Australian Broker Call

UBS rates ALX as Neutral (3) -

Following the material decline in bond yields, UBS is reducing its cost of equity assumptions. The benefit to Atlas Arteria's valuation has been partly offset by some changes to forecasts.

With a relatively short weighted concession life of 21 years, UBS believes the business offers less leverage to declining bond yields. Neutral maintained. Target is raised to $7.85 from $6.90.

Target price is $7.85 Current Price is $8.45 Difference: minus $0.6 (current price is over target).
If ALX meets the UBS target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.67, suggesting downside of -9.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Morgan Stanley rates ANZ as Underweight (5) -

Morgan Stanley assesses major bank PE multiples have re-rated since the federal election but have underperformed the broader Australian market since the first cut to official rates in June.

The combination of subdued loan growth prospects, downward pressure on margins from lower interest rates and a reinvestment burden is likely to mean the banks remain in a downgrade cycle, in the broker's view.

Underweight. Target is reduced to $25.80 from $27.30. Industry view: In-Line.

Target price is $25.80 Current Price is $27.75 Difference: minus $1.95 (current price is over target).
If ANZ meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.93, suggesting upside of 0.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

UBS rates AZJ as Neutral (3) -

Following a material decline in bond yields UBS is reducing its cost of equity assumptions, which drives an upgrade to valuation. Moreover, the removal of uncertainty around UT5 has resulted in positive earnings revisions.

The broker's FY20 forecast for EBIT of $905m represents a clean year of earnings from which the business is expected to grow 1-2% over the next five years. Neutral maintained. Target is raised to $5.60 from $5.10.

Target price is $5.60 Current Price is $5.82 Difference: minus $0.22 (current price is over target).
If AZJ meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.24, suggesting downside of -9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgan Stanley rates CBA as Underweight (5) -

Morgan Stanley assesses major bank PE multiples have re-rated since the federal election but have underperformed the broader Australian market since the first cut to official rates in June.

The combination of subdued loan growth prospects, downward pressure on margins from lower interest rates and a reinvestment burden is likely to mean the banks remain in a downgrade cycle, in the broker's view.

Underweight maintained. Target is reduced to $66.50 from $67.50. Industry view: In-Line.

Target price is $66.50 Current Price is $81.81 Difference: minus $15.31 (current price is over target).
If CBA meets the Morgan Stanley target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $73.11, suggesting downside of -10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.6

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

Ord Minnett rates CGF as Lighten (4) -

Ord Minnett expects pre-tax profit in FY19 of $546m when the company reports on August 13. This is at the lower end of guidance.

The strong capital position is considered a key positive, as it protects against market falls and remains a possible lever for growth.

However, the low return on equity and weak organic growth prospects lead the broker to maintain a Lighten rating. Target is trimmed to $6.50 from $6.52.

Target price is $6.50 Current Price is $6.94 Difference: minus $0.44 (current price is over target).
If CGF meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.31, suggesting upside of 5.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates DOW as Outperform (1) -

Management at the company has now quantified there will be a loss of -31.5m after tax from the Murra Warra Wind farm, but FY19 guidance of $352 in net profits has also been reaffirmed.

Macquarie analysts point at Downer EDI's solid history in delivering wind farms. They estimate this project will be completed in about six months' time. They also note management has stated no other issues have emerged at the Murra Warra Wind farm.

No changes made to forecasts. Price target $8.53. The company is scheduled to release FY19 results on 22 August.

Target price is $8.53 Current Price is $7.54 Difference: $0.99
If DOW meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $7.73, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

UBS rates DOW as Buy (1) -

The company has assessed the additional costs to complete the Murra Warra wind farm contract to be $45m. The additional obligations have arisen through the insolvency of its turbine partner.

Importantly, Downer EDI has secured possession and title to all equipment needed to complete the project.

UBS likes the solid underlying earnings growth outlook and maintains a Buy rating. Target is reduced to $8.15 from $8.22.

Target price is $8.15 Current Price is $7.54 Difference: $0.61
If DOW meets the UBS target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $7.73, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Ord Minnett rates LNK as Accumulate (2) -

Ord Minnett envisages significant short-term pressures facing the funds administration business and Link Asset Services in the UK, suspecting consensus estimates are too high. The company will report its results on August 29. Ord Minnett forecasts a net profit of $201m.

