Australian Broker Call

Citi rates ANN as Buy (1) -

Citi has revised down earnings-per-share forecasts for Ansell, citing late deployment of acquisition capital and an extension of the buyback period.

Earnings-per-share forecasts fall -1% in FY19, -13% in FY20 and -6% in FY21.

The broker expects organic growth to continue at roughly 8%. Risks remain given weakness in the global manufacturing PMI and in the EU auto sector, but Citi says the stock is trading at fair value and expects a degree of stability over the next year.

Buy rating retained and target price rises to $31 from $28.50.

Target price is $31.00 Current Price is $26.86 Difference: $4.14
If ANN meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $26.80, suggesting downside of -0.2% (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: 0.4

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

Credit Suisse rates AZJ as Outperform (1) -

The Supreme Court has ruled that Aurizon is allowed to charge above-regulation fees on the Wiggins Island Rail Project it built to support the coal terminal at Gladstone.

Customers had agreed to the premium from the start but miners have disputed the ruling since 2016, meaning Aurizon has to date not collected the estimated $20.8m in pre-tax earnings it is due.

The broker retains Outperform and increases its target to $5.55 from $5.50.

Target price is $5.50 Current Price is $5.39 Difference: $0.11
If AZJ meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.93, suggesting downside of -8.6% (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) -

Analysts at Deutsche Bank note the Supreme Court has ruled in the company's favour in a long-running dispute over claims for additional WIRP fees. In addition, the ACCC has also lodged an appeal against the Federal Court’s decision to dismiss the ACCC’s proceeding over the sale of the Acacia Ridge terminal to Pacific National.

In response, the analysts have upgraded EBIT forecasts by an estimated $15m pa (c2%) to account for the additional WIRP fees. They also pushed out the receipt of the proceeds from the Acacia Ridge sale (net $170m) to FY20. Buy rating and $5.40 target maintained.

Target price is $5.40 Current Price is $5.39 Difference: $0.01
If AZJ meets the Deutsche Bank target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.93, suggesting downside of -8.6% (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

Citi rates BXB as Buy (1) -

Citi reports that US inflation has largely normalised and updates its Brambles US Cost Monitor to May 2019.

Lumber inflation and transport inflation have both fallen, auguring well for CHEP America's margin recovery.

Meanwhile, the broker notes US Food and Beverage retailer inventories grew 3.4% over the year to April - 240 basis points above the 2019 calendar-year average - ahead of Citi's forecasts.

Citi estimates 5% revenue growth for CHEP so once declining inflation, automation and procurement savings are brought to bear, margins are forecast to improve. Buy retained. Target price steady at $13.50.

Target price is $13.50 Current Price is $12.91 Difference: $0.59
If BXB meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.17, suggesting downside of -5.7% (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: 0.4

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

Credit Suisse rates FBU as Neutral (3) -

Fletcher Building's investor day started well, with management upbeat on Australia and the initiatives the company is undertaking to set up for a turnaround, but the wind went out of the sails when FY19 earnings guidance came in at around half that of FY18.

Given only minimal improvement will likely be seen in FY20, the broker warns investors face delays in both the timeframe for turning Australia around and for a positive earnings trajectory of what was already a low base in FY18.

Neutral retained, target falls to NZ$5.17 from NZ$5.43.

Current Price is $4.66. Target price not assessed.

Current consensus price target is N/A

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: 0.0

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

Macquarie rates FBU as Neutral (3) -

Macquarie reduces Fletcher Building's target price and earnings estimates to account for new significant items and a breakdown in FY19 guidance composition.

Guidance while unchanged overall included a new -$100m restructuring charge (A$80m and NZ$20m) after its -$145m loss on RTG/Formica.

Australia's FY19 earnings before interest and tax is now guided to be $55m, compared with the broker's $69m forecast. Earnings per share forecasts fall -43% for FY19 and -4%, -6% and -8% across FY20-FY22 on core downgrades.

The rating kicks in at Neutral. Target eases to NZ$5 from NZ$5.47.

Current Price is $4.66. Target price not assessed.

Current consensus price target is N/A

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: 0.0

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

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

The Investor Day didn't provide much in terms of positive inspiration, it appears, with Morgan Stanley analysts reporting there was some good news, and then there was some not so good news.

The company did announce the buyback the analysts had been expecting, while also avoiding the downgrade that had been feared. The not so good news came in the form of operational details suggesting "an alarming deterioration in Australian profitability".

Morgan Stanley points out the cycle remains a headwind for the company and delivery will thus be challenging. Equal-weight rating maintained. Target is NZ$5.25 (up from NZ$5). Cautious industry view.

