Australian Broker Call

Citi rates ALU as Neutral (3) -

Altium's trading update surprised to the upside, on Citi's assessment, with the stronger performance into financial year-end suggesting aggressive promotions did have a noticeable impact on license sales and new Designer seats.

Citi remains positive with regards to Altium's platform strategy overall, but shorter-term worries whether demand has now been pulled forward (suggesting potential disappointment for H1 FY21).

Cashflow proved weaker than expected, which the analysts speculate could be the result of Altium offering installment payments as part of its discounting.

Target price remains $33.50 and the rating Neutral.

Target price is $35.50 Current Price is $32.29 Difference: $3.21
If ALU meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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

Morgan Stanley rates ALU as Overweight (1) -

Altium’s FY20 revenue at US$189m is above Morgan Stanley’s estimated US$175m but below the company’s pre-covid-19 goal of US$200m. The company also saw subscription growth of 17% to more than 50,000, again above the 46,000 forecasted by the broker.

The company did not disclose any details regarding its operating income and the broker feels consensus operating margin at about 37% may be too optimistic.

The company is net cash and has a strong balance sheet and while headwinds remain, Altium continues to win market share.

The company will report results on August 17.

Morgan Stanley retains its Overweight rating with a target price of $40. Industry view: Attractive.

Target price is $40.00 Current Price is $32.29 Difference: $7.71
If ALU meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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 ALU as Neutral (3) -

FY20 revenue was US$189m, consistent with the company's update on June 22.

More detail will be provided about the long-term impact of the pandemic on the company's strategy and also recurring revenue and pricing at the results on August 17.

UBS believes this signals a greater focus on term-based and usage-based licences going forward.

The broker continues to assess the risk/return is balanced and retains a Neutral rating. Target is $37.

Target price is $37.00 Current Price is $32.29 Difference: $4.71
If ALU meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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

Macquarie rates ALX as Neutral (3) -

The Dulles Greenway is regulated by the Virginia State Corporation Commission (SCC).

The SCC staff have concluded that the road is not over-earning. However, they are inconclusive that the price increase is reasonable when considering the user benefit obtained. They differ from Atlas Arteria in analysing that off-peak personal use and trucks don't capture benefits either now or over the next five years.

The staff are also pushing for the decision period to be reduced.

Macquarie believes that reducing the decision period to one to three years from five years improves earnings certainty, as another review will now be due prior to the asset paying a dividend.

The Neutral rating is maintained. The price target decreased to $6.62 from $6.93.

Target price is $6.62 Current Price is $6.48 Difference: $0.14
If ALX meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $6.65, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgans rates AZJ as Add (1) -

As a result of volume weakness in the June quarter Morgans expects FY20 earnings (EBIT) at the lower end of the $880-930m guidance range.

The broker continues to find the forecast dividend yield of 5.9% appealing, as is the relative revenue resilience and the potential for further buybacks.

Add maintained. Target is reduced to $5.27 from $5.46. Aurizon will report its FY20 result on August 10.

Target price is $5.27 Current Price is $4.63 Difference: $0.64
If AZJ meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $5.46, suggesting upside of 15.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Credit Suisse rates CRN as Outperform (1) -

Curragh was a little softer, in terms of June quarter production, compared with Credit Suisse estimates but a better second half is expected.

The broker finds it hard to imagine a positive catalyst amid capacity shutdowns in steel and soft manufacturing demand.

The balance sheet has some room until early next year and net debt has improved slightly.

However, the longer the metallurgical coal market stays subdued the more pressing the requirement for more funding.

No dividends are assumed in 2020 or 2021. Outperform rating and $1.90 target maintained.

Target price is $1.90 Current Price is $0.91 Difference: $0.99
If CRN meets the Credit Suisse target it will return approximately 109% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 90.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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

Morgans rates CRN as Add (1) -

Morgans trims forecasts to allow for lower volumes and pricing amid a persistently weak steel outlook outside of China.

The broker estimates that around 25% of Australian metallurgical coal supply is cash negative at current prices.

While small production cuts have been made, supply often stubbornly holds up, Morgans points out, and more severe cuts are required.

Add rating retained. Target is reduced to $1.70 from $2.00.

