Australian Broker Call

Citi rates ANZ as Buy (1) -

Banking analysts at Citi have revisited their sector views and forecasts post the firm rally off March lows and with a clearer picture emerging on what the post initial lockdowns outlook might look like.

The analysts believe the prospect of rolling lockdowns will likely result in a persistent portfolio of loan deferments; while creating solvency challenges for small lenders; as well as slowing the dividend recovery, as regulators seek even higher capital buffers.

As a direct result of the general re-assessment, ANZ Bank's rating has remained unchanged at Buy. The target price equally remains intact at $24.75.

Citi's revised order of preference is Westpac on top, followed by ANZ Bank, National Australia Bank, Bank of Queensland, Bendigo & Adelaide Bank, then -lastly- CommBank.

Target price is $24.75 Current Price is $18.47 Difference: $6.28
If ANZ meets the Citi target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $21.16, suggesting upside of 16.0% (ex-dividends)

The company's fiscal year ends in September.

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 AWC as Overweight (1) -

Alumina Ltd’s refining business production and costs were in-line with Morgan Stanley's estimates, both for the second quarter and for the first half, with the impact of a weaker than expected mining business expected to be negligible.

Overall the company maintained its guidance even though the realised prices were about -2% weaker than Morgan Stanley’s estimate.

While the earnings forecast for 2020 is reduced to US$0.02, the estimate for 2021 remains unchanged at US$0.03/share.

Morgan Stanley retains its Overweight rating with a target price of $2. Industry view: Attractive.

Target price is $2.00 Current Price is $1.80 Difference: $0.2
If AWC meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $1.87, suggesting upside of 4.3% (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 BEN as Downgrade to Neutral from Buy (3) -

Banking analysts at Citi have revisited their sector views and forecasts post the firm rally off March lows and with a clearer picture emerging on what the post initial lockdowns outlook might look like.

The analysts believe the prospect of rolling lockdowns will likely result in a persistent portfolio of loan deferments; while creating solvency challenges for small lenders; as well as slowing the dividend recovery, as regulators seek even higher capital buffers.

As a direct result of the general re-assessment, Bendigo & Adelaide Bank's rating has been pulled back to Neutral from Buy. The target price has remained unchanged at $7.25..

Citi's revised order of preference is Westpac on top, followed by ANZ Bank, National Australia Bank, Bank of Queensland, Bendigo & Adelaide Bank, then -lastly- CommBank.

Target price is $7.25 Current Price is $7.15 Difference: $0.1
If BEN meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $6.89, suggesting upside of 1.3% (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 BLD as Equal-weight (3) -

Covid-19 continues to impact current activity levels in the construction industry and Morgan Stanley expects more pain in the future from a slowdown in tenders and deteriorating access to finance.

This deterioration has been more prominent in the residential space, reveals the broker and also notes demand risks in late 2020 and early 2021 with builders unable to refill their work pipelines.

The broker favours infrastructure exposure while looking to avoid domestic residential construction.

While believing there to be a valuation upside in Boral, the broker is concerned about the organisation structure and high levels of gearing and would like to see initiatives to strengthen the balance sheet before adopting a positive stance.

Morgan Stanley reiterates its Equal-weight rating with the target price increasing to $4.10 from $3.60. Industry view is cautious.

Target price is $4.10 Current Price is $3.72 Difference: $0.38
If BLD meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $3.41, suggesting downside of -8.6% (ex-dividends)

The company's fiscal year ends in June.

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

Citi rates BOQ as Buy (1) -

Banking analysts at Citi have revisited their sector views and forecasts post the firm rally off March lows and with a clearer picture emerging on what the post initial lockdowns outlook might look like.

The analysts believe the prospect of rolling lockdowns will likely result in a persistent portfolio of loan deferments; while creating solvency challenges for small lenders; as well as slowing the dividend recovery, as regulators seek even higher capital buffers.

As a direct result of the general re-assessment, the rating for Bank of Queensland remains Buy. The target price has lifted to $7 from $6.50.

Citi's revised order of preference is Westpac on top, followed by ANZ Bank, National Australia Bank, Bank of Queensland, Bendigo & Adelaide Bank, then -lastly- CommBank.

Target price is $7.00 Current Price is $6.22 Difference: $0.78
If BOQ meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $5.86, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in August.