Current Price is $4.66. Target price not assessed.

Current consensus price target is N/A

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: 0.0

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

UBS rates GBT as Neutral (3) -

Bravura Solutions ((BVS)) has again increased its indicative offer for GBST, to $3.00 from a prior $2.72 and an original $2.50. The price represents a 7% premium to the current trading price but a 52% premium to the April price when the initial bid was made, the broker notes.

GBST has informed it has also received offers from other parties, and the Bravura bid is only good until the end of today (June 28). The broker has lifted its target to the $3.00 offer. Neutral retained.

Target price is $3.00 Current Price is $2.96 Difference: $0.04
If GBT meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.93, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

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

Growthpoint Properties has announced a $150m institutional placement and a $15m share purchase plan.

The company reaffirmed FY19 guidance and guided to an FY20 rise of 1.8%.

Macquarie breaks this down into 4% dilution from the placement; 2.6% accretion from a $475m breaking of swap contracts to a lower hedged debt rate; and 1% accretion from the acquisition of a $50m metro office building. Combined, the broker estimates the impact to be a less-than -1% dilution in earnings before the deployment of proceeds.

The broker tinkers with earnings-per-share estimates and the target price rises 15.3% to $4.08 from $3.54 to reflect stronger cap rate compression assumptions.

Broker upgrades to Neutral from Underperform, expecting the company to benefit from the rosier bond outlook.

Target price is $4.08 Current Price is $4.12 Difference: minus $0.04 (current price is over target).
If GOZ 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 $3.85, suggesting downside of -6.6% (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 GXY as Upgrade to Neutral from Underperform (3) -

Macquarie downgrades Galaxy Resources earnings-per-share estimates -20%, -3% and -3% across FY21-23 following news of delayed spodumene shipments, recent softness in the seaborne spodumene market, and higher debt and associated interest expenses following the Alliance equity investment.

Twp shipments of spodumene concentrate have been shipped from Mt Caittlin this quarter, another has been pushed into the September quarter. The target price falls to $1.30 from $1.50. Upgrade to Neutral from Underperform on valuation grounds.

Target price is $1.30 Current Price is $1.22 Difference: $0.08
If GXY meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.13, suggesting upside of 74.6% (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: 0.6

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

Morgans rates HRL as Hold (3) -

Morgans raises HRL Holdings' target price to 11c from 10c after the company confirmed it was comfortable with second-half earnings consensus and should deliver its +84% second-half skew.

Management reports very good progress across laboratories, sampling and software divisions, thanks to a strong performance from Analytica.

The broker views potential upside for FY20 but retains a Hold rating awaiting confirmation given the stock is trading at fair value.

Target price is $0.11 Current Price is $0.12 Difference: minus $0.01 (current price is over target).
If HRL meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates IFL as Neutral (3) -

IOOF has sold its 70% stake in Ord Minnett to a consortium of private investors headed by Ord Minnett management for a consideration of $115m.

Should the company deploy the proceeds to a buyback, Macquarie estimates the deal would be roughly neutral to earnings per share. The deal was struck on a sale price-earnings multiple of 9.6x.

Strategically, the deal makes sense given stockbroking falls outside of the core wealth management business but the company will miss the contribution in its Advice division. No information has been received regarding indemnities.

The broker downgrades earnings-per-share forecasts -4.2% for FY20 and -5.6% for FY21. Target price is steady at $5.85 given the lower balance sheet risk and bond yield. Neutral rating retained despite the weaker share price, the broker spying earnings risks from lower platform fees and potential delays on the OnePath deal ((ANZ)).

Target price is $5.85 Current Price is $5.17 Difference: $0.68
If IFL meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.53, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates IFL as Sell (5) -

IOOF has sold its 70% stake in Ord Minnett to a consortium of private investors, including Ords management. Ords offered little cross-benefit to the fund manager, the broker suggests, and the proceeds will help bolster the balance sheet ahead of expected remediation obligations.

However the sale does leave IOOF increasingly leveraged to platform-related earnings which the broker believes could compress by up to -30% over the next five years. Sell and $5.05 target retained.

Target price is $5.05 Current Price is $5.17 Difference: minus $0.12 (current price is over target).
If IFL meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.53, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in June.

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

Morgan Stanley rates LNK as Overweight (1) -

Morgan Stanley has long held a positive view on Link Administration and this hasn't changed. The analysts do acknowledge the issues with the Woodford Equity Income Fund in the UK are likely to weigh on the share price in the near term.

