Australian Broker Call

Macquarie rates APA as Neutral (3) -

After a period of research restriction on APA Group, Macquarie returns with a Neutral rating and $10.13 target price.

The broker updates forecasts to allow for the purchase of Basslink, which although a small step, is the start of the company's electricity transmission strategy.

The analyst expects FY24 and FY25 earnings to lift from near term gas as a transmission fuel, pressure on the gas price and a lift in
capacity.

Target price is $10.13 Current Price is $10.48 Difference: minus $0.35 (current price is over target).
If APA 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 $10.75, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Citi rates ARB as Buy (1) -

Citi draws a positive read-through for ARB Corp from US peer Fox Factory's 3Q results which showed sales growth momentum and a positive outlook for its Powered Vehicles business.

The analyst feels ongoing strength in consumer demand in Fox Factory’s aftermarket channel is reassuring for ARB’s recovery prospects in the 2Q and beyond.

The Buy rating and $39.25 target are unchanged.

Target price is $39.25 Current Price is $27.71 Difference: $11.54
If ARB meets the Citi target it will return approximately 42% (excluding dividends, fees and charges).

Current consensus price target is $33.53, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Ord Minnett rates ARB as Buy (1) -

In the fourth consecutive month of growth, industry data show new vehicle sales increased by 16.9% in October on the previous corresponding period.

Ord Minnett points out within this data, ARB Corp's key segments of SUV and Light Commercial Vehicles grew by 37% and and 11%, respectively.

These figures along with the company's strong order book, should be supportive of FY23 growth for ARB Corp, according to the broker.

The Buy rating and $35 target are unchanged.

Target price is $35.00 Current Price is $27.71 Difference: $7.29
If ARB meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $33.53, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Morgan Stanley rates CBA as Underweight (5) -

In a brief note Morgan Stanley points out CommBank's share price has generally moved in the same direction as Australian housing loan approvals. Monthly approvals have fallen by -24% from their peak at the start of the year, but they are still above pre-covid levels.

Underweight and $85.50 target retained. Industry view: In-Line.

Target price is $85.50 Current Price is $103.05 Difference: minus $17.55 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $93.91, suggesting downside of -8.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Morgan Stanley rates COL as Initiation of coverage with Underweight (5) -

Morgan Stanley "initiates" coverage of Coles Group with an Underweight rating and a target of $13.70, having last updated in June 2021.

The rating is premised on the impact of a weaker consumer trading down, margin pressure as the industry invests in price, cost inflation and elevated near-term capex requirements. The broker's earnings estimates are -6% below consensus.

Within grocery retail, Morgan Stanley prefers Woolworths (also Underweight).

Target price is $13.70 Current Price is $16.18 Difference: minus $2.48 (current price is over target).
If COL meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $17.34, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Macquarie rates CPU as Outperform (1) -

Macquarie observes growth momentum continues as recent data show a gain in market share for Computershare from 1Q Unpaid Principal Balances (UPB), which grew 11.9% compared to 1.7% market growth.

The broker feels market conditions are supportive of a recovery with foreclosure restrictions now lifted, higher mortgage rates and refinancing levels at decade lows.

The Outperform rating and $38.75 target are unchanged.

Target price is $38.75 Current Price is $25.90 Difference: $12.85
If CPU meets the Macquarie target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $29.20, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Morgan Stanley rates CSL as Overweight (1) -

A complex legal battle in the US is now at the point Morgan Stanley believes Akebia's drug vadadustat has made a first step towards approval. Vifor has a licensing arrangement with Akebia for sales of vadadustat.

If ultimately approved, the broker believes vadadustat has the potential to offset any further decline in the CSL Vifor ESA franchise, and
believes that market, in general, assumes that vadadustat will not make an earnings contribution to CSL.

Overweight and $327 target retained. Industry view: In-Line.

Target price is $327.00 Current Price is $275.60 Difference: $51.4
If CSL meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 16.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Morgans rates CSL as Add (1) -

Morgans makes no changes to its Buy rating or $312.20 target following CSL's annual R&D day.

The broker notes the R&D pipeline has grown around 70% (internal efforts and the Vifor acquisition) and management "conservatively" estimates at least ten compounds have the potential to be standard of care for the targeted patient group. 

