Australian Broker Call
October 05, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
THIS REPORT WILL BE UPDATED SHORTLY
Last Updated: 10:35 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Credit Suisse rates ALL as Neutral (3) -
Credit Suisse observes the company's social casino revenues appear to have maintained growth momentum through the September half.
The broker's modelling 23% revenue growth in the second half and suspects its estimate can be bettered.
Neutral retained. Target is $22.60.
Target price is $22.60 Current Price is $21.29 Difference: $1.31
If ALL meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $24.56, suggesting upside of 15.8% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 35.00 cents and EPS of 87.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 66.2, implying annual growth of 20.1%. Current consensus DPS estimate is 33.7, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 32.0. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 72.00 cents and EPS of 102.27 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 99.8, implying annual growth of 50.8%. Current consensus DPS estimate is 46.5, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 21.2. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CMW as Underperform (5) -
The company will sell its 9.8% stake in Investa Office ((IOF)) for $4.65 per security to the manager, ICPF.
Macquarie believes the sale removes a point of uncertainty for Cromwell, although the execution of the IPO of the European REIT that is targeted for listing in Singapore still overhangs the stock.
As gearing remains elevated, Macquarie retains an Underperform rating. Target is $0.90.
Target price is $0.90 Current Price is $0.96 Difference: minus $0.063 (current price is over target).
If CMW meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.93, suggesting downside of -2.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 8.30 cents and EPS of 7.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.6, implying annual growth of -51.8%. Current consensus DPS estimate is 8.2, implying a prospective dividend yield of 8.5%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 8.50 cents and EPS of 7.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.7, implying annual growth of 1.3%. Current consensus DPS estimate is 8.2, implying a prospective dividend yield of 8.5%. Current consensus EPS estimate suggests the PER is 12.5. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates FLT as Underweight (5) -
Morgan Stanley's survey suggests that higher mortgage rates will put more pressure on household consumption and encourage borrowers with interest-only loans to switch.
The broker expects consumers to cut back on holidays, entertainment and dining and expects that Flight Centre will be one of the stocks affected.
Underweight retained. Target is reduced to $38 from $40. Industry view is Cautious.
Target price is $38.00 Current Price is $44.41 Difference: minus $6.41 (current price is over target).
If FLT meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $44.80, suggesting upside of 0.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 153.00 cents and EPS of 255.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.5, implying annual growth of 9.6%. Current consensus DPS estimate is 152.9, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 17.8. |
Forecast for FY19:
Morgan Stanley forecasts a full year FY19 dividend of 171.00 cents and EPS of 284.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 274.4, implying annual growth of 9.5%. Current consensus DPS estimate is 168.0, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 16.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates HT1 as Outperform (1) -
AdShel has lost the Yarra Trams contract and has, separately, been appointed the preferred partner of the Metro Trains Melbourne contract.
Macquarie observes this is a major loss and equates to a negative impact of -13.0% and -14.5% on 2018 group operating earnings and earnings per share respectively. The 2019 impact is less pronounced as the benefits of from the MTM contract roll through.
The broker retains a Outperform rating, believing the stock is good value and a highly attractive acquisition target, and reduces the target to $2.45 from $2.85.
Target price is $2.45 Current Price is $1.80 Difference: $0.655
If HT1 meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $2.70, suggesting upside of 50.8% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 7.80 cents and EPS of 18.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.4, implying annual growth of N/A. Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 8.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 7.20 cents and EPS of 17.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.5, implying annual growth of -12.9%. Current consensus DPS estimate is 7.2, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 9.2. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IEL as Outperform (1) -
Macquarie reviews modelling assumptions following additional disclosures in the annual report.
The broker believes the company's global infrastructure and established relationships in student placement and English-language testing are relatively unique. This should provide a platform to leverage the strong underlying rates of industry growth that are expected.
Outperform retained. Target rises to$5.95 from $5.55.
Target price is $5.95 Current Price is $5.70 Difference: $0.25
If IEL meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $5.32, suggesting downside of -6.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 14.70 cents and EPS of 20.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.9, implying annual growth of 20.0%. Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 28.7. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 16.70 cents and EPS of 22.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.5, implying annual growth of 13.1%. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 25.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates IOF as Buy (1) -
Cromwell ((CMW)) has sold down its interest in Investa Office, with Investa Property acquiring 59.3m securities of the 60.4m sold.