The stock is trading on PE multiples that appear cheap in the broker's view and there is some growth potential through acquisitions and re-pricing. Hence, an Accumulate rating is maintained. Target is reduced to $7.00 from $7.16.

Target price is $7.00 Current Price is $4.89 Difference: $2.11
If LNK meets the Ord Minnett target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $6.70, suggesting upside of 37.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Macquarie rates MIN as No Rating (-1) -

Mineral Resources and partner Albemarle have revised their joint venture agreement for Wodgina but analysts at Macquarie suggest, overall, the impact on valuation from the previous announcement remains minimal.

FY20 and FY21 forecasts fall -3% and -8%, respectively. Capex forecasts for the company fall by nearly -$500m over the FY20-FY22 period. Macquarie is currently restricted on issuing research on the company.

Current Price is $15.65. Target price not assessed.

Current consensus price target is $20.00, suggesting upside of 27.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Morgan Stanley rates MIN as Overweight (1) -

Morgan Stanley assesses the new deal at Wodgina is very similar to the previous valuation. The US$1.2bn valuation for the 50,000tpa hydroxide facility appears high but the broker notes Mineral Resources is to receive cash if costs come in lower.

Overweight rating and $19.50 target. Industry view: Attractive.

Target price is $19.50 Current Price is $15.65 Difference: $3.85
If MIN meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $20.00, suggesting upside of 27.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.8

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

Morgan Stanley rates NAB as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley assesses major bank PE multiples have re-rated since the federal election but have underperformed the broader Australian market since the first cut to official rates in June.

The combination of subdued loan growth prospects, downward pressure on margins from lower interest rates and a reinvestment burden is likely to mean the banks remain in a downgrade cycle, in the broker's view.

National Australia Bank's rating is downgraded to Equal-weight from Overweight, as it has outperformed the other major banks since the federal election. The target is lowered to $26.40 from $27.30. Industry view: In-line.

Target price is $26.40 Current Price is $28.41 Difference: minus $2.01 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.99, suggesting downside of -5.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Credit Suisse rates NST as Underperform (5) -

Credit Suisse is disappointed with the company's reserves and FY20 guidance. FY20 guidance is for a flat 800-900,000 ounces at all-in sustainable costs of $1200-1300/oz.

The broker assesses Northern Star needs to mine and process more tonnage at lower grades to sustain a flat production outlook, which also means more capital development and more exploration expenditure.

Underperform rating maintained. Target is raised to $6.30 from $6.10.

Target price is $6.30 Current Price is $12.59 Difference: minus $6.29 (current price is over target).
If NST meets the Credit Suisse target it will return approximately minus 50% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.85, suggesting downside of -29.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.7

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

Macquarie rates NST as Underperform (5) -

Northern Star's FY20 guidance proved weaker than anticipated. In response, FY20 EPS estimate drops by -28%. The analysts note the company is organising a strategy update for August 3rd.

Mine life extensions at Kalgoorlie and Jundee, in light of the updated reserves, goes some way to supporting the DCF valuation, suggest the analysts. They add this is despite the EPS cuts. The combination has resulted in a -9% reduction in target price to $10.00. Underperform rating retained.

Target price is $10.00 Current Price is $12.59 Difference: minus $2.59 (current price is over target).
If NST meets the Macquarie target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.85, suggesting downside of -29.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.7

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

UBS rates NST as Sell (5) -

Resources grew by 31% and reserves by 35% over FY19. Pogo now has more than six years of life based on reserves and more potential, UBS believes, to keep growing over time.

The grade lifted at Kalgoorlie but fell at Jundee. Guidance for FY20 is for 800-900,000 ounces, below UBS estimates, although upside risk is envisaged. Sell rating and $10 target maintained.

Target price is $10.00 Current Price is $12.59 Difference: minus $2.59 (current price is over target).
If NST meets the UBS target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.85, suggesting downside of -29.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.7

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

Citi rates NUF as Buy (1) -

Citi considers the placement to Sumitomo a strategically positive move which also relieves balance-sheet concerns.