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

Citi rates BSL as Neutral (3) -

BlueScope Steel announced it expects underlying earnings (EBIT) for FY20 to be around $560m.

The broker believes the US business is less impacted from covid-19 disruption than feared, resulting in better capacity utilisation at North Star and a much better operational performance for Building Products in China.

While Australian domestic despatches are holding up well, the broker believes Australian domestic demand into 2021 is the biggest downside risk.

Citi has increased earnings estimates for FY20 by 56% and  FY21 by 32%.

Neutral rating is maintained. The target price is $13.

Target price is $13.00 Current Price is $11.24 Difference: $1.76
If BSL meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Credit Suisse rates BSL as Outperform (1) -

BlueScope Steel’s second-half operating income at $260m beat both consensus estimates and Credit Suisse’s forecast, with the total FY20 operating income missing the pre-covid-19 guidance (since withdrawn) by only about -7%, notes the broker.

Credit Suisse reports the result was driven by its core Australian Steel Products division, ability to maintain earnings in its Building Products business and a less than expected impact to the US’s North Star volumes.

No forward commentary was provided by company management and the broker has revised down its FY21 earnings forecast by -22% reflecting lower expected North Star proceeds.

The broker views the company as a high-quality cyclical exposure that remains exposed to any macro recovery in the US market.

While covid-19 poses a threat in terms of demand for steel, the broker expects the company’s strong balance sheet will help it sail through a period of market weakness.

Credit Suisse retains its Outperform rating with the target price increasing to $12.80 from $11.24.

Target price is $12.80 Current Price is $11.24 Difference: $1.56
If BSL meets the Credit Suisse target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Macquarie rates BSL as Outperform (1) -

BlueScope Steel has guided to FY20 earnings (EBIT) of around $560m, well ahead of consensus forecasts by brokers.

In Australia, Macquarie believes that domestic demand has been resilient and export coke sales have assisted. The broker forecasts a continuation of the robust demand for detached home sales.

In the US, the broker suggests that capacity restarts present a risk, but spreads are at historic lows, a situation unlikely to persist.

The broker revises EPS forecasts for FY20-22 by 12%, -2% and 8%, respectively.

Outperform rating maintained. Target is raised to $12.55 from $12.20.

Target price is $12.55 Current Price is $11.24 Difference: $1.31
If BSL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Morgan Stanley rates BSL as Underweight (5) -

BlueScope Steel guided towards FY20 operating income of $560m which is above Morgan Stanley’s expected $419m. The broker notes utilisation at North Star was above the industry levels at 90% while the Building Products business performed much better than expected.

The company expects the New Zealand segment to see a circa -$200m impairment in FY20 due to the shutdown. 

Operating income forecast for FY20-21 increased to $558m and $481m and the broker expects the first half of FY21 to be risky due to depressed US spreads.

Morgan Stanley retains its Underweight rating with a target price of $10. Industry view: Cautious.

Target price is $10.00 Current Price is $11.24 Difference: minus $1.24 (current price is over target).
If BSL meets the Morgan Stanley target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.53, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Ord Minnett rates BSL as Accumulate (2) -

BlueScope Steel provided earnings update for FY20 with the operating income 26% above Ord Minnett’s expectations. North Star, the Australian Steel Products division and the Building Products division performed better than expected by the broker.

Volumes for Australian steel products and North Star are looking robust, almost one month into FY21, notes the broker.

FY21 is expected to be the earnings trough but the broker feels BlueScope Steel’s net cash position of $100m will ensure the company is well-placed to manage the challenges ahead.

The earnings resilience shown by the company throughout covid-19 has left the broker surprised. In the medium-term, Ord Minnett predicts a strong performance, especially considering the North Star expansion.

Ord Minnett retains its Accumulate recommendation with the target price increasing to $15 from $14.70.

Target price is $15.00 Current Price is $11.24 Difference: $3.76
If BSL meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

UBS rates BSL as Neutral (3) -

BlueScope Steel guided to 2H20 earnings (EBIT) of $260m, well ahead of the UBS forecast of $160m.

The broker states that 70% of the difference was attributable to Building Products Asia & North America. This was due to a faster than expected recovery in China and improving margins in North America.

UBS sees steel spreads being at a cyclical low and they should be increased with the reopening of the US economy and easing of scrap prices.

The broker forecasts 1H20 earnings of $185m and lifts FY21 earnings forecasts by 16% to $425m.

