Australian Broker Call

Citi rates ALL as Buy (1) -

Citi increases its earnings forecasts for Aristocrat Leisure by between 4-6% over the forecast period as operating conditions in the Americas remain favourable. The target is increased to $52.70 from $44.70. Buy.

The broker highlights a "remarkable" ramp up of NFL which has boosted unit growth in Class III gaming operations.

In Social Casino, RAID is now growing, courtesy of recent game changes, though the portfolio overall has turned negative likely due to competition from the recently launched Monopoly Go, explain the analysts.

Target price is $52.70 Current Price is $45.91 Difference: $6.79
If ALL meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $47.20, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

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

Morgans rates AVG as Add (1) -

If management continues to execute, as it did in the 1H, Morgans sees material upside for shares of Australian Vintage. Underlying earnings (EBITS) in the half came in 41% ahead of the broker's forecast and FY24 guidance was reiterated.

The broker highlights innovation, price rises, an improved product mix, efficiencies and cost-out more than offset lower volumes, inflation and an unfavourable currency.

The Add rating is maintained. The target slips to 55c from 58c due to higher forecast shipping costs in FY24 and lower applied multiples, partly offset by a valuation roll-forward.

Target price is $0.55 Current Price is $0.39 Difference: $0.16
If AVG meets the Morgans target it will return approximately 41% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates AX1 as Upgrade to Overweight from Equal-weight (1) -

As Accent Group's younger customers have been most negatively impacted by the challenging macroeconomic conditions over the last few years, Morgan Stanley believes they should benefit most in a cyclical recovery.

The broker is optimistic on upcoming consumer spending, which should drive a recovery in margins on fixed-cost leverage for Accent Group. 

Longer-term, the analysts like the store-rollout story for new formats such as Nude Lucy and Stylerunner and established brands Skechers and Platypus.

The rating is upgraded to Overweight from Equal-weight and the target increased to $2.45 from $1.95. Industry view: In-Line.

Target price is $2.45 Current Price is $1.95 Difference: $0.5
If AX1 meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $2.36, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Morgan Stanley rates CSL as Overweight (1) -

Morgan Stanley's proprietary Plasma Collection Centre Data for March show plasma volumes for the industry continued to grow.

Only February industry centre rollout data are available, showing an increase of 6.2% year-on-year.

For CSL, the Overweight rating and $310 target are unchanged. Industry view: In-Line.

Target price is $310.00 Current Price is $281.87 Difference: $28.13
If CSL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $313.40, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Macquarie rates GMD as Outperform (1) -

A softer first half result from Genesis Minerals than expected, reports Macquarie. Earnings missed the broker's forecast by -24% at $48m, while net profits missed by -36% at $15m. 

The broker explains higher than expected operating costs of $143m drove the earnings miss. The broker considers the company's $155m cash position as of the end of the period as strong.

Macquarie notes Genesis Minerals should be well capitalised to increase capacity at Admiral through the calendar year.

The Outperform rating and target price of $2.00 are retained. 

Target price is $2.00 Current Price is $1.90 Difference: $0.105
If GMD meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $1.91, suggesting upside of 1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Macquarie rates GWA as Outperform (1) -

A focus on plumbers remains a key component of GWA Group's strategy, points out Macquarie, with the company continuing to increase engagement with this group. GWA Group sees plumber-led innovation as a key enabler to win the demographic.

The broker explains GWA Group aims to increase its share in multi-residential over the long-term amid an improving structural outlook, and given its already firm commercial position. 

The Outperform rating is retained and the target price increases to $3.10 from $2.70.

Target price is $3.10 Current Price is $2.80 Difference: $0.3
If GWA meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates MIN as Buy (1) -

Following a further review after 1H results for Mineral Resources, Citi makes numerous forecasts changes resulting in a new target of $76.10, up from $71.00. The Buy rating is maintained.

The target is increased thanks largely to a valuation roll-forward, despite lowered earnings (EBITDA) forecasts across FY24-26 of between -1-8%. Adjustments were also made to terminal rate assumptions within the broker's mining services financial model.

Target price is $76.10 Current Price is $66.31 Difference: $9.79
If MIN meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $69.51, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Citi rates MTS as Neutral (3) -

Metcash's sales for the ten months to February 25 rose by 0.9% on the previous corresponding period, which Citi notes is the same growth rate as reported for the nine months of trading at the February update.

The broker still prefers Coles Group ((COL)) and Woolworth Group ((WOW)) over Metcash and retains a Neutral rating. Like those two preferred companies, Metcash announced the rollout of a media business, which is expected to yield $30m of EBIT by FY29.

The $4.00 target price is maintained.

Target price is $4.00 Current Price is $3.93 Difference: $0.07
If MTS meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Macquarie rates MTS as Upgrade to Outperform from Neutral (1) -

The recent acquisitions of Superior Food, Alpine and Bianco by Metcash should provide medium-term growth, says Macquarie. In particular, the broker sees Superior Food as a key entrypoint to the $21bn food service industry for Metcash.