Target price is $1.70 Current Price is $0.91 Difference: $0.79
If CRN meets the Morgans target it will return approximately 87% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 90.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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

UBS rates CRN as Buy (1) -

June quarter production was ahead of expectations. Sales volumes were slightly below UBS forecasts because of weaker sales from the US, offset by higher sales from Curragh.

Market conditions remain weak and UBS increases the forecast underlying loss for 2020 to -US$68m.

Buy rating retained. Target is reduced to $1.70 from $1.80.

Target price is $1.70 Current Price is $0.91 Difference: $0.79
If CRN meets the UBS target it will return approximately 87% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 90.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

This company reports in USD. 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 EVT as Neutral (3) -

Preliminary data are signalling occupancy rates are improving for hotels in Melbourne, but Citi analysts highlight average revenue per available room (revPAR) is well below pre-covid-19 levels.

The analysts believe the RevPAR is destined to decline further now that stage 3 lockdown has been put in place. They point out Melbourne accounts for 13% of all rooms at the group's hotel operations.

The offset is that hotels in NSW and Thredbo should benefit from increased domestic tourism given restrictions on international travel.

Neutral rating retained, with explicit mention of downside risks for the cinema business. Target price unchanged at $9.75.

Target price is $9.75 Current Price is $8.27 Difference: $1.48
If EVT meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgan Stanley rates IEL as Overweight (1) -

Morgan Stanley expects student demand to be resilient and international students will be one of the first groups to resume international travel, ahead of holiday-makers and corporate travellers.

The broker reports more students are willing to commence their studies online and transition later to in-person classes, with more willing to quarantine rather than delay commencing their course.

The broker admits IDP Education is trading at a premium and thus at higher risk, while also pointing out strong underlying demand plus all participants – governments, universities and students – are incentivised to open the industry across major destination nations.

Morgan Stanley maintains its Overweight rating with a target price of $17. Industry view: In-line.

Target price is $17.00 Current Price is $14.05 Difference: $2.95
If IEL meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $16.46, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates LNK as Outperform (1) -

APRA have released the weekly covid-19 Superannuation Early Release Scheme (ERS) data for the period ending July 5.

Driven by the second wave, the ERS applications surged to around $4.3bn, which is an increase of 129% against the weekly average.

Macquarie assumes 5.4% of ERS payments result in account closures and forecasts an annualised revenue headwind of around -$3.7m for Link Administration. However, upon reopening, many of these closed accounts may also reopen.

Around 16.7% of Link's members have requested ERS payments versus the market average of around 11.8%.

Despite such uncertainties, the broker still views the long-term valuation as attractive.

Outperform retained. Target price increased to $4.60 from $4.50.

Target price is $4.60 Current Price is $4.03 Difference: $0.57
If LNK meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.99, suggesting upside of 20.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.8

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

Macquarie rates NGI as Outperform (1) -

Funds under management as of June 2020 were US$11.77bn. 

Macquarie forecasts around -$US2.7bn of net outflows across FY21. This mainly pertains to the underperforming non-equity FUM in the multi-strategy business.

Despite forecasting material outflows, the broker had already factored this into forecasts and states that the outperform rating is supported by valuation.

Outperform rating is maintained. Price target is $1.58.

Target price is $1.58 Current Price is $1.27 Difference: $0.31
If NGI meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Morgans rates OSH as Hold (3) -

Oil Search will write down -US$250-300m of the carrying value of various exploration assets at its interim result.

Morgans believes this is a signal the company intends to shelve several projects that fail to excite in terms of earnings contributions and/or growth.

The impairment includes a small portion against Alaskan leases, which the broker considers is typical lease management practice for North American exploration.

Morgans retains a Hold rating and reduces the target to $2.75 from $2.82.

Target price is $2.75 Current Price is $2.99 Difference: minus $0.24 (current price is over target).
If OSH meets the Morgans target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.39, suggesting upside of 9.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.4

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

Citi rates PDL as Neutral (3) -

The June quarter was affected by FX and further outflows from JO Hambro funds.

However, Citi finds the outlook is more promising for the current quarter, with mandate gains and existing clients topping up across Australian and global equity.