Target price is $312.20 Current Price is $275.60 Difference: $36.6
If CSL meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $323.95, suggesting upside of 16.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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 CSR as Buy (1) -

Citi assesses a solid 1H operational result from CSR. While other segments were mixed, Building Products registered a 10% beat versus consensus due to strong prices and expanding margins. Guidance in property was upgraded, while Aluminium expectations were lowered. 

While the broker believes the market will be cautious in re-rating the stock, investors are reminded the stock market is forward looking.

We are already three months into what is historically a 13-14 month down cycle and housing stocks tend to outperform 6-7 months before house prices lift, explains the analyst.

The Buy rating and $5.80 target are retained.

Target price is $5.80 Current Price is $4.69 Difference: $1.11
If CSR meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Credit Suisse rates CSR as Outperform (1) -

CSR's September net profit after tax outpaced consensus by 4% and met Credit Suisse's forecasts, thanks to strong margins.

Margin growth reflected both pricing power and good cost control, observes the broker.

Building products proved the star performer, outpacing consensus by 10%.

The broker notes that approvals are still outpacing completions, despite rising interest rates, and expects the building products divisions earnings will be more resilient than expected, at least for the near term, but cuts FY24 EPS more sharply.

Outperform rating retained. Target price falls to $6.10 from $6.40 to reflect the industry derating.

Target price is $6.10 Current Price is $4.69 Difference: $1.41
If CSR meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates CSR as Neutral (3) -

Macquarie assesses 1H results for CSR were strong in light of the cost environment and inclement weather though sees medium-term earnings risk from fast-slowing sales.

Aluminium was weak for the quarter, observes the analyst, while the performance of Building Products was better than expected. The target falls to $4.80 from $4.90. Neutral.

Management issued no quantitative guidance for Building Products, other than the segment entered the 2H with good momentum and cost
inflation can be managed.

Target price is $4.80 Current Price is $4.69 Difference: $0.11
If CSR meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

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

CSR's in-line result featured a solid performance from building products, Morgan Stanley suggests, but weakness in aluminium due to higher input costs.

The broker foresees a sharp decline in housing construction from the middle of 2023. Backlogs will support volumes through FY23 before activity slows. As weakness bites, the robust balance sheet, capital management and property values will likely see CSR more resilient than peers, Morgan Stanley suggests.

Equal-weight retained, target falls to $4.70 from $4.80.

Target price is $4.70 Current Price is $4.69 Difference: $0.01
If CSR meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Ord Minnett rates CSR as Hold (3) -

Ord Minnett observes from CSR's 1H results, previously announced price rises are finally flowing through to revenues for the core Building Products business, which delivered a record 15.3% earnings margin for the segment.

While overall earnings beat the analyst's estimate, the valuation for the Building Products business is full and James Hardie Industries ((JHX)) represents better relative value.

The broker highlights the volatility of costs for the Aluminium segment and expects earnings will be impacted by higher carbon-based input costs for the next 12–18 months.

The target rises to $4.92 from $4.80 and the Hold rating remains.

Target price is $4.92 Current Price is $4.69 Difference: $0.23
If CSR meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

UBS rates CSR as Buy (1) -

UBS saw CSR releasing a "strong" set of interim financials, beating expectations because Building Products enjoyed a better-than-forecast profit margin on the back of stringent cost control and price rises.

With management at the company expecting a strong H2, UBS sticks with its Buy rating and $6.50 price target.

The broker sees potential for upside surprise, also because CSR still has $325m in tax losses that can be used to minimise tax as property gains are realised, points out the broker.

Also, a longer cycle means the company will likely benefit from a recovery in higher margin multi-family volumes, predicts the broker.

Target price is $6.50 Current Price is $4.69 Difference: $1.81
If CSR meets the UBS target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $5.47, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Morgan Stanley rates EDV as Initiation of coverage with Underweight (5) -

Morgan Stanley initiates coverage of Endeavour Group with an Underweight rating and a target of $5.90.

The rating is premised on liquor retail sales reversion, the impact of a weaker consumer on hotel spend, pressure on investment returns and increased regulatory oversight of gaming machines. The broker's estimates are -7% below consensus.

