Australian Broker Call

UBS rates ALQ as Neutral (3) -

ALS Ltd is set to expand its life sciences footprint in the US and Europe with the acquisitions of York Analytical Laboratories and Wessling Holding. The -$225m acquisitions will be funded through existing debt facilities.

The former will see ALS Ltd increase exposure to the North American PFAS testing market, while the latter expands geographic reach in Germany, France and Switzerland.

As per UBS, the acquisitions align with the company's target to emphasise life sciences growth, but the broker does expect the purchase will weigh on margins in the short term.

The Neutral rating and target price of $13.30 are retained.

Target price is $13.30 Current Price is $13.05 Difference: $0.25
If ALQ meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $12.29, suggesting downside of -6.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Bell Potter rates COI as Speculative Buy (1) -

Helped along by a recent equity placement, Comet Ridge has sufficient cash liquidity to take both Mahalo projects through permitting and to a final investment decision (FID), in Bell Potter's view.

The company is advancing development options at its 100%-owned Mahalo North gas project.

Joint venture partner Santos ((STO)) is also taking the Mahalo joint venture (57% Comet Ridge) through Concept Select phase in preparation for Front End Engineering Design.

The Speculative Buy rating is maintained and the target rises to 27c from 26c.

Target price is $0.27 Current Price is $0.21 Difference: $0.06
If COI meets the Bell Potter target it will return approximately 29% (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 GLN as Outperform (1) -

Galan Lithium has completed its $1.5m share purchase plan following a recent $18m placement. With the company reporting a cash balance of $16m as of December, Macquarie expects it is sufficienlty funded near term as negotiations around the Glencore financing facility continue.

Due diligence is taking longer than Macquarie had intially anticipated. The broker maintains a base case assumption of a US$80m prepayment. 

The Outperform rating and target price of 60 cents are retained.

Target price is $0.60 Current Price is $0.38 Difference: $0.225
If GLN meets the Macquarie target it will return approximately 60% (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 GMD as Outperform (1) -

According to Macquarie, Genesis Minerals has a clear focus on delivering its 5-10 year outlook, with the company stressing that any deviations from its outlined plan would likely provide upside. 

The broker recently visited the company's Leonora operations, which are estimated to reach nameplate capacity of 1.4m tonnes in FY27, although expected to reach a producton capacity of 1.3m tonnes in FY25 and FY26.

Macquarie also points out the Admiral open pit, which feeds into the Leonora mill, is expected to have a grade increase on the horizon.

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

Target price is $2.00 Current Price is $1.81 Difference: $0.195
If GMD meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 4.7% (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

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

As both the general stockmarket and in particular the technology sector have rallied since Bell Potter last updated its valuation for Infomedia in February, the broker increases valuation multiples for the company.

The broker downgrades the rating for Infomedia to Hold from Buy as the new target of $1.80, up from $1.75, is only around 4% ahead of the latest share price. No earnings forecast changes are made.

The analyst expects a good FY24 result with reasonable margin expansion on high-single-digit revenue growth.

Target price is $1.80 Current Price is $1.78 Difference: $0.025
If IFM meets the Bell Potter target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $1.95, suggesting upside of 9.6% (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

Citi rates PMV as Buy (1) -

Citi raises its target for Premier Investments to $36 from $30.20 following "operationally sound" 1H results where earnings (EBIT) came in 5% ahead of management's own guidance.

The increase in the broker's target also reflects a higher multiple for Smiggle where the next leg of growth should come from a store rollout in Indonesia.

A higher multiple is also applied to Peter Alexander given the UK launch will be the first of several offshore expansions.

A potential demerger for both brands could be structured in a way to minimise dis-synergies, suggests Citi.

A Buy rating is maintained for Premier Investments.

Target price is $36.00 Current Price is $31.07 Difference: $4.93
If PMV meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $30.30, suggesting downside of -7.6% (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

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

While management has been notified clients are looking to redeem -$1.4bn from funds under management (FUM) in the coming
months, Bell Potter has raised its target to $1.20 from $1.13.

The broker explains an expected -$20m reduction in costs from the company's first phase of a turnaround program has a large positive impact on earnings, due to operational gearing.

The -20% share price fall in reaction to the announced redemptions is overdone, believes Bell Potter, given an improving
risk/return trade outlook. The rating is upgraded to Buy from Hold.