Neutral rating is maintained. Target is raised to $11.80 from $11.50.

Target price is $11.80 Current Price is $11.24 Difference: $0.56
If BSL meets the UBS target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $12.53, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Citi rates BXB as Buy (1) -

Citi updates the Brambles US Pallets Cost Monitor and reveals that lumber inflation has increased markedly by 16.6% in June 2020, which is the highest monthly increase since July 2018. This has largely been driven by robust housing demand in the US. The broker awaits further signals but reports that pallet pricing has remained rational so far.

The good news for margins is that transport rate declines have been sustained. Citi estimates that freight rates contribute around 70%-80% of Brambles Net Transport Costs and Linehaul freight rates have declined -6.2% in 2H20 forecasts.

The broker believes that  despite the potential increase for US margins due to overall lower cost inflation, the outlook for earnings is becoming increasingly uncertain and covid-19 challenges remain.

The broker retains its Buy rating with a target price of $13.80.

Target price is $13.80 Current Price is $11.29 Difference: $2.51
If BXB meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $12.63, suggesting upside of 13.6% (ex-dividends)

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: 0.7

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

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

Banking analysts at Citi have revisited their sector views and forecasts post the firm rally off March lows and with a clearer picture emerging on what the post initial lockdowns outlook might look like.

The analysts believe the prospect of rolling lockdowns will likely result in a persistent portfolio of loan deferments; while creating solvency challenges for small lenders; as well as slowing the dividend recovery, as regulators seek even higher capital buffers.

As a direct result of the general re-assessment, CommBank's rating has been pulled back to Neutral from Buy. The target price has lifted to $71 from $68.75.

Citi's revised order of preference is Westpac on top, followed by ANZ Bank, National Australia Bank, Bank of Queensland, Bendigo & Adelaide Bank, then -lastly- CommBank.

Target price is $71.00 Current Price is $72.60 Difference: minus $1.6 (current price is over target).
If CBA meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $65.54, suggesting downside of -9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Macquarie rates CDA as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage of Codan with an Outperform rating and a target price of $9.

The business has three segments focused on servicing an international customer base across Metal Detection (Minelab), Radio Communications and Tracking Solutions (Minetec) through its partnership with Caterpillar. Minelab accounts for around 70% of profit and Radio Communications around 30% with a minimal contribution from Minetec at this stage.

The broker believes the company has highly technical product IP that can be sold globally. Recent investment increases the new product pipeline according to the broker. Five major metal detection projects are currently under development.

Macquarie believes Codan has a strong long-term outlook driven by technology innovation and a sound strategy to raise existing business lines up the value chain.

Target price is $9.00 Current Price is $8.29 Difference: $0.71
If CDA meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

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

Ord Minnett rates CGF as Hold (3) -

Challenger will be reporting its FY20 result on August 11.

The company remains at risk from more economic dislocation, comments Ord Minnet while expecting dividends to be constrained in FY21. In the medium term, the broker expects the global quantitative easing efforts may boost the company's performance.

While the company is well capitalised, the broker thinks it may face leverage risk with asset prices under pressure. Also, the broker feels Challenger’s aim of paying 45-50% of earnings may be too ambitious.

Ord Minnet holds onto its Hold rating with the target price increasing to $4.56 from $4.40.

Target price is $4.56 Current Price is $4.49 Difference: $0.07
If CGF meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $5.05, suggesting upside of 14.3% (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

Credit Suisse rates COL as Downgrade to Neutral from Outperform (3) -

Credit Suisse downgrades its rating to Neutral from Outperform after a period of share price out-performance.

Looking past near-term factors, the broker expects Coles Group to benefit from sales shifting from the food service channel in FY21.

The broker prefers Woolworths ((WOW)) over Coles Group due to more certainty in terms of cost and operating income guidance for the year. Coles also has a weaker digital presence than Woolworths, although this is unlikely to be a major factor in the near term, believes the broker.

The target price is increased to $18.70 from $18.63.

Target price is $18.70 Current Price is $18.15 Difference: $0.55
If COL meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $17.05, suggesting downside of -4.8% (ex-dividends)

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 CSR as Downgrade to Underweight from Equal-weight (5) -

Covid-19 continues to impact current activity levels in the construction industry and Morgan Stanley expects more pain in the future due to a slowdown in tenders along with deteriorating access to finance.