The company's successful experience in operating retail stores provides Macquarie with confidence in management's ability to add value in the retail side of the food industry, with management outlining a desire to extend value in this segment. 

The company has lifted its capital expenditure targets to -$235m for FY25 and FY26 each.

Following a period of research restriction, Macquarie upgrades to an Outperform rating and the target price increases to $4.30 from $3.90.

Target price is $4.30 Current Price is $3.93 Difference: $0.37
If MTS meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates MTS as Buy (1) -

Following Metcash's investor day, UBS has updated its expected FY24 and FY25 earnings for the group by -1.1% and 0.5% respectively, on a combination of lower hardware and higher food earnings.

The company's trading update included contributions from the Superior Foods acquisition, with total group sales growth up just 0.9% over the first nine months of the financial year.

Metcash outlined a number of growth initiatives being implemented, including using its existing platform for growth through mergers and acquisitions. 

The Buy rating is retained and the target price increases to $4.25 from $4.00.

Target price is $4.25 Current Price is $3.93 Difference: $0.32
If MTS meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.14, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates NXT as Buy (1) -

NextDC has announced the acquisition of a new data centre located in Sydney, at a cost of -$184m. As per UBS, the centre provides potential capacity of 13.5 megawatts. 

The purchase includes both the land and the existing data centre core and shell, with the data hall space spanning 4,000 square metres.

The Buy rating and target price of $20.10 are retained.

Target price is $20.10 Current Price is $17.48 Difference: $2.62
If NXT meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $18.77, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgan Stanley rates PLS as Underweight (5) -

While yesterday's offtake agreement announcement with Sichuan Yahua Industrial Group is a welcome development, Morgan Stanley remains wary of Pilbara Minerals' un-contracted tonnes given ongoing lithium price weakness.

The broker believes the new announcement will lower to around 50%, from 63%, 2025/26 tonnes yet to be contracted. In the new  contract, all spodumene concentrate sold will be based on prevailing market prices.

The Underweight rating and $3.30 target are retained. Industry view: Attractive.

Target price is $3.30 Current Price is $4.17 Difference: minus $0.87 (current price is over target).
If PLS meets the Morgan Stanley target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.64, suggesting downside of -13.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Morgan Stanley rates PMV as Overweight (1) -

In anticipation of 1H results for Premier Investments due on March 26, Morgan Stanley believes the risk/reward ratio is favourable given the share price is not currently allowing for two potential catalysts.

The broker is expecting both an earnings beat against the consensus forecast for $208m as 1H guidance preceeded positive key selling periods like Christmas. Also, based on peer results, consumer spending over January and February was ahead of consensus forecasts.

Target $32.00. Overweight rating. Industry view: In-Line.

Target price is $32.00 Current Price is $29.40 Difference: $2.6
If PMV meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $25.60, suggesting downside of -15.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Ord Minnett rates REG as Buy (1) -

The Aged Care Taskforce's Final Report is advocating a user pays regime for residential care and Ord Minnett believes this will pan out as a positive for the sector, including for Regis Healthcare.

The broker continues to see risks to the upside for Regis Healthcare, with occupancy levels improving, an ongoing expansion of funding streams, plus an M&A pipeline.

Target rises to $4.25 from $3.90, Buy retained.

Target price is $4.25 Current Price is $4.00 Difference: $0.25
If REG meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Macquarie rates RMS as Neutral (3) -

Ramelius Resources is anticipating its Mt Magnet, Cue and Penny assets can produce a total 1.5m ounces of gold over a ten-year mine life, a sizeable difference from Macquarie's estimated 1.0m ounces.

The company also anticipates a higher all in sustained cost than the broker at $1,700 per ounce, and higher capital expenditure at -$380m.

With stronger production and longer mine life, the broker considers the mine plan mildly positive compared to its prior outlook.

The Neutral rating and target price of $1.60 are retained.

Target price is $1.60 Current Price is $1.57 Difference: $0.03
If RMS meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $1.97, suggesting upside of 26.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates RMS as Buy (1) -

Ramelius Resources released a ten-year plan for Mt Magnet and Ord Minnett uses the term "impressive". The share price would have responded more fiercely if it wasn't for merger-speculation already, argues the analyst.

Ord Minnett is anticipating the current valuation discount will disappear as investors come to appreciate the cash flow outlook.

Price target gains 10c to $2.10. Buy.

Target price is $2.10 Current Price is $1.57 Difference: $0.53
If RMS meets the Ord Minnett target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $1.97, suggesting upside of 26.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Shaw and Partners rates RMS as Buy (1) -

Following upgraded production guidance by Ramelius Resources, Shaw and Partners raises its target price to $2.20 from $2.00 and retains a Buy recommendation.

Management released an updated Mt Magnet 10-year mine plan, which includes an extension to the Penny mine and the recently
acquired Cue project, highlights the broker.