However, with a rebound in performance fees some time off, Citi maintains a Neutral rating. Target is raised to $6.10 from $5.80.

Target price is $6.10 Current Price is $5.87 Difference: $0.23
If PDL meets the Citi target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates PDL as Neutral (3) -

Funds under administration beat Credit Suisse estimates because of better market movements in the June quarter.

Outflows were worse than expected, with weakness most marked in Australian institutional, JO Hambro retail and JO Hambro institutional.

Credit Suisse upgrades estimates by 2-4% for higher performance fees and higher FUA. Neutral rating is reiterated. Target is raised to $6.30 from $6.20.

Target price is $6.30 Current Price is $5.87 Difference: $0.43
If PDL meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgan Stanley rates PDL as Overweight (1) -

Pendal Group saw outflows worth -$2.5bn in the June quarter, more than double the amount expected by Morgan Stanley (-$1.2bn) due to retail outflows from JO Hambro Capital Management (Europe/UK channel).

On the bright side, the broker notes a strong start to September, noting the group expects new mandate wins of $1.5bn to be funded in the September quarter.

A higher than expected June funds under management (FUM) total has led to an upside of about 4-6% to the broker’s FY21 earnings.

Morgan Stanley reaffirms its Overweight rating with a target price of $7. Industry view: In-line.

Target price is $7.00 Current Price is $5.87 Difference: $1.13
If PDL meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $6.54, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates PMV as Neutral (3) -

Credit Suisse upgrades second half sales forecasts to better reflect strength in the online performance which has countered the impact of store closures through April and May.

However, the reintroduction of restrictions in Melbourne means the recovery for discretionary retail is likely to be more unpredictable.

Upgrades to earnings estimates are largely because of updated assumptions, which previously factored in complete closure of retail operations for two months and more restrictive lockdowns in June and July.

Neutral rating maintained. Target rises to $17.56 from $10.17.

Target price is $17.56 Current Price is $16.13 Difference: $1.43
If PMV meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $16.70, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Macquarie rates PMV as Outperform (1) -

Macquarie has performed a valuation review of Premier Investments, taking into account the Melbourne lockdown and recent website traffic.

The broker estimates that 19% of Premier's Australian store network is temporarily closed, which represents 13% of the global store network. While weak foot traffic is already assumed, there is some downside risk to Macquarie's 2H20 and 1H21 estimates should online sales or other states not take up the slack.

The broker notes that website traffic for the Premier brands has remained stable.

In terms of valuation, Macquarie believes the company is trading at a -18% discount relative to its pre-pandemic average and even larger discounts to its listed peers.

Outperform rating maintained. Target price is $20.11.

Target price is $20.11 Current Price is $16.13 Difference: $3.98
If PMV meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $16.70, suggesting upside of 3.8% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgan Stanley rates SCG as Overweight (1) -

Morgan Stanley believes shopping malls are unlikely to see the same earnings as seen pre-covid-19. There will be a decline in rents to the extent of -15-18% versus pre-pandemic levels driven by a decline in occupancy and a shift to online channels, comments the broker.

The broker also expects income to decline from the impact of social distancing on cinemas, gyms and food and beverages.

Scentre Group is considered better placed to recover from the pandemic than other retail-dominant REITs as its malls are located in wealthier areas with stronger incomes and higher population densities in surrounding areas.

Morgan Stanley maintains its Overweight rating on Scentre Group with the target price decreasing to $2.66 from $2.90. Industry view: In-line.

Target price is $2.66 Current Price is $2.15 Difference: $0.51
If SCG meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.30, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgans rates SXY as Add (1) -

Senex Energy has announced a significant increase in reserves at its Surat Basin operations. 2P reserves at Atlas have risen 62% and at Roma North 10%.

In addition to revisiting production assumptions, Morgans cuts back further sustaining capital expenditure assumptions because of continuing solid performance from wells at both these locations.

Add rating retained. Target is raised to 45.7c from 41.4c.

Target price is $0.46 Current Price is $0.25 Difference: $0.207
If SXY meets the Morgans target it will return approximately 83% (excluding dividends, fees and charges).