Morgan Stanley is Underweight all of Endeavour, Coles and Woolworths, but among the three prefers Woolworths.

Target price is $5.90 Current Price is $6.98 Difference: minus $1.08 (current price is over target).
If EDV meets the Morgan Stanley target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.03, suggesting upside of 0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Macquarie rates GPT as Outperform (1) -

Following GPT Group's 3Q update, Macquarie feels retail re-leasing spreads will continue to improve as suggested by the current rate of specialty sales growth. Also net property income (NPI) growth should be supported by current Logistics re-leasing spreads.

The broker retains an Outperform rating, notes an attractive dividend yield and expects a share price re-rate from an improvement in Retail and Logistics. The target rises by 2% to $4.78.

Target price is $4.78 Current Price is $4.29 Difference: $0.49
If GPT meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.74, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgan Stanley rates GPT as Underweight (5) -

GPT Group has maintained its FY distribution guidance at its update. Morgan Stanley is surprised by a largely unchanged valuation in Retail and Office.

Retail leasing spreads have improved to -2.9% from -4.9% last half, and are +9% for Industrial. Office occupancy came down to 91.6% from 92%, with larger tenants still evaluating space requirements, the broker notes.

Total retail sales growth for the quarter was up 8.9% on the FY19 September quarter.

Underweight and $4.50 target unchanged. Industry view: In-Line.

Target price is $4.50 Current Price is $4.29 Difference: $0.21
If GPT meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $4.74, suggesting upside of 12.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Citi rates IDX as Buy (1) -

Citi gleans from an organic revenue growth trading update that the recovery for Integral Diagnostics is ongoing, gradual and in line with expectations. Margins remains under pressure due to cost inflation and higher interest rates.

The broker expects the renewal of contracts with four Ramsay Healthcare ((RHC)) hospitals will be viewed positively by the market.

The analyst expects an industry recovery and upside for Integral Diagnostics' margins over time and maintains a Buy rating. The $3.15 target is unchanged.

Target price is $3.15 Current Price is $2.75 Difference: $0.4
If IDX meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.83, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.2

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

Macquarie rates KLL as Neutral (3) -

Macquarie lowers its target for Kalium Lakes to 4c from 6c after 1Q production and sales of sulphate of potash came in below expectations after a period of shutdown for the plant in August for rectification works.

Consultants are assisting the company with plant performance improvement, explains the analyst.

The target also falls as the broker had formerly assumed no uptake of the $12m share purchase plan. The Neutral rating is unchanged.

Target price is $0.04 Current Price is $0.04 Difference: $0.004
If KLL meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates NWS as Outperform (1) -

Credit Suisse shaves News Corp's target price to $38 from $38.10 heading into the September-quarter result, expecting changes at Amazon's warehouse to affect physical book sales, slightly higher investment in News Media and the impact of a higher $US.

EPS forecasts fall more sharply and the broker also lowers its valuation for REA ((REA)).

Outperform rating retained.

Target price is $38.00 Current Price is $26.21 Difference: $11.79
If NWS meets the Credit Suisse target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $33.83, suggesting upside of 29.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Credit Suisse rates ORI as Neutral (3) -

Credit Suisse cuts Orica's target price to $14.55 from $16.67 ahead of the company's FY22 result, towards the lower end of consensus.

The broker expects mixed demand across regions and poor weather across Australia will take their toll.

While Credit Suisse expects Australian margins should be buoyed by stronger prices, the broker also expects higher working capital afrom inventory carrying costs to hit cash conversion.

Looking ahead, the broker expects lower production in FY23 as cyclical headwinds hit metals and quarry, not to mention Orica's Russia exit.

Earnings forecasts fall -0.8% in FY23; -5.0% in FY24; and -2.8% in FY25.

Neutral rating retained.

Target price is $14.55 Current Price is $14.16 Difference: $0.39
If ORI meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $15.96, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Credit Suisse rates PDL as Neutral (3) -

Pendal Group's FY22 result outpaced consensus by 3% but missed Credit Suisse's forecasts by -1%.