While market conditions are challenging and the company has trimmed FY19 operating earnings (EBITDA) guidance, the placement removes a significant overhang.

Citi reiterates a Buy rating and reduces the target to $6.00 from $6.20.

Key drivers of the lower guidance, with operating earnings of around $420m expected, include unprecedented flooding in North America, continued dry conditions in Australia and worsening supply conditions for some products sourced from China.

Target price is $6.00 Current Price is $4.95 Difference: $1.05
If NUF meets the Citi target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.20, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Credit Suisse rates NUF as Outperform (1) -

Credit Suisse suspects, while a capital raising and downgrade to guidance was widely expected, the support from Sumitomo was likely to have been underestimated. The company has downgraded earnings estimates for North America because of weather impacts.

Removing balance sheet risk is a clear positive, the broker suggests, as $97.5m of preference shares will be issued to Sumitomo. Credit Suisse reduces forecasts, primarily for North America and Europe. Outperform rating maintained. Target is reduced to $8.24 from $8.90.

Target price is $8.24 Current Price is $4.95 Difference: $3.29
If NUF meets the Credit Suisse target it will return approximately 66% (excluding dividends, fees and charges).

Current consensus price target is $6.20, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Macquarie rates NUF as Outperform (1) -

Yet another profit warning, though this time there is also the news that shareholder Sumitomo Chemical takes up $97.5m in preference securities. Macquarie has reduced its price target to $5.77 (from $6.05) while retaining the Outperform rating.

Macquarie points out Sumitomo currently owns 16% of Nufarm and if it converted the pref shares the company's stake would increase to 19.9%. The analysts see financial support by Sumitomo as "an important signal" for investors.

Nufarm has effectively bought time for an improved earnings outlook in FY20, suggests Macquarie.

Target price is $5.77 Current Price is $4.95 Difference: $0.82
If NUF meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $6.20, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Morgan Stanley rates NUF as Overweight (1) -

Morgan Stanley was disappointed with the downgrade to operating earnings (EBITDA) guidance for FY19, to around $420m from $440-470m. Offsetting this is the preference share transaction with Sumitomo, which has removed the risk of a large equity raising.

The broker believes investors can now focus on the inherent longer-term value in the stock and reiterates an Overweight rating. Target is reduced to $6.80 from $7.10. Industry view is Cautious.

Target price is $6.80 Current Price is $4.95 Difference: $1.85
If NUF meets the Morgan Stanley target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $6.20, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Ord Minnett rates NUF as Hold (3) -

Nufarm has placed $97.5m in preference securities to its largest shareholder, Sumitomo. The company has also eased back guidance for operating earnings (EBITDA) to around $420m amid inclement weather in North America.

Ord Minnett is more concerned about the earnings profile in FY20, as Australian drought conditions and European supply chain issues linger on. Further opportunities in the form of Omega-3 canola remain a key positive.

Ord Minnett reduces FY19 forecasts by -6.5%. Hold rating maintained. Target is raised to $4.90 from $4.50.

Target price is $4.90 Current Price is $4.95 Difference: minus $0.05 (current price is over target).
If NUF meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.20, suggesting upside of 25.3% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Credit Suisse rates ORG as Outperform (1) -

Credit Suisse reduces FY19 estimates for energy market operating earnings (EBITDA) by -$25m to $1.57bn because of lower C&I gas volumes, partially offset by better retail electricity.

Revenue in the fourth quarter was slightly ahead of the broker's forecasts because of higher realised LNG and domestic gas prices.

Conoco has warned of lower APLNG distributions in the next six months which prompts Credit Suisse to reduce estimates for operating earnings from APLNG by -2.8% for FY20. The broker maintains an Outperform rating and $8.50 target.

Target price is $8.50 Current Price is $7.62 Difference: $0.88
If ORG meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.38, suggesting upside of 9.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Citi rates RIO as Buy (1) -

First half underlying operating earnings were slightly below Citi's estimates. Iron ore and aluminium were in line while copper, diamonds, energy and minerals were weaker than the broker expected.

Rio Tinto expects demand for iron ore in China to remain robust and domestic production to remain constrained. A recovery in the automotive sector is expected to lift aluminium demand.