Target price is $1.20 Current Price is $1.03 Difference: $0.17
If PTM meets the Bell Potter target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $1.15, suggesting upside of 7.9% (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

Shaw and Partners rates RFG as Buy (1) -

In the opinion of Shaw and Partners, Krispy Kreme’s McDonald’s deal in the US draws attention to the donut wholesale and e-commerce opportunity for Retail Food in Australia.

McDonald’s in the US has announced a partnership with Krispy Kreme to sell Krispy Kreme donuts (three flavors) in all McDonald restaurants in the US by 2026.

The analyst sees a limited impact on Retail Food should McDonald’s Australia and Krispy Kreme Australia reach a similar arrangement locally.

The Buy rating for Retail Food and the 10c target are maintained.

Target price is $0.10 Current Price is $0.08 Difference: $0.024
If RFG meets the Shaw and Partners target it will return approximately 32% (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

UBS rates RWC as Buy (1) -

Despite Reliance Worldwide's recent share price performance, UBS remains positive on the stock, feeling an elevated multiple is less of a constraint amid improving earnings.

The broker sees the majority of Reliance Worldwide's earnings drivers as improving rather than declining, and believes the company's Euopean and Middle East holdings are moving closer to a recovery which should provide operating leverage.

The EMEA operations went through a restructure at the end of the first half to cater for further volume declines and a soft outlook, a move the broker feels was sensible and indicative that management has not wavered from its cost focus.

The Buy rating is retained and the target price increases to $6.50 from $5.40.

Target price is $6.50 Current Price is $5.69 Difference: $0.81
If RWC meets the UBS target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.43, suggesting downside of -5.5% (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

Citi rates WBC as Neutral (3) -

Citi suggests investors will have difficulty assessing the financial and operational progress of Westpac's Project Unite, which aims to simplify, reduce complexity and decommission duplicated technology systems.

The near-term impact of the project on the consensus FY25 cost forecasts will also be unclear, believe the analysts.

Management expects the group investment spend will rise to -$2bn per annum over FY25-28 from -$1.8bn in FY24. However, Citi reminds investors the bank has disappointed on costs in recent years, and management lacks credibility in this space.

The Neutral rating and target price of $22.25 are retained.

Target price is $22.25 Current Price is $26.00 Difference: minus $3.75 (current price is over target).
If WBC meets the Citi target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $24.20, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in September.

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 WBC as Underperform (5) -

Additional disclosure around the scope, timing and required spend of Westpac's technology transformation program has outlined an anticipated -$3bn cost, to be spread over FY24-28. Planned annual investment spend of -$2bn should be largely unchanged.

Macquarie expects the program will prove a positive for Westpac, but given the success of the program will not be determined for years expects the execution risk valuation discount will persist in the medium term.

The broker also points out it will be key that Westpac does not fall behind peers in other areas, with all banks either maintaining or increasing investment spend.

The Underperform rating and target price of $26.00 are retained.

Target price is $26.00 Current Price is $26.00 Difference: $0
If WBC meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $24.20, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in September.

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 WBC as Underweight (5) -

While the annual investment spend contained within Westpac's technology simplification update is in line with expectations, according to Morgan Stanley, benefits will be hard for investors to quantify.

The aim is to close the cost to income ratio gap to banking peers, note the analysts.

Project Unite will run for five years from FY24-28. The bank's overall investment spend per year will be -$1.8bn in FY24 and -$2bn thereafter, with Unite accounting for around 30% of the total.

The broker's rating for Westpac is Underweight. Target $22.40. Industry View: In-Line.

Target price is $22.40 Current Price is $26.00 Difference: minus $3.6 (current price is over target).
If WBC 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 $24.20, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates WBC as Hold (3) -

Westpac is striving to close the cost/income ratio gap to peers by implementing the Project Unite technology simplification plan, which aims to improve customer and employee experiences and boost shareholder returns.

More than 15 years after purchasing Saint George Bank, observes Ord Minnett, Westpac is spending close to -$3bn by FY28 to integrate systems and processes.

The analyst forecasts Westpac's cost/income ratio will improve to 46% by FY27 from 49% currently. For comparison, the broker points out CommBank ((CBA)) and National Australia Bank ((NAB)) had ratios below 44% in FY23.

Hold and $28 target retained.

Target price is $28.00 Current Price is $26.00 Difference: $2
If WBC meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $24.20, suggesting downside of -7.0% (ex-dividends)

The company's fiscal year ends in September.

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