The broker says transitory benefits masked and an underlying 1 basis point management fee-margin miss, which means the company was closer to a -8% miss against the broker.

Flow pressure continues, partly exacerbated by a disappointing performance from its International Select strategy, and inflation also weighed on costs.

EPS forecasts fall -12% to -13% to reflect the removal of the buyback.

Neutral rating reiterated on the assumption the merger with Perpetual ((PPT)) will proceed, but the broker warns of -20% to -25% downside should it fail.

Target price falls to $4.80 from $5.20.

Target price is $4.80 Current Price is $4.51 Difference: $0.29
If PDL meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates PDL as No Rating (-1) -

FY22 operating income for Pendal Group was lower than Macquarie expected due to higher employee expenses while revenues were broadly in line.

The broker lowers its EPS forecasts for FY23 and FY24 by -18.7% and -14.8%, respectively, with around -13-14% reductions thereafter
due to removal of $100m buy-back and reduced FY23 performance fees.

A lower exit fee margin and a higher employee compensation ratio also weighed on forecasts, explains the analyst.

Due to research restrictions the broker cannot provide a price target or recommendation.

Current Price is $4.51. Target price not assessed.

Current consensus price target is $4.79, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgans rates PDL as Hold (3) -

FY22 underlying profit for Pendal Group was an around -3.3% miss compared to Morgans forecast.

The group's management fee margin fell materially, notes the analyst, with the 2H reflecting a lower skew to equities, while there were outflows and underperformance in such high-margin segments as US Pooled funds.

The broker points out the short term outlook depends upon the outcome of the merger with Perpetual ((PPT)) , and management expects shareholder support for the union. Should the merger fail, the share price is expected to initially fall by around -12-28%.

Morgans lowers its target to $4.20 from $4.90. Hold.

Target price is $4.20 Current Price is $4.51 Difference: minus $0.31 (current price is over target).
If PDL meets the Morgans target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.79, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Ord Minnett rates PDL as Accumulate (2) -

While underlying FY22 profit was weaker than forecast, Ord Minnett reminds investors near-term prospects depend on the likely
completion of the takeover Scheme of Arrangement with Perpetual ((PPT)).

The analyst feels there is only a low risk attached to deal completion posed by the late entry of a consortium to bid for Perpetual.

The Accumulate rating and $5.10 target are unchanged.

Target price is $5.10 Current Price is $4.51 Difference: $0.59
If PDL meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates PDL as Neutral (3) -

UBS saw Pendal Group releasing FY22 financials in line with forecasts. Management has reiterated its agreement to merge with Perpetual ((PPT)) is legally binding.

UBS offers the suggestion that if the deal with Perpetual succeeds the shares have some 29% upside. If not, there's probably -20% downside.

Only small revisions have been made to forecasts. The broker suggests management needs to keep a close eye on cost control. Target $5.35. Neutral.

Target price is $5.35 Current Price is $4.51 Difference: $0.84
If PDL meets the UBS target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $4.79, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates QAN as Outperform (1) -

Following Qantas Airways' AGM and new FY23 guidance, Macquarie raises its FY23 and FY24 earnings forecasts (EBITDA) by 15% and 14%, respectively.

These changes reflect ongoing revenue per available seat kilometre (RASK) improvement supported by capacity control and rising near-term yields, explains the analyst.

The broker continues to see improved earnings, with the ability to self-fund fleet capex along with capital management initiatives.

The Outperform rating and $7.05 target are unchanged.

Target price is $7.05 Current Price is $5.97 Difference: $1.08
If QAN meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.19, suggesting upside of 19.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Credit Suisse rates REA as Outperform (1) -

Credit Suisse shaves REA Group's target price to $143.00 from $143.80 heading into the September-quarter result.

While the broker believes September was solid, it spies an impending slowdown in October, CoreLogic data revealing a -20% fall in national listings over the month (year on year) and particularly sharp falls in Sydney and Melbourne.

Outperform rating retained, the broker noting the company has been tracking better than CoreLogic data.

Target price is $143.00 Current Price is $119.11 Difference: $23.89
If REA meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $131.36, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates REA as Underperform (5) -

In anticipation of 1Q results due this Wednesday, Macquarie takes 50% of its 1H forecast to arrive at a revenue expectation of $327m, which would be a 24% year-on-year increase.