Citi incorporates higher iron ore prices for the September quarter and moderates Pilbara iron ore volumes for 2020/21. Buy rating and $110 target maintained.

Target price is $110.00 Current Price is $94.91 Difference: $15.09
If RIO meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Credit Suisse rates RIO as Underperform (5) -

Underlying net profit and operating earnings in the first half were both in line with Credit Suisse estimates.

Operationally, the broker notes it has been a challenging six months for Rio Tinto and there remains work to be done to remove uncertainties in the Pilbara and Oyu Tolgoi.

Underperform rating and $92 target maintained.

Target price is $92.00 Current Price is $94.91 Difference: minus $2.91 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Macquarie rates RIO as Outperform (1) -

Macquarie finds the interim report by Rio Tinto revealed a weaker than expected financial performance, predominantly because of weaker revenues from iron ore. There was, however, also the announcement of a special dividend.

Macquarie analysts also point out, with exception of iron ore, all divisions have seen ebitda (operational profits) and earnings retreating over sequential halves. But the outlook is all about buoyant iron ore prices.

Forecasts would received further upgrades if current spot prices remain in place. Outperform. Target $114 (was $117).

Target price is $114.00 Current Price is $94.91 Difference: $19.09
If RIO meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

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

Cash returns to shareholders in the first half exceeded Morgan Stanley's expectations and imply a total pay-out ratio of 70% and a base dividend pay-out of 50%. Operating earnings were slightly ahead of estimates.

Guidance for capital expenditure and operating costs is unchanged, although the broker assesses the earnings upside from the productivity program has been slightly reduced for 2019.

Morgan Stanley maintains an Equal-weight rating and GBP47 target. Industry view is In-Line.

Current Price is $94.91. Target price not assessed.

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Morgans rates RIO as Hold (3) -

Morgans notes, with little in the way of committed capital expenditure and a continuing rally in iron ore, Rio Tinto has pushed the pay-out ratio in the first half to 70% with a special dividend of US40c and ordinary dividend of US$1.51.

First half net profit was below estimates. Even trading near fair value, Morgans believes the investment appeal in the stock remains high and maintains a Hold rating. Target is raised to $91.52 from $89.83.

Target price is $91.52 Current Price is $94.91 Difference: minus $3.39 (current price is over target).
If RIO meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Ord Minnett rates RIO as Hold (3) -

First half operating earnings were broadly in line with Ord Minnett's forecasts. The broker does not expect the results to influence investor views or lead to material changes to the outlook.

Iron ore has remained resilient, at just below US$120/t and, given the strength in steel production in China, the broker suspects prices will remain buoyant for some time. Hold rating and $106 target maintained.

Target price is $106.00 Current Price is $94.91 Difference: $11.09
If RIO meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

UBS rates RIO as Neutral (3) -

First half underlying earnings were below UBS estimates because of higher costs in iron ore and provisions for onerous contracts. The iron ore division delivered a 72% operating earnings margin and 65% return on capital expenditure and the rally in the iron ore price was the main driver of the strong result.

Total dividends reflected around 90% of free cash flow over the period, which the broker assesses favourably. Neutral rating maintained. Target is reduced to $97 from $101.

Target price is $97.00 Current Price is $94.91 Difference: $2.09
If RIO meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $101.75, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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

Macquarie rates RSG as Outperform (1) -

Resolute Mining released a strong Q2 report, according to Macquarie. The outlook is now incorporating the US$274 Toro acquisition. Macquarie also points at the ongoing momentum supporting the underground extension at Syama.

Target price has been lifted to $2.30 from $1.80. Outperform rating retained.

Target price is $2.30 Current Price is $1.87 Difference: $0.43
If RSG meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Morgans rates SLC as Add (1) -

The company has revised FY20 guidance and now expects underlying EBITDA, of $14-16m. This excludes potential infrastructure transactions, which Morgans notes are still possible and would provide upside if they occur.

Despite a continued decline in the cloud-managed services, accelerating growth in fibre connectivity and cost savings signal to the broker strong growth is still likely in FY20.