The new plan optimises the mill feed for the Mt Magnet processing hub. This in turn defers lower grade ore from Mt Magnet deposits for higher grade material from the Penny extension as well as material from Cue for the first time, explain the analysts.

Target price is $2.20 Current Price is $1.57 Difference: $0.63
If RMS meets the Shaw and Partners target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $1.97, suggesting upside of 26.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates RWC as Outperform (1) -

Macquarie believes the strong execution, cash performance and operational efficiency gains evident in Reliance Worldwide's first half result have underpinned strong share price performance since the result release, with the stock up 26%.

Despite the rally, the valuation remains undemanding, with the broker pointing out it remains below historical averages. The broker's positive thesis on the stock is based on improving returns for shareholders through to FY26.

The Outperform rating is retained and the target price increases to $6.10 from $5.10.

Target price is $6.10 Current Price is $5.55 Difference: $0.55
If RWC meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $5.25, suggesting downside of -6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Bell Potter rates TLS as Upgrade to Buy from Hold (1) -

While the growth outlook for Telstra Group is not as strong as some comparable companies, says Bell Potter, the stock is starting to look more reasonable. The broker anticipates mid to high single digit earnings growth over FY25, coupled with a dividend yield of 5.0%. 

The broker points out Telstra Group also retains the option of selling part or all of its infrastructure business, which it believes would unlock value. Further, Bell Potter sees little risk in the company not making FY24 guidance. 

The rating is upgraded to Buy from Hold and the target price of $4.25 is retained.

Target price is $4.25 Current Price is $3.79 Difference: $0.46
If TLS meets the Bell Potter target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.38, suggesting upside of 16.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates TSK as Downgrade to Hold from Buy (3) -

Task Group looks set to be acquired by PAR Technology, with the two companies having entered into a scheme implementation agreement.

The agreement gives Task Group shareholders the option to recieve cash consideration for stocks at 81 cents per share, or recieve up to 50% of consideration as stocks in PAR Technology, at a ratio of 0.015 PAR Technology shares for every Task Group share, and the balance paid in cash. 

In the absence of a superior proposal, notes Bell Potter, Task Group's board has unanimously recommended in favour.

The rating is downgraded to Hold from Buy and the target price increases to 85 cents from 59 cents, as the broker's calculations suggest 85c is the implied valuation under the current proposal.

Target price is $0.85 Current Price is $0.79 Difference: $0.065
If TSK meets the Bell Potter target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates TSK as Downgrade to Hold from Buy (3) -

Task Group has effectively agreed to be taken over by PAR Technology Corp by way of a scheme of arrangement. Cash consideration is 81c per share, with an alternative for up to 40% in scrip.

Ord Minnett has raised its own target to 81c and downgrades to Hold from Buy.

Target price is $0.81 Current Price is $0.79 Difference: $0.025
If TSK meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgan Stanley rates TWE as Overweight (1) -

In an interim draft determination, the Ministry Of Commerce, People's Republic Of China (MOFCOM) is proposing to remove Australian wine import tariffs into China.

Given the precedent set by the prior removal of barley/hay tarrifs, Morgan Stanley sees potential for a resumption of shipments within two months.

Management at Treasury Wine Estates noted during 1H results, highlights the broker, any earnings contribution from the removal of tariffs will be minimal in FY24.

Target price is steady at $13.75. Overweight. Industry view: In-line.

Target price is $13.75 Current Price is $12.28 Difference: $1.47
If TWE meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.10, suggesting upside of 5.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates WDS as Neutral (3) -

Ahead of the climate vote in March, Woodside Energy has provided detail on its decarbonisation and new energies goals, but Macquarie warns the company's LNG plants will prove difficult to materially decarbonise.

The company expects net emissions to increase to 7.2m tonnes from 6.2m tonnes through to the end of the decade, but to decline thereafter.

With the market remaining focused on Woodside Energy's reliance on carbon offsets to reduce net emissions, the company intends to reduce its reliance on offsets, but Macquarie notes this will require capital expenditure.

The Neutral rating is retained and the target price decreases to $31.00 from $32.00.

Target price is $31.00 Current Price is $29.10 Difference: $1.9
If WDS meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $33.53, suggesting upside of 15.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.3

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

Citi rates ZIP as Upgrade to Buy from Neutral (1) -

Citi raises its target for Zip Co to $1.40 from 78c and upgrades its recommendation to Buy from Neutral due to stronger total transaction value (TTV) forecasts in the US across FY25 and FY26.

While the broker expects net bad debts will increase in the US as the company pivots its focus to growth (new customers typically have higher losses), offsets should arise from a higher revenue yield and lower funding costs. Stable net transaction margins are anticipated.

Citi also notes management has made good progress with balance sheet repair.

Target price is $1.40 Current Price is $1.28 Difference: $0.12
If ZIP meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $1.30, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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