This deterioration has been more prominent in the residential space, finds the broker while also noting risks to demand in late 2020 and early 2021, with builders unable to refill their work pipelines.

The broker favours infrastructure exposure while looking to avoid domestic residential construction.

CSR has considerable exposure to the residential sector and Morgan Stanley downgrades the stock to Underweight from Equal-weight. The target price is reduced to $3.10 from $3.75.

The industry view is cautious.

Target price is $3.10 Current Price is $3.64 Difference: minus $0.54 (current price is over target).
If CSR 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 $3.98, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Morgans rates CWP as Hold (3) -

Cedar Woods Properties had guided to $43m FY20 profit pre-virus, but now the company expects $20-21m, down -57% on FY19. The disruption has pushed a material number of settlements into July, being FY21.

Pre-sales of $360m by June compares favourably with $330m in FY19, the broker notes, suggesting solid earnings certainty and an uplift into FY21-22. That said, a return to pre-virus earnings is unlikely until after FY22, but the broker highlights a strong balance sheet offering acquisition potential in a weak market.

Target rises to $5.34 from $5.14, Hold retained.

Target price is $5.34 Current Price is $5.06 Difference: $0.28
If CWP meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

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

Ord Minnett rates DMP as Hold (3) -

Domino’s Pizza Inc (DPZ, master franchisor for Domino’s Pizza Enterprises) reported its second-quarter results with international same-store-sales (SSS) growth of 1.3% and Japan leading the way.

The broker notes Japan was also a key driver of operating earnings growth for Australia's Domino’s Pizza Enterprises. Ord Minnett expects Domino’s Pizza Enterprises to have outperformed DPZ International driven by its performance in Japan, Germany and Australia.

Car side takeaways, trialled in the US, could be considered in some markets like Australasia, suggests the broker. Ord Minnet maintains its Hold rating with a target price of $70.

Target price is $70.00 Current Price is $74.01 Difference: minus $4.01 (current price is over target).
If DMP meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $58.11, suggesting downside of -20.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

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

Covid-19 continues to impact current activity levels in the construction industry and Morgan Stanley expects more pain in the future due to a slowdown in tenders along with deteriorating access to finance.

This deterioration has been more prominent in the residential space, finds the broker while also noting risks to demand in late 2020 and early 2021, with builders unable to refill their work pipelines.

The broker favours infrastructure exposure while looking to avoid domestic residential construction.

For Fletcher Building, the broker sees a risk of deterioration in Australian conditions and an inevitable decline in New Zealand.

Morgan Stanley retains its Equal-weight rating with the target price increasing to $3.87 from $3.83.

The industry view is cautious.

Target price is $3.87 Current Price is $3.20 Difference: $0.67
If FBU meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $3.87, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in June.

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: 0.0

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

Morgans rates HLO as Upgrade to Add from Hold (1) -

It came as no surprise to Morgans that Helloworld raised fresh equity to strengthen its balance sheet. Second half earnings were actually better than expected, but barring a vaccine the broker does not see the company returning to FY19 earnings levels before FY23.

Given a low cost base, and fresh capital, Helloworld has enough liquidity to carry it through and is well positioned for an eventual recovery in travel, Morgans suggests. On this basis the broker sees the stock as too cheap and upgrades to Add from Hold. Target rises to $2.46 from $2.11.

Target price is $2.46 Current Price is $1.90 Difference: $0.56
If HLO meets the Morgans target it will return approximately 29% (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 JHX as Overweight (1) -

Covid-19 continues to impact current activity levels in the construction industry and Morgan Stanley expects more pain in the future due to a slowdown in tenders along with deteriorating access to finance.

This deterioration has been more prominent in the residential space, finds the broker while also noting risks to demand in late 2020 and early 2021, with builders unable to refill their work pipelines.

The broker favours infrastructure exposure while looking to avoid domestic residential construction.

Morgan Stanley prefers quality names with a competitive advantage and James Hardie Industries fits the bill.

Morgan Stanley reaffirms its Overweight rating with the target price reducing to $32 from $34.

The industry view is cautious.

Target price is $32.00 Current Price is $28.51 Difference: $3.49
If JHX meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $31.42, suggesting upside of 12.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY21:

Forecast for FY22:

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 NAB as Buy (1) -

Banking analysts at Citi have revisited their sector views and forecasts post the firm rally off March lows and with a clearer picture emerging on what the post initial lockdowns outlook might look like.

