus $0.06 (current price is over target).
If NHF meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.61, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

Credit Suisse rates NHF as Neutral (3) -

nib Holdings has announced a $150m equity raise to fund expansion in the NDIS Plan Manager segment. Credit Suisse is supportive of the strategy, finding the segment a sensible one for expansion, but warns it is unlikely to materially impact earnings before FY25. A first acquisition has been agreed, with further under negotiation.

Policyholder growth for both Australian and New Zealand resident health insurance in the first quarter exceeded the broker's estimates, but margins were lower than expected.

The Neutral rating is retained and the target price decreases to $7.53.

Target price is $7.53 Current Price is $7.51 Difference: $0.02
If NHF meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $7.61, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

Ord Minnett rates NHF as Lighten (4) -

Profits were again boosted for nib Holdings, notes Ord Minnett. following a 1Q update showing very benign claims. It's felt these low claims and the covid release outweigh the give-backs (after the pandemic restricted access to medical services).

The Lighten rating and target price of $7.50 are retained after the broker also allows for a $150m capital raising at $6.90/share. Funds are to be deployed into acquisitions of NDIS plan managers, of which Maple Plan is the first.

Target price is $7.50 Current Price is $7.51 Difference: minus $0.01 (current price is over target).
If NHF meets the Ord Minnett target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.61, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

UBS rates NHF as Neutral (3) -

According to UBS, a 1Q trading update by nib Holdings revealed subdued claims and the best policy growth in seven years, with a rebound for both Travel and International within Australian residents health insurance (arhi).

The gross written premium (GWP) run-rate for Travel is well ahead of pre-covid levels, notes the analyst.

The company also announced a $150m capital raise to fund acquisitions for a NDIS market entry. To reflect this raising and the trading update, the target is reduced to $7.70 from $8.10. Neutral.

Target price is $7.70 Current Price is $7.51 Difference: $0.19
If NHF meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.61, suggesting upside of 15.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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

Macquarie rates ORA as Outperform (1) -

Macquarie is anticipating Orora will reiterate full year growth guidance at its upcoming annual general, expecting Australasia earnings to be flat year-on-year but North America to be up 7%.

The broker will look for further detail on North American earnings given commentary that manufacturing weakness would be taken into consideration. The broker expects positive underlying momentum, a full year of price rises and strong distribution business performance to offset weakness. 

The Outperform rating and target price of $3.93 are retained.

Target price is $3.93 Current Price is $3.00 Difference: $0.93
If ORA meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $3.75, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Macquarie rates STX as Outperform (1) -

With reserve certification for Strike Energy's South Erregulla asset coming in lighter than Macquarie had expected, the broker expects proving up more gas will be key for the company. 

Strike Energy will undergo drilling in the second quarter in a bid to increase volumes, which the broker expects to improve confidence. The company also appears to still be waiting on environmental approvals for West Erregulla. 

The Outperform rating is retained and the target price decreases to $0.45 from $0.53.

Target price is $0.45 Current Price is $0.24 Difference: $0.21
If STX meets the Macquarie target it will return approximately 88% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Morgan Stanley rates WBC as Overweight (1) -

A positive margin outcome and commentary from Bank of Queensland supports Morgan Stanley's positive view on near-term margin trends for the major banks, particularly in relation to deposit pricing benefits.

For Westpac, the Overweight rating and $23.00 target price are maintained. Industry View Attractive.

Target price is $23.00 Current Price is $22.41 Difference: $0.59
If WBC meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $24.88, suggesting upside of 7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates WBC as Hold (3) -

Ord Minnett sets higher target prices for the four major Australian banks after gaining increased confidence from Hold-rated Bank of Queensland's FY22 result.

The broker sees significant near-term interest rate leverage and potential net interest margin expansion from a slow repricing of deposit products. A potential lack of credit quality issues, until (possibly late) 2023, provides further confidence for earnings upside.

Westpac is rated third behind Accumulate-rated National Australia Bank in Ord Minnett's order of preference. The target rises to $23.60 from $22.80 and the Hold rating is maintained.

Target price is $23.60 Current Price is $22.41 Difference: $1.19
If WBC meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $24.88, suggesting upside of 7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Ord Minnett rates WTC as Accumulate (2) -

Ord Minnett identifies some normalisation of pricing from Container Trade Statistics data, showing average container pricing was flat in August.

The broker points out traffic to the WiseTech Global's CargoWise One platform picked up in September, and the longer-term trend remains positive.

The Accumulate rating and $64 target are retained.

Target price is $64.00 Current Price is $54.76 Difference: $9.24
If WTC meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $58.43, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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