Australian Broker Call

Morgans rates AMS as Add (1) -

As a result of first half revenue guidance by Atomos, Morgans makes material upgrades to forecasts.

The broker forecasts revenue of $65.2m in FY21, which implies $37.2m of revenue in the second half.

Pleasingly for the analyst, an increased and sustainable revenue run-rate was achieved with a limited contribution from new products. The company flagged further products will be released in the second half.

The target price is increased to $1.32 from $1.08. The Add rating is unchanged.

Target price is $1.32 Current Price is $1.05 Difference: $0.27
If AMS meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates BEN as Hold (3) -

Bendigo and Adelaide Bank released its regulatory capital report for the September quarter. Post the release, Ord Minnett has updated its model with net profit forecasts increased by 8-9% over the next three years to reflect lower impairment expenses.

According to the broker, the bank's investment case depends on whether it can grow its loan book quickly enough to offset front-book margin pressures better than its peers and still manage to pay a reasonable dividend.

Hold recommendation is maintained with the target price rising to $8.30 from $7.

Target price is $8.30 Current Price is $8.90 Difference: minus $0.6 (current price is over target).
If BEN meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.89, suggesting downside of -11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

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

Macquarie notes revenue trends remain strong into the holiday season and are likely to stay elevated while households redirect spending. 

For Breville Group, the broker expects strong consumer demand to continue, expected to push the re-stocking benefit into 2021 in some markets.

Rating is upgraded to Outperform from Neutral with the target rising to $27 from $26.

Target price is $27.00 Current Price is $24.08 Difference: $2.92
If BRG meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $27.80, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Macquarie rates CWY as Outperform (1) -

Cleanaway Waste Management presented some key aspects of its Western Sydney energy from waste facility, expected to cost circa -$700m and process 500kt of waste. The facility will generate 55MW in power and reduce 390kpta of carbon emissions.

Macquarie likes Cleanaway Waste Management for its long term exposure to a maturing waste management industry landscape. The broker also thinks the company is well placed when it comes to benefiting from the policy tilt towards supporting alternatives to landfill. 

The target is unchanged at $2.55. Outperform retained.

Target price is $2.55 Current Price is $2.39 Difference: $0.16
If CWY meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates CWY as Accumulate (2) -

Cleanaway Waste Management hosted its first virtual investor strategy session and the focus was energy from waste (EfW). The company plans to construct an EfW facility in Western Sydney that can generate 58MW of power via treating up to 500kt of waste.

The project would be the first major EfW facility on the East Coast and will lead to net carbon emissions reduction of circa 390kt. Management expects the facility to deliver a "double-digit equity return".

The broker maintains its Accumulate rating with the target price unchanged at $2.60.

Target price is $2.60 Current Price is $2.39 Difference: $0.21
If CWY meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.52, suggesting upside of 4.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Citi rates DMP as Sell (5) -

Citi found the investor briefing emphasised the retention of customers as well as the digital opportunity. While agreeing Domino's Pizza sales can hold up, same-store sales growth is expected to be very low in the second half of FY21 and into the following year.

This may place downward pressure on the price/earnings ratio, in the broker's opinion. The company has indicated that scale is sufficient in all markets except Belgium and Denmark and it can now undertake national TV advertising.

The German business stood out, with one of the highest average sales per store, per week. Sell rating reiterated. Target is $67.40.

Target price is $67.40 Current Price is $74.02 Difference: minus $6.62 (current price is over target).
If DMP meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.36, suggesting downside of -13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Credit Suisse rates DMP as Underperform (5) -

Domino's Pizza provided no trading update in its AGM although Credit Suisse notes some commentary that may have potential to shift assumptions towards stronger store growth over the medium term.

Incremental costs that were present in the second half of FY20 also seem to have disappeared so profit leverage could be stronger. While the stock screens expensive the update is considered incrementally positive.

There are no specific catalysts that would lead to a de-rating and the broker retains an Underperform rating and $58.71 target.

Target price is $58.71 Current Price is $74.02 Difference: minus $15.31 (current price is over target).
If DMP meets the Credit Suisse target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.36, suggesting downside of -13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

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

Domino's Pizza Enterprises expects the shift in customers to digital delivery from restaurants and takeaway to continue post-covid. Growth drivers include store rollouts, marketing and technology.

Despite strong double-digit earnings growth, Macquarie finds the valuation support to be modest. The broker believes absent any M&A activity, further expansion may be difficult.

With the stock trading around Macquarie's target price of $72.10, the broker upgrades to Neutral from Underperform.

Target price is $72.10 Current Price is $74.02 Difference: minus $1.92 (current price is over target).
If DMP meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.36, suggesting downside of -13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

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

After an investor day update, Morgan Stanley higlights managements commentary that earnings leverage in Japan has been significant, given the weighting to corporate stores.