Citi believes the sale of Cromwell stake reduces the prospect of a broader deal in the near term and should also ease investor concerns about an overhang in Investa shares. The purchase of the stake by Investa Property is considered less positive than if the stake had been purchased by another strategic shareholder.
By rating and $5.20 target retained.
Target price is $5.20 Current Price is $4.39 Difference: $0.815
If IOF meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $4.83, suggesting upside of 10.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 20.30 cents and EPS of 30.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of -61.8%. Current consensus DPS estimate is 20.4, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 14.9. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 20.80 cents and EPS of 30.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.0, implying annual growth of -4.4%. Current consensus DPS estimate is 20.5, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 15.6. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates JHX as Outperform (1) -
Macquarie has conducted a proprietary survey of US siding distributors, finding strong support for the James Hardie brand and a high propensity to stock the product.
The broker considers the supply issues are a short-term setback as, while customers have noted the shortages, they remain willing to re-stock the company's product.
Outperform retained. Target is $20.80.
Target price is $20.80 Current Price is $17.42 Difference: $3.38
If JHX meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $19.65, suggesting upside of 12.9% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 49.87 cents and EPS of 77.17 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 76.4, implying annual growth of N/A. Current consensus DPS estimate is 52.0, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 22.8. |
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 56.43 cents and EPS of 94.09 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 88.7, implying annual growth of 16.1%. Current consensus DPS estimate is 57.2, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 19.6. |
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
Credit Suisse rates PLG as Outperform (1) -
A new analyst assumes coverage of the stock. Credit Suisse notes one of the company's challenges as a stand-alone vehicle is that it is resourced for a level of funds under management in excess of its current $1.2bn.
Hence, in a takeover situation, the broker believes there would be material synergies on offer.
Outperform retained. Target is lifted to $1.00 from $0.92.
Target price is $1.00 Current Price is $1.01 Difference: minus $0.008 (current price is over target).
If PLG meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 7.00 cents and EPS of 9.00 cents. |
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 7.00 cents and EPS of 8.00 cents. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates TCL as Neutral (3) -
Citi has undertaken a detailed analysis of the WestConnex project. The broker understands the sale process is likely to be fluid but is unable to achieve a positive internal rate of return.
The inclusion of a 34-year concession for the M5 is attractive and closes the gap to some extent but, even including this, Citi still believes the full project will be negative to net present value.
The broker expects Transurban to be a participant in the process of selling down a 51% stake in the road but believes more is needed for the project to be attractive to the company. Neutral rating and $12.62 target maintained.
Target price is $12.62 Current Price is $11.67 Difference: $0.95
If TCL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $12.70, suggesting upside of 9.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 57.00 cents and EPS of 21.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.3, implying annual growth of 107.7%. Current consensus DPS estimate is 56.1, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 47.9. |
Forecast for FY19:
Citi forecasts a full year FY19 dividend of 63.50 cents and EPS of 25.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 31.0, implying annual growth of 27.6%. Current consensus DPS estimate is 61.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 37.6. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| ALL - | ARISTOCRAT LEISURE | Neutral - Credit Suisse | Overnight Price $21.29 |
| CMW - | CROMWELL PROPERTY | Underperform - Macquarie | Overnight Price $0.96 |
| FLT - | FLIGHT CENTRE | Underweight - Morgan Stanley | Overnight Price $44.41 |
| HT1 - | HT&E LTD | Outperform - Macquarie | Overnight Price $1.80 |
| IEL - | IDP EDUCATION | Outperform - Macquarie | Overnight Price $5.70 |
| IOF - | INVESTA OFFICE | Buy - Citi | Overnight Price $4.39 |
| JHX - | JAMES HARDIE | Outperform - Macquarie | Overnight Price $17.42 |
| PLG - | PROPERTYLINK GROUP | Outperform - Credit Suisse | Overnight Price $1.01 |
| TCL - | TRANSURBAN GROUP | Neutral - Citi | Overnight Price $11.67 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 3. Hold | 2 |
| 5. Sell | 2 |
Thursday 05 October 2017
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