The analysts believe the prospect of rolling lockdowns will likely result in a persistent portfolio of loan deferments; while creating solvency challenges for small lenders; as well as slowing the dividend recovery, as regulators seek even higher capital buffers.

As a direct result of the general re-assessment, the rating for National Australia bank remains Buy. The target price has decreased to $23.50 from $24.75.

Citi's revised order of preference is Westpac on top, followed by ANZ Bank, National Australia Bank, Bank of Queensland, Bendigo & Adelaide Bank, then -lastly- CommBank.

Target price is $23.50 Current Price is $18.10 Difference: $5.4
If NAB meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $20.07, suggesting upside of 12.4% (ex-dividends)

The company's fiscal year ends in September.

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 OGC as Upgrade to Outperform from Neutral (1) -

OceanaGold has released a preliminary economic assessment of the Waihi District in New Zealand, which has positively surprised Macquarie.

The company is confident of obtaining approvals for the mine plan and the Waihi Study estimates total production of 2.2m ounces at an All-In Sustaining Cost (AISC) of US$627/oz out to 2036. This is in contrast to the broker's forecast of 1.2m ounces out to 2028 at US$960/oz.

The study estimates US$447m of growth capital, US$105m of sustaining capital and US50m in rehabilitation and closure costs will be required over the life-of-mine plan. The vast majority of this capital will be spent over the next eight years.

The rating is upgraded to Outperform from Neutral. The target price is increased to $3.70 from $3.32.

Target price is $3.70 Current Price is $3.31 Difference: $0.39
If OGC meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting upside of 7.5% (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: 0.6

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

Credit Suisse rates RIO as Underperform (5) -

Credit Suisse reports Rio Tinto had a strong June quarter, with the buoyant Chinese steel market continuing to drive huge margins for all iron ore producers.

Iron Ore prices are expected to reduce this quarter with China entering a softer seasonal period along with improving shipments from Brazil.

The broker expects a strong first half result and assumes a 50% payout, which is considered prudent in the current environment.

Credit Suisse reaffirms its Underperform rating with a target price of $86.

Target price is $86.00 Current Price is $104.14 Difference: minus $18.14 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $101.93, suggesting downside of -3.2% (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: 0.2

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

Macquarie rates RIO as Outperform (1) -

Rio Tinto announced a mixed second quarter for the calendar year according to Macquarie.

While shipment volumes for key commodities were in line with the broker's forecasts, capital expenditure guidance was raised for the next three years. As a result, Macquarie adjusts the estimated target price slightly lower to $110.

Macquarie believes Rio Tinto's earnings upgrades momentum remains strong. Outperform rating is maintained. The price target is decreased to $110 from $112.

Target price is $110.00 Current Price is $104.14 Difference: $5.86
If RIO meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $101.93, suggesting downside of -3.2% (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: 0.2

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

Ord Minnett rates RIO as Accumulate (2) -

Rio Tinto’s June quarter production numbers are out and show iron ore volumes recovering by 19% quarter on quarter.

The production in Chile was also strong despite the impact of covid-19 and the group’s copper output surpassed Ord Minnet’s estimates by 21%.

Additional capital expenditure guidance of -US$0.5bn has been provided for 2022-22 but without naming which projects would be affected. 

The broker notes potential upside to its earnings forecasts if iron ore prices remain above US$110/t for an extended period.

Ord Minnett retains its Accumulate rating with the target price reducing to $115 from $116.

Target price is $115.00 Current Price is $104.14 Difference: $10.86
If RIO meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $101.93, suggesting downside of -3.2% (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: 0.2

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

UBS rates RIO as Neutral (3) -

Rio Tinto reported Q2 iron ore shipments of 86.7mt, slightly below UBS forecasts. Mined copper exceeded forecasts due to record throughput at Escondida. Aluminium and alumina production were -1.2% below the broker's forecast.

The company estimates that covid-19 could disrupt circa -3%-4% of annual copper supply in 2020.

The company is progressing its plans at Simandou with partners Chinalco and the Guinean government. At this stage it's unclear whether Rio Tinto will remain involved in the project through to production, says the broker.

Neutral rating maintained. The target price is increased to $102 from $101.