Current consensus price target is $0.37, suggesting upside of 42.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.9

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

Macquarie rates TCL as Outperform (1) -

Macquarie assesses the impact of Melbourne's six week lockdown upon the pace of recovery. The broker believes the risk is that the current setback defers the return to work and the level of aviation activity.

The broker concludes that there is minimal impact upon long-term value and compelling growth opportunities remain. Risk is somewhat mitigated by the opening of some city-centric roads.

However, the risk becomes extreme should all Australian states be impacted by shutdowns. Macquarie awaits the full year results in early August as a potential catalyst.

Outperform maintained. Target is reduced to $15.19 from $15.27.

Target price is $15.19 Current Price is $13.44 Difference: $1.75
If TCL meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $13.80, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Morgan Stanley rates TPG as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley notes the newly merged TPG Telecom has the potential and capital to play disrupter and believes the company can compete against the larger telcos like Telstra and Optus.

The broker points towards a stronger product suite, higher growth options and a stronger balance sheet but also highlights risks like the National Broadband Network (NBN) pricing that is impacting TPG Telecom’s fixed-line profit.

Investors willing to wait 2-3 years for the synergies to play out fully can expect target price upside, comments the broker.

Morgan Stanley upgrades its rating to Overweight from Equal-weight with the target price increasing to $10 from $6.85. Industry view: In-line.

Target price is $10.00 Current Price is $8.03 Difference: $1.97
If TPG meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $8.72, suggesting upside of 6.4% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgan Stanley rates VCX as Underweight (5) -

Morgan Stanley believes shopping malls are unlikely to see earnings rise to the levels seen pre-covid-19. There will be a decline in rents to the extent of -15-18% driven by a decline in occupancy and shift to online channels.

The broker also expects social distancing to impact income from cinemas, gyms and food and beverages.

Vicinity Centres is more at risk owing to fewer dominant assets with only three malls out of 59 having a turnover of more than $500m/year (as opposed to Scentre Group's 25 out of 42 malls). 

The REIT is also more exposed to Victoria and has an older/less redeveloped portfolio.

Morgan Stanley retains its Underweight rating on Vicinity Centres with the target price decreasing to $1.28 from $1.65. Industry view: In-line.

Target price is $1.28 Current Price is $1.34 Difference: minus $0.06 (current price is over target).
If VCX meets the Morgan Stanley target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.61, suggesting upside of 17.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Citi rates WHC as Buy (1) -

Strong production and a build up in inventory characterised the June quarter.

Yet Whitehaven Coal expects strong sales in the first quarter of FY21 as inventory normalises.

Citi incorporates lower equity sales during the June quarter into forecasts and also lowers the proportion of metallurgical coal sales.

Buy rating and $1.75 target maintained.

Target price is $1.75 Current Price is $1.52 Difference: $0.23
If WHC meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $2.19, suggesting upside of 47.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Credit Suisse rates WHC as Outperform (1) -

Whitehaven Coal finished FY20 strongly and reached saleable production guidance.

However, the standard June quarter build up in inventory will lead to softer comparable earnings, Credit Suisse suspects.

The broker does not have the company entering positive earnings territory until FY23 and assumes no dividends until then as well.

The LNG glut continues to influence thermal coal prices while soft electricity demand has added to the pressure.

Outperform rating and $2.25 target maintained.

Target price is $2.25 Current Price is $1.52 Difference: $0.73
If WHC meets the Credit Suisse target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $2.19, suggesting upside of 47.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Macquarie rates WHC as Underperform (5) -

Whitehaven Coal has announced a record output in 4QFY20, with production exceeding forecasts. Output was 34% ahead of Macquarie's forecast.

The broker states the result was driven by record production at Narrabri and strong production at Maules Creek. However, both of these locations also revealed material increases in coal stocks, that resulted in a company-wide inventory build up and reduction in sales.

The company also noted that subdued coal markets have led to a cautious approach in deciding upon expansion projects. FY20 financial results are due on August 26.

Macquarie warns that significant downside risk remains at current coal prices.

Underperform rating is maintained. The target price is increased to $1.40 from $1.30.

