Australian Broker Call

Citi rates ABC as Neutral (3) -

Citi has updated its outlook on Adbri to account for the sale of the Moorebank land, driving a $10m increase to the broker's second half property earnings assumptions while net debt assumptions decline to $62m. 

The Neutral rating and target price of $1.55 are retained.

Target price is $1.55 Current Price is $1.79 Difference: minus $0.24 (current price is over target).
If ABC meets the Citi target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.60, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in December.

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

Citi rates BUB as Downgrade to Neutral from Buy (3) -

While remaining supportive of Bubs Australia's journey to become a more diversified and sustainable business, and despite recent momentum improvement in key markets, Citi has downgraded on the stock following a weaker than anticipated first half.

The broker attributed first half performance to slower-than-expected US consumer offtake and a new  model in China. The broker lowers its full year net profit forecast to -$8.3m from $2.7m, factoring in first half performance as well as expected increased costs. 

The rating is downgraded to Neutral from buy and the target price decreases to $0.32 from $0.68.

Target price is $0.32 Current Price is $0.29 Difference: $0.03
If BUB meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).

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

Credit Suisse rates DMP as Neutral (3) -

While Domino's Pizza Enterprises' recently announce capital raising came as a surprise, Credit Suisse expects it has been implemented largely with the desire to maintain a conservative level of leverage and headroom for acquisitions.

The broker has incorporated the $165m equity raising into its outlook, and has assumed a reduced number of store openings of 105 from 160 for the first half. Credit Suisse has cut its earnings per share forecasts -7.0%, -2.6% and -2.8% through to FY25.

The Neutral rating is retained and the target price decreases to $65.62 from $67.01

Target price is $65.62 Current Price is $66.38 Difference: minus $0.76 (current price is over target).
If DMP meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $74.75, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

UBS rates DMP as Buy (1) -

UBS marginally reduces its EPS forecasts following the announced capital raising to fund the option exercise price for the remainder (33.3%) of Domino's Pizza Enterprises' Germany business from Domino's in the UK. The balance of funds will be applied to debt.

The raising comprises an underwritten $150m placement at $65.05/share and a $15m share purchase plan (SPP).

Management reaffirmed FY23 earnings guidance.

The broker's Buy rating is unchanged, while the target falls to $78 fom $80.

Target price is $78.00 Current Price is $66.38 Difference: $11.62
If DMP meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $74.75, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgans rates IEL as Downgrade to Hold from Add (3) -

Following September quarter student visa approvals data, Morgans awaits a pullback in the IDP Education share price to provide another buying opportunity. For the moment the rating is downgraded to Hold from Add on valuation.

Approvals were strong, according to the analyst, across the company's markets of Australia, the UK and Canada.

The analyst notes International study demand from India remains strong for all destinations. A slight tempering of Canadian demand is expected with that country's immigration introducing a new English proficiency test provider to its panel.

The target price falls to $30.75 from $31.10.

Target price is $30.75 Current Price is $29.35 Difference: $1.4
If IEL meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $32.94, suggesting upside of 14.9% (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 IPL as Overweight (1) -

Morgan Stanley observes the Tampa ammonia price has decreased by around -10%. This is the reference price for the majority of the ammonia sold at Incitec Pivot's Waggaman plant in Louisiana.

The analyst explains the decline comes in the lead up to the seasonally stronger period ahead of the Northern Hemisphere planting period. It's noted an inventory build traditionally occurs at the beginning of January.

The Overweight rating and $5.05 target are unchanged. Industry view: In-Line.

Target price is $5.05 Current Price is $4.00 Difference: $1.05
If IPL meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $4.34, suggesting upside of 9.5% (ex-dividends)

The company's fiscal year ends in September.

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 JHX as Buy (1) -

UBS suggests James Hardie Industries' repair & remodel (R&R) focus (65% of US volumes) should provide resilience in the face of near-term macro concerns, which the broker has already factored into its forecasts.

After a review of the North-East/Mid-West regions of the US, the analyst sees significant penetration upside and suggests housing provides support for remodelling. Growth into the North East in particular is anticipated.

The Buy rating and $47.40 target are unchanged.

Target price is $47.40 Current Price is $29.20 Difference: $18.2
If JHX meets the UBS target it will return approximately 62% (excluding dividends, fees and charges).

Current consensus price target is $40.57, suggesting upside of 30.5% (ex-dividends)

The company's fiscal year ends in February.

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 PRN as Initiation of coverage with Buy (1) -

In its initiation on Perenti, Citi has forecast earnings 6.5% above consensus largely on higher margin assumptions. The broker highlights Perenti has secured more than 90% of its revenue target for the coming year and retains a healthy pipeline. 

As part of its de-risking strategy, the company continues to shift towards Tier 1 jurisdictions and is making headway in capturing share in these markets according to the broker. Citi assumes Perenti can reach a 9.9% earnings margin in FY25. 

The broker initiates with a Buy rating and a target price of $1.29.

Target price is $1.29 Current Price is $1.11 Difference: $0.18
If PRN meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates RIO as Downgrade to Neutral from Buy (3) -

While Rio Tinto's full year Pilbara iron ore production guidance of 320-335m tonnes per annum was marginally lower than Citi had expected, the broker notes the company has reinstated its mid-term production target of 345-360m tonnes per annum. 