Target price is $102.00 Current Price is $104.14 Difference: minus $2.14 (current price is over target).
If RIO 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 $101.93, suggesting downside of -3.2% (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: 0.2

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

Credit Suisse rates SXY as Outperform (1) -

Credit Suisse notes the positive catalysts which led the broker to upgrade its rating on Senex Energy to Outperform in February 2020 still persist and provide more valuation upside, notwithstanding the pandemic-led setback.

This is led by the 2P reserve upgrade mostly driven by Atlas on the back of better than expected drilling results, completion of the Roma North FEED, expected expansion at Atlas along with new acreage development, among others.

Credit Suisse maintains its Outperform rating with the target price increasing to $0.36 from $0.29.

Target price is $0.36 Current Price is $0.28 Difference: $0.08
If SXY meets the Credit Suisse target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $0.40, suggesting upside of 41.8% (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

Ord Minnett rates TAH as Lighten (4) -

June lottery jackpot data show Tabcorp Holdings’ small draws ($3m and $8m) outperformed historical averages, reports Ord Minnett.

The broker saw a jump in jackpot size with an increase seen in four Powerball jackpots in June and early July, showing strong sales. 

Digital traffic was considerably higher on android as compared to last year and sales remain resilient due to the migration to digital from retail. The broker forecasts FY20 lotteries revenue of $2.63bn, down -0.5% from FY19 levels.

 Ord Minnett retains its Lighten recommendation with a target price of $2.10.

Target price is $2.10 Current Price is $3.34 Difference: minus $1.24 (current price is over target).
If TAH meets the Ord Minnett target it will return approximately minus 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.30, 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 TRS as Overweight (1) -

The Reject Shop will report its FY20 earnings on August 19^th and Morgan Stanley thinks the most price-sensitive element of the release will be the medium-term outlook on profitability targets.

Specifically, the broker is keenly looking for revenue and margin targets and the timeframe for achievement. 

Morgan Stanley rates the stock as Overweight with a target price of $10. Industry view: In-line.

Target price is $10.00 Current Price is $6.94 Difference: $3.06
If TRS meets the Morgan Stanley target it will return approximately 44% (excluding dividends, fees and charges).

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

Citi rates WBC as Buy (1) -

Banking analysts at Citi have revisited their sector views and forecasts post the firm rally off March lows and with a clearer picture emerging on what the post initial lockdowns outlook might look like.

The analysts believe the prospect of rolling lockdowns will likely result in a persistent portfolio of loan deferments; while creating solvency challenges for small lenders; as well as slowing the dividend recovery, as regulators seek even higher capital buffers.

As a direct result of the general re-assessment, Westpac's rating remains Buy, while the target price drops to $23.50 from $26.

Citi's revised order of preference is Westpac on top, followed by ANZ Bank, National Australia Bank, Bank of Queensland, Bendigo & Adelaide Bank, then -lastly- CommBank.

Target price is $23.50 Current Price is $17.89 Difference: $5.61
If WBC meets the Citi target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $19.99, suggesting upside of 13.0% (ex-dividends)

The company's fiscal year ends in September.

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 released its June quarter production report and Morgan Stanley notes coal production beat the broker’s estimates by 27%, with FY20 production in-line with guidance. All in all, the broker considers this to be a strong result.

Earnings forecasts reduced for FY20 driven by lower sales which are expected to improve in FY21, increasing earnings forecast for the financial year.

Morgan Stanley maintains its Overweight rating while increasing the target price to $2.30 from $2.25. Industry view: Attractive.

Target price is $2.30 Current Price is $1.55 Difference: $0.75
If WHC meets the Morgan Stanley target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $2.20, suggesting upside of 42.9% (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 WOW as Neutral (3) -

Credit Suisse views Woolworths as a solid hold entering FY20 and prefers it over the Coles Group ((COL)) due to its cost and operating income guidance certainty for FY20.

The broker believes the improvement in Woolworths, with sales revenue up 28% in the fourth quarter to June 14, was under-appreciated by investors.

The retailer has a strong online presence, a factor that will be more important in the long-term, comments the broker.

Earnings forecasts have been reduced for the first half of FY21 due to ongoing social distancing restrictions in Victoria although on the whole, the broker feels the Woolworths’ hotel business is well placed to deal with the uncertainty.

Credit Suisse maintains its Neutral rating with the target price decreasing to $37.18 from $38.88.

Target price is $37.18 Current Price is $38.86 Difference: minus $1.68 (current price is over target).
If WOW meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $37.64, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

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