The broker feels the market is too optimistic on depth penetration in a softer housing market and reiterates its Underperform rating and $91 target.

Target price is $91.00 Current Price is $119.11 Difference: minus $28.11 (current price is over target).
If REA meets the Macquarie target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $131.36, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

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

Global steel and scrap markets have softened, Morgan Stanley notes, providing a more challenging outlook. Turkish scrap prices have
declined by -12% since Sims' FY22 result in August and -46% since March. US scrap prices have declined by -10% since August -43% since March.

Steel and scrap markets are inherently linked to global growth, thus in a slower global growth environment, a rebound in scrap prices is unlikely, the broker suggests.

But Morgan Stanley believes Sims' position within the circular economy and leverage to a greener global steel industry position it well to benefit from these powerful thematics in the medium to longer term. Hence Equal-weight retained on balance.

Target falls to $13 from $19. Industry view: In-Line.

Target price is $13.00 Current Price is $12.17 Difference: $0.83
If SGM meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $15.02, suggesting upside of 17.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Citi rates SQ2 as Buy (1) -

Block's 3Q gross profit beat Citi's estimate by 4.5% and the consensus forecast by 2.5%. Compared to consensus, Square, Cash App and BNPL were a 5% beat, 3% beat and -20% miss, respectively.

The analyst notes the 4Q gross profit outlook is in-line with consensus estimates, though the implied adjusted earnings (EBITDA) outlook is likely $35-$40m above the consensus forecast.

The broker retains its US$135 target and Buy rating.

Current Price is $97.03. Target price not assessed.

Current consensus price target is $130.00, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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 SQ2 as Outperform (1) -

Block's September-quarter result outpaced Credit Suisse's gross profit forecasts and demonstrated improved compound annual growth rate trends for both ex-Afterpay numbers, which the broker says augurs well for stability and exit rates heading into 2023.

The broker raises 2022 earnings forecasts accordingly.

The company also forecast lower expense growth but the broker points to reduced Afterpay estimates and the fact that costs are still growing, albeit more slowly.

Target price falls to $95 from $105. Outperform rating retained.

Current Price is $97.03. Target price not assessed.

Current consensus price target is $130.00, suggesting upside of 37.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Ord Minnett rates THL as Buy (1) -

Ord Minnett revisits its investment thesis for Tourism Holdings Rentals following the recent regulatory approval for the merger with Apollo Tourism & Leisure ((ATL)).

The broker lists an extensive number of positives for the merged entity including an improving RV rental outlook and Tourism Holdings Rentals proven record for delivering solid returns. On the flipside, macroeconomic conditions and supply chain issues may weigh.

While the analyst had previously incorporated Apollo into its forecasts, EPS estimates rise for FY23 and FY24 to reflect FY23 profit guidance and merger synergies.

The target rises to NZ$5.02 from NZ$4.93 and the Buy rating is unchanged.

Current Price is $0.00. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 1.0

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

Citi rates TWE as Neutral (3) -

Based on recent data, Citi sees rising risks for the broader wine industry from a slowing recovery in higher margin channels and the effect of cost of living pressures on consumer discretionary spending.

The analyst points to recent weakness in exports to Treasury Wine Estates key offshore markets and notes the company continues to underperform relative to the broader off-premise US wine industry.

The Neutral rating and $13.50 target are unchanged.

Target price is $13.50 Current Price is $12.68 Difference: $0.82
If TWE meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $14.22, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Morgan Stanley rates WOW as Initiation of coverage with Underweight (5) -

Morgan Stanley "initiates" coverage of Woolworths Group with an Underweight rating and target of $28.50, having last updated in July 2021.

The rating is premised on the impact of a weaker consumer trading down, margin pressure as the industry invests in price and the inflationary pressure on costs. The broker's earnings estimates are -7% consensus.

Morgan Stanley is also Underweight on Coles and Endeavour Group, and Woolworths is the preferred exposure among the three.

Target price is $28.50 Current Price is $32.56 Difference: minus $4.06 (current price is over target).
If WOW meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.59, suggesting upside of 2.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.1

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