Target price is $1.40 Current Price is $1.52 Difference: minus $0.12 (current price is over target).
If WHC meets the Macquarie target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.19, suggesting upside of 47.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgan Stanley rates WHC as Overweight (1) -

Whitehaven Coal’s June quarter production has beaten Morgan Stanley’s estimates by 27%, while the entire FY20 production at 20.7mt is in-line with guidance (20-22mt).

This is a strong result, highlights the broker, considering only 12.4mt was produced until the third quarter.

Managed coal sales were in-line with broker estimates and the company reported a 7% premium for these sales. Both Narrabri and Maules Creek performed well during the quarter (and the year), beating the broker's estimates.

Morgan Stanley rates the stock as Overweight with a target price of $2.25. Industry view: Attractive.

Target price is $2.25 Current Price is $1.52 Difference: $0.73
If WHC meets the Morgan Stanley target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $2.19, suggesting upside of 47.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgans rates WHC as Add (1) -

Fourth quarter production confirmed the worst of the disrupted FY20 is behind the company, Morgans asserts.

Forecasts are cut to allow for revised production and lower coal prices in FY21.

The risk remains skewed to the downside in the near term as well, in the broker's view.

The potential upside is seen as compelling and the broker assesses traders may yet find a weaker entry point as the coal market re-balances.

Add rating retained. Target is reduced to $2.40 from $2.90.

Target price is $2.40 Current Price is $1.52 Difference: $0.88
If WHC meets the Morgans target it will return approximately 58% (excluding dividends, fees and charges).

Current consensus price target is $2.19, suggesting upside of 47.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

UBS rates WHC as Buy (1) -

UBS notes June quarterly production was a record with ROM at 8.2mt and sales of 5.7mt. Realised pricing was down -13% because of soft market conditions.

The expansion projects and a recovery in the market remain key for Whitehaven Coal. The company has experienced the deferral of metallurgical coal shipments to the first quarter of FY21.

The company is also waiting for market conditions to improve to make investment decisions on stage 3 Narrabri, Vickery and Winchester South

 Buy rating maintained. Target is reduced to $2.60 from $2.70.

Target price is $2.60 Current Price is $1.52 Difference: $1.08
If WHC meets the UBS target it will return approximately 71% (excluding dividends, fees and charges).

Current consensus price target is $2.19, suggesting upside of 47.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Citi rates WPL as Buy (1) -

Woodside has impaired around -US$4bn in assets and booked an onerous contract provision of -US$450m for Corpus Christi.

The latter disclosure suggests annual nominal losses to Citi of -US$25m per annum, around half the level previously expected.

Buy/High Risk rating retained. Target is reduced to $26.08 from $27.97.

Target price is $26.08 Current Price is $21.42 Difference: $4.66
If WPL meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $25.18, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

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

Woodside Petroleum has written down its Pluto asset to US$8.8bn, taking its valuations close to Morgan Stanley’s valuations. Even so, the broker notes the company is running higher oil price assumptions that could create valuation risk.

The broker highlights the scale of these write-downs shows the challenge in moving forward with LNG projects in a cheaper commodity environment. Before the company decides to move ahead with Scarborough, oil prices need to increase towards US$50/bbl, estimates the broker.

The North West Shelf may see consolidation in the future and with Chevron looking to exit the asset, the broker expects more parties could follow.

The -US$447m Corpus Christi provision also highlights the challenge of a poor deal in a changed LNG environment, according to the analysts.

Morgan Stanley maintains its Equal-weight rating with a target price of $21.10. Industry view: Cautious.

Target price is $21.10 Current Price is $21.42 Difference: minus $0.32 (current price is over target).
If WPL meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.18, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Ord Minnett rates WPL as Buy (1) -

Ord Minnett assesses sizeable write-downs just announced by Woodside Petroleum largely stem from significantly lower oil price forecasts. And this has significance for the viability of growth projects.

The company has indicated that 80% of the oil & gas property impairments were from assumed reductions in oil and natural gas prices out to 2025.

Additional contributors are increased uncertainty regarding demand because of the pandemic and macro economic factors.

Ord Minnett retains a Buy rating with a $27 target.

Target price is $27.00 Current Price is $21.42 Difference: $5.58
If WPL meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $25.18, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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