The broker notes franchisee profitability has been very strong globally and particularly in Japan and Germany. A general increase in ticket size is considered to have improved profitability, even in periods of subdued same store sales growth.

The analyst believes this should drive strong demand from franchisees for more stores.

The Equal-weight rating and target price of $70 are unchanged. Industry view is Cautious.

Target price is $70.00 Current Price is $74.02 Difference: minus $4.02 (current price is over target).
If DMP meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $72.36, suggesting downside of -13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Ord Minnett rates DMP as Upgrade to Buy from Hold (1) -

Looking at Domino’s Pizza Enterprises' recent share price underperformance, Ord Minnett upgrades its rating to Buy from Hold.

The broker expects the company to enjoy multi-year earnings growth led by store expansion, growth in same-store-sales (SSS) and operating earnings margin expansion. 

The target price remains unchanged at $85.

Target price is $85.00 Current Price is $74.02 Difference: $10.98
If DMP meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $72.36, suggesting downside of -13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Citi rates ELD as Initiation of coverage with Buy (1) -

Citi considers resilient earnings growth and return on capital attractive features of Elders. This is underpinned by above-average livestock prices and beneficial seasonal conditions.

Synergies from acquisitions remain the driver of medium-term earnings growth, primarily through the backward integration of generic private-label crop protection and animal health products.

This integration could add $18m to operating earnings by FY22, in Citi's view. The broker initiates coverage with a Buy rating and $13 target.

Target price is $13.00 Current Price is $10.48 Difference: $2.52
If ELD meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $12.89, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Credit Suisse rates GPT as Downgrade to Neutral from Outperform (3) -

Given GPT Group's relatively high exposure to Victoria, Credit Suisse suspects part of its recent rally could be on the back of the re-opening.

No 2020 guidance has been provided although Credit Suisse expects 2021 earnings will be meaningfully stronger without new government-mandated restrictions. Earnings headwinds remain in the retail and CBD office segments for the sector as a whole.

GPT is seeking to raise its weighting to the logistics sector while lowering its exposure to office.

The broker downgrades to Neutral from Outperform in the wake of the rally and raises the target to $4.83 from $4.29.

Target price is $4.83 Current Price is $4.72 Difference: $0.11
If GPT meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.54, suggesting downside of -2.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Ord Minnett rates LYC as Buy (1) -

Lynas Corp's AGM has made Ord Minnett reconsider the potential of the US light tender as well as think about the growth options beyond the current Lynas 2025 project scope.

Noting the multi-year high commodity prices and a significant war chest, the broker considers the company well-placed to capitalise on some incremental growth options post-2023. 

Ord Minnett retains its Buy rating with a target of $4.20.

Target price is $4.20 Current Price is $3.78 Difference: $0.42
If LYC meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates M7T as Add (1) -

Morgans highlights Mach7 Technologies provided positive commentary around product positioning and indicated a solid pipeline of tenders.

The integration of Client Outlook is on track, with $2m in cost synergies identified.

The broker highlights the company's solutions provide advantages for radiologists in an environment where demand for teleradiology and telehealth are at all-time highs due to covid-19.

The analyst makes no changes to forecasts.

The Add rating and target price of $1.49 are unchanged.

Target price is $1.49 Current Price is $1.27 Difference: $0.22
If M7T meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates MGR as Outperform (1) -

Credit Suisse remains of the view that Mirvac is attractive because of its leverage to urbanisation, along with commercial development capabilities.

The broker assesses management has called the property cycle well, maintaining a strong balance sheet with gearing at 22.8%.

Growth drivers, nevertheless, are not considered short-term and the industrial development pipeline, worth $ 1.2bn, is about the years beyond FY22.

Outperform retained. Target is raised to $2.69 from $2.41.

Target price is $2.69 Current Price is $2.58 Difference: $0.11
If MGR meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.66, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Credit Suisse rates MTS as Outperform (1) -

Credit Suisse finds several under-appreciated features of the outlook including accelerated investment by the independent food retail sector and cash from temporarily elevated working capital.

Higher rates of reinvestment have potential for a more lasting effect on retailer competitiveness. Typically, supermarket refurbishment generates 10-15% increases in sales and so a small acceleration would improve the sector and put a growth trajectory on surer footing.

Meanwhile, the outlook for trade hardware has improved materially since the FY20 result. Credit Suisse retains an Outperform rating and raises the target to $3.77 from $3.62.

Target price is $3.77 Current Price is $2.95 Difference: $0.82
If MTS meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $3.49, suggesting upside of 17.0% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Ord Minnett rates NCM as Accumulate (2) -

Newcrest Mining completed the stage 3 expenditure requirement to increase its interest in the Havieron joint venture project (Western Australia) to 60%. Ord Minnett notes spending a further US$20m along with a pre-feasibilty study (PFS) will see this increase to 70%.