Citi highlights ramp up at Rio Tinto's Gudai Darri asset, alongside completion of a number of mine developments in coming years, is crucial to the company meeting its target. 

The rating is downgraded to Neutral and the target price of $115.00 is retained. 

Target price is $115.00 Current Price is $109.62 Difference: $5.38
If RIO meets the Citi target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $104.43, suggesting downside of -6.7% (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: 0.4

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

Credit Suisse rates RIO as Outperform (1) -

Rio Tinto's full year production guidance has missed Credit Suisse's expectations, but the broker believes the company may be taking a conservative approach to avoid repeats of historical disappointment. Credit Suisse finds guidance achievable, and feels projects have the potential to outperform. 

The broker was encouraged by Rio Tinto's relationships with traditional communities and the further detail provided on its decarbonisation capital expenditure, as disclosed at its recent investor seminar. 

The Outperform rating and target price of $110.00 are retained.

Target price is $110.00 Current Price is $109.62 Difference: $0.38
If RIO meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $104.43, suggesting downside of -6.7% (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: 0.4

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

Morgan Stanley rates RIO as Overweight (1) -

Morgan Stanley was surprised (positively) by Rio Tinto's focus on technology and innovation at its investor day. The main subjects dejour were technology, decarbonisation, iron ore and aluminium.

Key technology/innovation takeaways were the reinstatement of the Chief Scientist role, reflecting a greater emphasis on innovation into the future. Management also noted hydrogen is likely to play a key role in decarbonisation.

Guidance for 2023 iron ore production was set at 320-335mt compared to the forecasts by the broker and consensus of 335mt and 336mt, respectively.

The Overweight rating and target price of $121.00 are retained. Industry View: Attractive.

Target price is $121.00 Current Price is $109.62 Difference: $11.38
If RIO meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $104.43, suggesting downside of -6.7% (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: 0.4

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

UBS rates RIO as Neutral (3) -

UBS believes the Rio Tinto investor day lent credibility to the company's carbon reduction targets, ongoing cultural change and growth targets.

While 2023 guidance was below the broker's expectations, it's felt management is being conservative. Iron ore shipments for 2023 are expected in the range of 320-335Mt compared to the 320Mt in 2022, with unit costs rising by 7% year-on-year. 

The Neutral rating and $90 target price are unchanged.

Target price is $90.00 Current Price is $109.62 Difference: minus $19.62 (current price is over target).
If RIO meets the UBS target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $104.43, suggesting downside of -6.7% (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: 0.4

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

Morgans rates THL as Initiation of coverage with Add (1) -

Morgans initiates coverage on Tourism Holdings Rentals with an Add rating and $4.00 target. The recent merger of the company with Apollo Tourism and Leisure ((ATL)) results in one of the largest multi-national recreational vehicle (RV) travel companies.

Combined, the companies operate a rental fleet of over 6,000 vehicles throughout A&NZ, North America and Europe. The broker likes the exposure to a recovery in global travel and notes significant revenue is also generated from the sale of new and used vehicles.

The balance sheet is solid, according to the analysts, with a significant proportion of net debt comprising vehicle financing, which is matched against assets.

Target price is $4.00

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

Macquarie rates TPW as Underperform (5) -

Temple & Webster's trading update to November 27 from July 1 showed a -14% fall compared to the previous corresponding period. While not apparent from this number, Macquarie suggests trading appears to be improving on a sequential basis.

The analyst retains an Underperform rating due to the shift back to in-store trading and macroeconomic headwinds. The target rises to $4.05 from $4.00.

Target price is $4.05 Current Price is $5.27 Difference: minus $1.22 (current price is over target).
If TPW meets the Macquarie target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.37, suggesting upside of 7.6% (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

Macquarie rates WDS as Neutral (3) -

Macquarie raises its target price for Woodside Energy by 5% to $39.00 following the company's investor day, on increased earnings forecasts from a changed production mix and increased LNG trading. Neutral.

Management's production outlook was a little better than the analyst had expected though the capex outlook was a tad higher than forecast.

The broker feels the New Energies pivot is making real progress, with the company set to invest -US$500m in Scope 1 & 2 decarbonisation plans for Australian operations. The aim is for a -30% carbon reduction by 2030.

Target price is $39.00 Current Price is $36.65 Difference: $2.35
If WDS meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $37.34, suggesting upside of 4.5% (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: 0.4

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

Morgans rates WDS as Hold (3) -

Morgans key takeaway from Woodside Energy's investor day was a reduced 2023 free cash flow (FCF) expectation by management. However, the analyst feels the 2023 level of around $1bn will likely be the low point for FCF, and the company is approaching peak capex.

The broker struggles to reconcile new guidance with that provided prior to the BHP Group ((BHP)) Petroleum merger, though lowers its target to $34.50 from $36.90 after cutting 2023 production assumptions. Hold.

Target price is $34.50 Current Price is $36.65 Difference: minus $2.15 (current price is over target).
If WDS meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.34, suggesting upside of 4.5% (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: 0.4

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