FY20 forecasts are pulled back to the lower end of guidance. Morgans maintains an Add rating and reduces the target to $1.60 from $2.05.

Target price is $1.60 Current Price is $1.01 Difference: $0.59
If SLC meets the Morgans target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

UBS rates SYD as Upgrade to Neutral from Sell (3) -

Following a material decline in bond yields UBS is reducing its cost of equity assumptions, which drives an upgrade to valuation. The stock's long-dated concession, and longer-term cash flow, means it has strong leverage to lower bond yields.

UBS upgrades to Neutral from Sell. The broker expects weakening bond yields to be the primary driver of share price performance. Target is raised to $8.50 from $7.00.

Target price is $8.50 Current Price is $8.65 Difference: minus $0.15 (current price is over target).
If SYD meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.74, suggesting downside of -10.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

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

Following a decline in bond yields, UBS is reducing its cost of equity assumptions, which drives an upgrade in valuation. Despite this, the broker finds insufficient upside to warrant a Buy rating and downgrades to Neutral.

With such low bond rates and a low cost of equity the broker muses about whether Transurban may become more aggressive in its growth plans. Target is raised to $15.10 from $13.75.

Target price is $15.10 Current Price is $16.03 Difference: minus $0.93 (current price is over target).
If TCL meets the UBS target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $14.20, suggesting downside of -11.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Citi rates TWE as Sell (5) -

Citi has analysed industry crush data and pricing with the release of the Australian 2019 vintage report. Treasury Wines had indicated in May that its luxury intake was up 10%.

Citi suspects this increase was largely due to re-grading or increased grower contracts, as there has been a fall in the Australian crush, including premium red growing areas.

Citi maintains a Sell rating and $14.90. The broker is cautious about FY20 as revenue growth and margin gains are likely to ease in the face of competition and rising grape costs.

Target price is $14.90 Current Price is $17.41 Difference: minus $2.51 (current price is over target).
If TWE 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 $18.06, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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 Upgrade to Equal-weight from Underweight (3) -

Morgan Stanley assesses major bank PE multiples have re-rated since the federal election but have underperformed the broader Australian market since the first cut to official rates in June.

The combination of subdued loan growth prospects, downward pressure on margins from lower interest rates and a reinvestment burden is likely to mean the banks remain in a downgrade cycle, in the broker's view.

Westpac has become the broker's preferred major bank and the rating is upgraded to Equal-weight from Underweight because of relative valuation support and more scope to mitigate the impact of lower rates. Target is raised to $26.60 from $26.00. Industry view: In Line.

Target price is $26.60 Current Price is $28.75 Difference: minus $2.15 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.53, suggesting downside of -0.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.1

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

Citi rates WTC as Buy (1) -

Despite a Buy rating Citi is concerned about short-term weakness. The upcoming results may end up disappointing, given the stock price is up 91% in the year to date and 15% in July alone.

Citi expects operating earnings (EBITDA) in FY19 of $106m, noting guidance is for $100-105m. The target is steady at $32.77.

Target price is $32.77 Current Price is $31.95 Difference: $0.82
If WTC meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $22.79, suggesting downside of -28.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

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

Macquarie has decided to upgrade Xero to Outperform from Neutral while bumping up its price target by 21% to $76.50. The analysts believe Xero is well positioned to establish itself as a global platform of choice for SMEs, underpinned by its core subscription SaaS product.

The underlying thesis is that strong unit economics will drive operating leverage for the company. The analysts argue Xero is still only at the precipice of its long term growth story. They see the US market as equally ripe for cloud disruption.

Target price is $76.50 Current Price is $65.67 Difference: $10.83
If XRO meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $58.25, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.2

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

UBS rates XRO as Sell (5) -

UBS has analysed the high correlation between Google search trends and the company's net subscriber growth.

In the UK the broker believes strong momentum will continue over the first half, while in Australia the Google trends are only 3% ahead of the prior corresponding half, which still could suggest slightly better subscriber growth.

The broker maintains a Sell rating, believing the current share price factors in the success. Target is raised to $52.50 from $50.00.

Target price is $52.50 Current Price is $65.67 Difference: minus $13.17 (current price is over target).
If XRO meets the UBS target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $58.25, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: -0.2

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