A maiden resource is expected in the coming weeks with exploration decline expected to start by the year-end. The broker considers Havieron as one of the more exciting new gold discoveries and a key project in the company’s project pipeline adding material value.

Ord Minnett maintains its Accumulate recommendation on Newcrest with a target price of $34.90

Target price is $34.90 Current Price is $26.93 Difference: $7.97
If NCM meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $34.34, suggesting upside of 23.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.5

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

Macquarie rates ORA as Neutral (3) -

Macquarie retains its Neutral rating with the target reduced to $2.71 from $2.80.

Australian wine producers have been asked to place security deposits on future wine exports to China while China’s anti-dumping investigation is carried out. China forms circa 15% of wine exports on a volume basis but this increases when looked at from a value basis.

Orora is Australia’s largest wine glass bottle manufacturer with Treasury Wine ((TWE)) one of Orora's key customers. Macquarie estimates less than 10% of Orora's bottled wine goes to China.

Macquarie notes key variables here include whether tariff imposition still sees some sales to China and the level of future demand take-up from alternate markets in Asia, UK, USA and Australia.

The broker assesses Orora to be more volume than value exposed with winemakers potentially impacted by lower pricing/margins away from the premium Chinese market. Operating income for FY21 is forecast to be reduced by -3% for Australasian beverages.

Target price is $2.71 Current Price is $2.65 Difference: $0.06
If ORA meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.76, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Morgans rates RED as Add (1) -

Morgans revises target prices for gold stocks after a review of the sector.

The broker sees the current decline in gold shares as driven by investor sentiment (regarding vaccines) rather than a change to the underlying fundamentals of the gold producers and their profitablity. Volatility is considered a trading opportunity.

As gold companies report second quarter production and earnings in January, the analyst thinks the strength of cash flows will remind the market of the margins producers are still making.

In the financial model, Morgans moves the base case gold price to US$1,750/oz and the Australian dollar to $0.74.

The broker believes Red 5 remains attractively priced for the large, long life King of the Hills project in Western Australia. The company is finalising project debt financing, and has cash flow from the operating Darlot mining centre.

The Add rating is unchanged and the target price is decreased to $0.41 from $0.52.

Target price is $0.41 Current Price is $0.25 Difference: $0.16
If RED meets the Morgans target it will return approximately 64% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates RMS as Add (1) -

Morgans revises target prices for gold stocks after a review of the sector.

The broker sees the current decline in gold shares as driven by investor sentiment (regarding vaccines) rather than a change to the underlying fundamentals of the gold producers and their profitablity. Volatility is considered a trading opportunity.

As gold companies report second quarter production and earnings in January, the analyst thinks the strength of cash flows will remind the market of the margins producers are still making.

In the financial model, Morgans moves the base case gold price to US$1,750/oz and the Australian dollar to $0.74.

Ramelius Resources is the broker's preferred pick across Morgans gold coverage. The company is considered to have been a consistent performer and recently a serial over-achiever against guidance.

With a track record of cost discipline, and a number of growth studies underway across its asset base, the company should continue to produce strong cash flow even at a weaker gold price, explains the analyst.

The Add rating is retained and the target is decreased to $2.44 from $2.86.

Target price is $2.44 Current Price is $1.69 Difference: $0.75
If RMS meets the Morgans target it will return approximately 44% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Morgans rates RRL as Add (1) -

Morgans revises target prices for gold stocks after a review of the sector.

The broker sees the current decline in gold shares as driven by investor sentiment (regarding vaccines) rather than a change to the underlying fundamentals of the gold producers and their profitablity. Volatility is considered a trading opportunity.

As gold companies report second quarter production and earnings in January, the analyst thinks the strength of cash flows will remind the market of the margins producers are still making.

In the financial model, Morgans moves the base case gold price to US$1,750/oz and the Australian dollar to $0.74.

Regis Resources is in the middle of a capital intensive year as it sets its operations for a 400koz run-rate from FY22, highlights the broker. 

A miss against guidance in the first quarter saw the share price fall, but the analyst notes fundamentals are still strong and McPhillamys' progress provides a pathway to further growth.

The Add rating is unchanged and the target price is decreased to $4.57 from $5.74.

Target price is $4.57 Current Price is $3.69 Difference: $0.88
If RRL meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $5.30, suggesting upside of 34.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

UBS rates SHV as Buy (1) -

Led by strong cost management across the almond division and corporate overheads, Select Harvests' FY20 result was 7% ahead of UBS's operating income and net profit estimates. 

The broker assesses the current pricing environment to be depressed due to covid related market access issues and the large US crop. 

UBS retains its Buy rating with the target price trimmed to $7.65 from $7.90.

Target price is $7.65 Current Price is $5.89 Difference: $1.76
If SHV meets the UBS target it will return approximately 30% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Macquarie notes revenue trends remain strong into the holiday season and are likely to stay elevated while households redirect spending.

