Australian Broker Call

Ord Minnett rates A1M as Buy (1) -

AIC Mines has passed the 90% compulsory acquisition threshold, hence Ord Minnett now incorporates Demetallica (DRM) into its valuation model. While there will be short term earnings dilution, net asset value increases.

The acquisition also increases AIC’s prominence in terms of scale, liquidity, mine life and risk profile, the broker notes, which should place it on the radar for more investors.

Speculative Buy retained, target rises to 80c from 75c.

Target price is $0.80 Current Price is $0.44 Difference: $0.36
If A1M meets the Ord Minnett target it will return approximately 82% (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

Morgans rates ASX as Hold (3) -

Morgans assesses a soft November for the ASX, from announced trading activity, with weaker equities volumes and materially lower capital raisings compared to the previous corresponding period. A slight offset was stronger Futures volumes, explains the analyst.

The broker lowers its FY23-25 EPS forecasts by around -2% and increases in the risk-free rate to 3.6% from 3.0%. As a result of these changes, the target falls to $72.40 from $75.60. Hold.

Target price is $72.40 Current Price is $68.44 Difference: $3.96
If ASX meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $75.11, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

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

Morgan Stanley highlights the absence of a 1Q trading update at the Bank of Queensland AGM though points to various snippets of management commentary.

The bank is experiencing "good business momentum" in housing loans and is "investing more" in its control environment while maintaining a focus on overall cost discipline.

The broker feels buybacks are unlikely given management noted a "slightly positive outcome" from APRA's new capital framework and the bank will "seek to preserve this benefit".

The Equal-weight rating and $7.40 target are unchanged. Industry view: In-Line.

Target price is $7.40 Current Price is $7.15 Difference: $0.25
If BOQ meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $7.79, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Ord Minnett rates BOQ as Hold (3) -

Bank of Queensland did not provide an operational update at its AGM, but did explain why the CEO was shown the door. Commentary confirmed Ord Minnett's assumptions.

The bank is likely to see higher cost growth than expected as it addresses systems deficiencies and uplifts risk management. Loan growth is likely to slow as the company manages more for margin performance than growth.

Hold retained, target falls to $7.60 from $8.00.

Target price is $7.60 Current Price is $7.15 Difference: $0.45
If BOQ meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $7.79, suggesting upside of 10.2% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

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

Taking into account recent share price strength, increasing competition for the Warrego Energy ((WGO)) acquisition, and the financial troubles for Clough, the Waitsia project's contractor, Morgans downgrades its Beach Energy rating to Hold from Add.

Hancock Energy has increased its competing bid for Warrego to 28cps, ahead of the 20cps pitched by Beach nearly a month ago.

The broker allows an additional 10% increase on its forecast capital expenditure to go on the Waitsia infrastructure in 2023. The target falls to $1.91 from $1.97.

Target price is $1.91 Current Price is $1.82 Difference: $0.09
If BPT meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.95, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Ord Minnett rates BPT as Downgrade to Hold from Accumulate (3) -

Ord Minnett suggests Beach Energy offers good exposure to tightening East Coast gas markets, but also highlights a number of potential downside risks, including a recent history of operational issues and the ongoing threat of government intervention.

There is also the issue of Beach competing with Strike Energy ((STX)) and Gina Rinehart’s Hancock Energy for Warrego Energy ((WGO)).

As the stock has recently outperformed sector peers significantly, the broker pulls back to Hold from Accumulate. Target unchanged at $1.90.

Target price is $1.90 Current Price is $1.82 Difference: $0.08
If BPT meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $1.95, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates GNC as Buy (1) -

Were it not for flooding, UBS estimates the east coast winter crop estimate for FY23 would have been for over 29mt (similar to FY21/22). As it is, ABARES is forecasting 26.9mt, marginally revised down from its September estimate of 27mt.

While FY22 likely represents peak earnings for GrainCorp, the broker recently upgraded its rating to Buy. The $8.65 target is maintained.

Target price is $8.65 Current Price is $7.94 Difference: $0.71
If GNC meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $9.58, suggesting upside of 21.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.6

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

Citi rates GUD as Upgrade to Buy from Neutral (1) -

Citi reviews the Australian auto parts and equipment sector (small caps) and notes the rebound in the original-equipment-manufacturing sector continues, new car sales rising 18% in November.

The broker expects this augurs well for GUD Holdings but suspects a full supply chain recovery might dovetail with a recession.

The broker trims the company's earnings forecasts and notes it prefers ARB Corporation ((ARB)) and Bapcor ((BAP)).

But Citi upgrade's the company's rating to Buy from Neutral to reflect the company's low price-earnings multiple. Target price rises 14% to $10.