For the analysts, the UK issues merely highlight what life is like inside the highly regulated nature of the businesses Link operates. Overweight rating retained and $8.20 target maintained. Industry view is In-Line.

Target price is $8.20 Current Price is $5.03 Difference: $3.17
If LNK meets the Morgan Stanley target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $6.99, suggesting upside of 39.0% (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 MGR as Outperform (1) -

Macquarie resumes coverage of Mirvac following the end of its restriction period, kicking off with an Outperform recommendation.

The broker believes the $750m raising will be productively employed, noting a strong pipeline of project opportunities, the company identifying seven (four residential) totalling $2bn.

Macquarie says assuming a 15% development margin, the company is looking at a $1.7bn cost base.

Mirvac typically seeks 50% capital partners, which translates to a capital requirement of $850m, roughly in line with the raising.

The broker believes the residential calls are sound, noting regulatory headwinds have abated and the company's strong track record in sub-sector allocation.

Macquarie downgrades funds from operations estimates -0.1% in FY19; -5.4% in FY20; and -7.2% in FY21 to reflect greater debt pay down.

Target price is $3.46.

Target price is $3.46 Current Price is $3.13 Difference: $0.33
If MGR meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.90, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in June.

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

Deutsche Bank rates PGH as Buy (1) -

Pact Group has affirmed full year earnings guidance plus debt refinancing and Deutsche Bank analysts see this as a "significantly positive" for the company. The analysts argue the risk of a deeply discounted equity raising has just been removed.

Deutsche Bank is of the view the company now has the capacity to continue planned rationalisation activities and complete existing growth projects. Next thing to focus on for management is to firm up the Network Redesign project and improve earnings consistency, suggest the analysts.

The broker retain its Buy rating noting the stock is trading at a -40% discount to its valuation of $4.25 per share.

Target price is $4.25 Current Price is $2.81 Difference: $1.44
If PGH meets the Deutsche Bank target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 16.2% (ex-dividends)

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

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

Pact Group has refinanced a $380m July 2020 debt facility out to January 2022, reducing the likelihood of an equity raising. Given guidance has been confirmed, Macquarie upgrades to Neutral from Underperform and increases the target price to $2.81 from $2.66.

The broker says the company can now look forward to higher earnings to reduce debt levels, rather than equity, and says it should be aided by a slow recovery in raw material costs, network redesign, full-year impact of the TIC acquisition, and crates expansion with Aldi.

Macquarie downgrades earnings-per-share estimates -6% and -4% to account for the expected growth trajectory, awaiting input from the new chief executive officer Sanjay Dayal.

Target price is $2.81 Current Price is $2.81 Difference: $0
If PGH meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.27, suggesting upside of 16.2% (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

Citi rates RSG as Buy (1) -

Resolute Mining's Syama advanced underground gold mine project in Mali has hit commercial production rates. The mine is expected to be fully commissioned within the next three months.

Syama Underground is reported to be the world's first fully underground gold mine and uses surface-controlled remote drilling, loading and haulage - some of which have yet to be integrated (a potential risk according to the broker).

Citi recently raised its short and medium-term gold-price forecasts and boosts the target price to $2.05. Buy, high risk rating retained.

Target price is $2.05 Current Price is $1.34 Difference: $0.71
If RSG meets the Citi target it will return approximately 53% (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

Citi rates SCG as Sell (5) -

Scentre Group has announced an $800m buyback, set to commence after the first-half results are in.? Scentre will also sell three Sydney CBD office towers to Blackstone funds for $1.52bn (an estimated 10% premium to December 2018 book value). 

Citi says the sale makes sense given the group's retail focus, however, the towers are the company's largest and most productive assets. This and other sales should see the company's gearing settle at roughly 30%, which will increase again after the buyback is executed.

The company says the earnings per share dilution should be about -0.4c prior to redeployment. Full-year dilution could be as much as -0.8c or -3%. The broker says the buyback could add 2% to 3% to earnings per share if fully implemented, but notes REIT executions have been wanting in the past. 

Citi retains a Sell rating given its negative view on shopping centre values and operating conditions. Target price edges up to $3.47 from $3.43.

Target price is $3.47 Current Price is $3.86 Difference: minus $0.39 (current price is over target).
If SCG meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in December.

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 SCG as Sell (5) -

Scentre Group announced the disposal of its Sydney CBD Office Towers for $1.52b plus an $800m buy-back. Deutsche Bank analysts maintain the Sell rating with a $3.69 target.

It is the analysts' view that, while the sale will initially reduce gearing back to circa 30% and alleviate market concerns over the current credit ratings, structural changes impacting on the retail landlords' industry should remain a concern for investors.