The broker believes Temple & Webster Group will continue to grow with online sales penetration remaining a prominent feature. The broker is waiting for the market to find the balance between a slowing revenue growth rate with continued share gains and increasing profitability.

Macquarie downgrades its rating to Neutral from Outperform with the target rising to $10.60 from $10.50.

Target price is $10.60 Current Price is $9.84 Difference: $0.76
If TPW meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

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

Credit Suisse assesses the news is unlikely to get worse now that China has announced import tariffs of 169% as provisional measures on the company's wines.

The broker assesses the best case scenario is for the tariffs to be removed in four months time should the anti-dumping investigation warrant their removal.

The broker models lost volumes in China and discounting in Australia and the UK, particularly in commercial and premium categories as around 11.5m cases of Australian wine exported to China will need to be re-directed.

Rating is upgraded to Outperform from Neutral, with the main risk that the tariffs persist for longer than expected. Target is raised to $11.00 from $8.50.

Target price is $11.00 Current Price is $8.59 Difference: $2.41
If TWE meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $9.43, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 the wake of the interim deposit-rate (Chinese tariff) of 169% for Treasury Wine Estates, Morgan Stanley draws inferences from a company conference call. These include the company can maintain margins for Penfolds.

The broker highlights the balance sheet is sound and the company believes the current capital structure allows capacity to hold inventory and invest in capex/accretive acquisitions.

Additionally, the company will not materially reduce its 2021 luxury inventory intake plans. This suggests to the analyst confidence in an ability to reallocate luxury wine.

At this stage, Morgan Stanley assumes the company's sales into China will essentially cease.

The analyst reduces FY21/22/23 earnings (EBITS) estimates by -18%, -24% and -23%, respectively.

Overweight rating maintained and the target price is reduced to $10 from $11. Industry view: Cautious.

Target price is $10.00 Current Price is $8.59 Difference: $1.41
If TWE meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $9.43, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates TWE as Hold (3) -

Morgans lowers forecasts after China's provisional tariff makes Australian wine uncompetitive and creates material earnings uncertainty for Treasury Wines Estates.

While the company has a mitigating strategy, the broker believes this will take two to three years to fully implement and will require additional investment.

Morgans downgrades profit (NPAT) forecasts for FY21-23 by -32.7%, -31.2% and -23.8%, respectively. Additionaly, the analyst removes forecast dividends in FY21 and FY22, as the company will likely seek to preserve cash. 

The Hold rating is unchanged and the target price is decreased to $9 from $9.35.

Target price is $9.00 Current Price is $8.59 Difference: $0.41
If TWE meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $9.43, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates TWE as Downgrade to Lighten from Hold (4) -

In response to the 169.3% provisional anti-dumping measure rate imposed by China, Treasury Wine Estates has decided to grow its global priority markets via reallocation. The company has also decided to change its operating model and reduce costs. 

With the outcome worse than expected, Ord Minnett finds the risk posed by China's recent measures difficult to price.

Also. with access to the high-growth China market limited and reallocation plans expected to take time, the broker has reduced its rating on Treasury Wine to Lighten from Hold with the target price falling to $8 from $9.

Target price is $8.00 Current Price is $8.59 Difference: minus $0.59 (current price is over target).
If TWE meets the Ord Minnett target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.43, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

UBS rates TWE as Downgrade to Neutral from Buy (3) -

UBS downgrades its rating on Treasury Wine Estates to Neutral from Buy.

Although the broker sees value in the stock ex-China, UBS also concedes there is uncertainty with respect to ex-China operating income (on account of increased supply).

Following the circa 169% provisional tariffs on China exports, the broker sees pricing risk in the short term, as about $1bn of wine exports are re-allocated both offshore and domestically. 

With almost $1.5bn in liquidity and circa $226m of near-term maturities, UBS considers the risk to the balance sheet manageable.

The target price is increased to $9.20 from $8.80.

Target price is $9.20 Current Price is $8.59 Difference: $0.61
If TWE meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $9.43, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Morgans rates VUK as Reduce (5) -

Virgin Money UK has reported FY20 underlying profit (NPAT), which is significantly lower than the forecast of Morgans. This was considered due to a significantly higher-than-expected credit impairment charge.

The broker sees better value in some of the major Australian banks as the macroeconomic outlook in the UK is highly uncertain, and the company is trading on a stretched valuation.

The analyst upgrades EPS forecasts for FY21 and FY22 by 7% and 23%, respectively. This is largely the result of a lower forecast credit impairment charge in light of the potential vaccines.

The Reduce rating is unchanged and the target is increased to $2 from $1.30.

Target price is $2.00 Current Price is $2.31 Difference: minus $0.31 (current price is over target).
If VUK meets the Morgans target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.35, suggesting downside of -2.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

This company reports in GBP. 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