Target price is $10.00 Current Price is $8.16 Difference: $1.84
If GUD meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $11.77, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Citi rates IMD as Buy (1) -

Citi reviews small cap contractors and identifies Imdex as its top pick in a tight labour market.

The broker explains the company is resilient to a tight labour market given its grow does not depend on higher staff levels (enjoying the highest level of revenue per employee) and is well placed to increase margins through pricing.

This is reflected in the company's 18% earnings (EBITDA) per headcount compound annual growth rates between FY19 and FY22, says the broker. Imdex also reported record quarterly revenue at its October AGM and observed supply chain pressures were easing.

Citi notes the company's one-stop offering is larger than peers, enhancing switching opportunities.

Buy rating and $2.70 target price retained.

Target price is $2.70 Current Price is $2.29 Difference: $0.41
If IMD meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $2.61, suggesting upside of 14.0% (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

Ord Minnett rates IPH as Initiation of coverage with Hold (3) -

Ord Minnett has initiated coverage of leading intellectual property services group IPH, which operates in the secondary markets of Australia, Canada and Asia.

IPH has several attractive characteristics, the broker suggests, such as a capital-light business model and strong cash generation capability, and enjoys near-term tailwinds, particularly in the current uncertain economic environment.

But Ord Minnett sees the stock as relatively fully priced, hence sets a Hold recommendation with an $8.70 target.

Target price is $8.70 Current Price is $8.75 Difference: minus $0.05 (current price is over target).
If IPH meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.68, suggesting upside of 24.8% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates PIQ as Initiation of coverage with a Speculative Buy (1) -

Proteomics is the industrial-scale study of the structure and function of proteins, and Proteomics International Laboratories is a global leader in this field.

Morgans initiates coverage of the company with a Speculative Buy rating and considers now is an opportune time to gain exposure, as confirmation of a partnership with Sonic Healthcare ((SHL)) USA is due in coming weeks. De-risking of further tests are also in the pipeline.

Apart from these tests, the company has a core analytical services business, which provides specialist contract research and a commercial-ready diagnostic for diabetic kidney disease, explains the analyst.

A target price of 85c is set.

Target price is $0.85 Current Price is $0.89 Difference: minus $0.035 (current price is over target).
If PIQ meets the Morgans target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Macquarie rates PMV as Outperform (1) -

A 23.6% rise in sales for the first 17 weeks of FY23 for Premier Investments is tracking well ahead of Macquarie's estimate for flat growth for the 1H in full. The broker now expects around 10% sales growth for 1H.

The positive update provides reassurance to the analyst around the company's ranging and distribution decisions.

While remaining cautious on the macroeconomic outlook, Macquarie raises its FY23 EPS forecast by 21.3%. After multiples are lowered, the target price remains at $29. Outperform. 

Target price is $29.00 Current Price is $25.39 Difference: $3.61
If PMV meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $25.89, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates RMD as Outperform (1) -

Macquarie doesn't anticipate regulatory changes following the release of the final report by the US Agency for Healthcare Research and Quality (AHRQ).

The report focused on focused on continuous positive airway pressure (CPAP) in treating obstructive sleep apnea, and the broker notes no implication CPAP has been ineffective in reducing adverse health events.

The Outperform rating and $37.75 target for ResMed are unchanged.

Target price is $37.75 Current Price is $32.83 Difference: $4.92
If RMD meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $36.63, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.5

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

Credit Suisse rates TAH as Outperform (1) -

Credit Suisse expects Tabcorp Holdings' Victorian licence will be renewed and raises its target price to $1.35 from $1.15.

Under the renewal, the broker expects all industry taxes/fees will apply to all operators equally, removing  Tabcorp's cost disadvantages and profit-sharing burden, while the point-of-consumption tax rises to 20%.

The renewal is due on August 15, 2024, and FY25 EPS forecasts rise 50% accordingly. News on the tender process should be forthcoming in September 2023, says the broker.

Outperform rating retained.

Target price is $1.35 Current Price is $1.07 Difference: $0.28
If TAH meets the Credit Suisse target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.09, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates TNE as Neutral (3) -

UBS has reinstated coverage of attractive growth story TechnologyOne though adopts a Neutral rating until a couple more positives eventuate.

Some caution is warranted before extrapolating the company's FY22 performance into a trend, particularly as the benefits of transition to SaaS slows, according to the analyst.

The broker would like to see net revenue retention (NRR) maintained at 115-120% into FY23 and evidence of a step-change in annual recurring revenue (ARR) performance in the UK. 

A $14.45 target is set.

Target price is $14.45 Current Price is $14.32 Difference: $0.13
If TNE meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $13.36, suggesting downside of -2.1% (ex-dividends)

The company's fiscal year ends in September.

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