Target price is $3.69 Current Price is $3.86 Difference: minus $0.17 (current price is over target).
If SCG meets the Deutsche Bank target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting downside of -0.7% (ex-dividends)

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 SCG as Underperform (5) -

Scentre Group has sold its Sydney office towers at a 10% premium to book value and will use the funds for an $800m buyback.

Macquarie says deployment of the funds into a buyback is odd given market headwinds. Scentre Group is already more heavily geared than its peers, and a heavy balance sheet remains a risk.

The broker estimates the dilution to be largely offset by accretion.

The broker cuts FY19 earnings per share forecasts -2% in FY19; -4.4% in FY20; and -2.7% in FY21. Neutral rating and $3.55 target price retained.

Target price is $3.55 Current Price is $3.86 Difference: minus $0.31 (current price is over target).
If SCG meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates SCG as Hold (3) -

Hold rating and $4.30 target maintained as Scentre Group sold three of its Sydney CBD office assets for $1.52bn to Blackstone and announced a new $800m buyback.

The analysts note the buyback will largely compensate for the dilution, even though the sale was done at a 13% premium to the December 2018 book value of the assets.

Ord Minnett is now looking for an uptick in retail sales, with the analysts suggesting this could come through in the second half following house price stabilisation and potential RBA interest-rate cuts.

Target price is $4.30 Current Price is $3.86 Difference: $0.44
If SCG meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates SCG as Neutral (3) -

Scentre has sold the office component of its Sydney City asset and has announced an $800m buyback. The key benefit of asset sales, which now total $2.1bn since May, is downside protection were the stock to trade at a steeper discount to net tangible asset value than its current -12%, the broker suggests.

This does not dismiss the broker's concern about an appropriate level of gearing in a deteriorating operating environment. The broker believes consensus dividend growth forecasts are too optimistic. Neutral retained, target rises to $3.79 from $3.74.

Target price is $3.79 Current Price is $3.86 Difference: minus $0.07 (current price is over target).
If SCG meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting downside of -0.7% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates SDF as Hold (3) -

Steadfast has negotiated an agreement with the Insurance Brokers Network Australia (IBNA) and Ord Minnett believes the proposed deal should increase earnings and improve the strength of the Steadfast network, but there are risks as well, predominantly from regulatory changes that might yet occur.

The broker retains its Hold rating but lifts the price target tro $3.15 from $2.90. Estimates have been slightly adjusted with the analysts highlighting Steadfast is paying a multiple on an uncertain revenue stream that could, in some scenarios, turn out value-dilutive.

Target price is $3.15 Current Price is $3.53 Difference: minus $0.38 (current price is over target).
If SDF meets the Ord Minnett target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.35, suggesting downside of -5.1% (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 SHL as Hold (3) -

Sonic Healthcare has sold its 85% stake in GLP Systems. Deutsche Bank retains its Hold rating while lifting the price target to $26.32 (was $24.70).

Deutsche Bank analysts find the sales price was below their expectations, speculating the weak performance by the business might be responsible.

Target price is $26.32 Current Price is $27.02 Difference: minus $0.7 (current price is over target).
If SHL 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 $26.13, suggesting downside of -3.3% (ex-dividends)

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

UBS rates SHL as Sell (5) -

Sonic Healthcare has sold its 85% share in a German lab automation business, reflecting a decision by management that lab automation is not core to the company's clinic services, the broker notes. Proceeds of $48m will be used to pay down euro debt.

The broker notes Sonic leads Australian pathology by market share and possibly by margins, and the outlook is favourable. However valuation is stretched, noting that Sonic is a price-taker with services funded by Medicare. Sell retained, target rises to $25.15 from $24.90.

Target price is $25.15 Current Price is $27.02 Difference: minus $1.87 (current price is over target).
If SHL meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.13, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

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

UBS rates VOC as Upgrade to Buy from Neutral (1) -

UBS suggests the reason Vocus has de-rated is the swiftness with which recent suitor AGL Energy ((AGL)) and others before it, had walked away from a deal after access to due diligence, raising concern in the market. But the broker believes the key reason AGL bailed is that it could not hit its rate of return requirement at the $4.85 bid price.

While UBS still has its own reservations about the business, the broker upgrades to Buy now the stock has pulled back far enough that returns for a suitor are more achievable, implying an unpriced option value on enterprise execution. Target unchanged at $3.85.

Target price is $3.85 Current Price is $3.27 Difference: $0.58
If VOC meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $3.73, suggesting upside of 14.2% (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