Australian Broker Call

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

The company has acquired Camperco, a motor home rental company operating in Ireland and the UK, for $8.2m. This marks the company's first move into the UK/Ireland rental market and provides options to grow in a substantial market as well as in Europe.

Morgans expects the acquisition to be 5% accretive in FY19/20. Following recent share price weakness the broker upgrades to Add from Hold. Target is raised to $1.98 from $1.93.

Target price is $1.98 Current Price is $1.63 Difference: $0.35
If ATL meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Macquarie rates BSL as Outperform (1) -

Macquarie has reviewed its thesis on the steel sector. Steel price assumptions have been raised by an average 7% and 11% in 2018 and 2019 respectively.

In the near term these increases are neutralised by raw materials. As a result, the broker downwardly revises BlueScope's earnings estimates for FY18 by -0.8% and raises estimates for FY19 by 11.9%.

Outperform retained. Target rises to $19.60 from $19.00.

Target price is $19.60 Current Price is $15.01 Difference: $4.59
If BSL meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $18.12, suggesting upside of 20.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

Morgan Stanley rates BTT as Overweight (1) -

The company will change its name to Pendal Group ((PDL)), to be confirmed by a shareholder meeting on April 27. The name change will apply to both the group and the Australian business while JO Hambro operations are unaffected.

Morgan Stanley believes the name change is a small headwind as BT is a well-established brand in Australia and re-branding brings additional marketing costs.

Licence costs will decrease as Westpac ((WBC)) owns the BT brand and the company has been licensing the name. Renewal is due later this year. Also Westpac intends to sell its remaining stake after the first half results on May 10.

Overweight. Industry view: In-Line. Target is $13.20.

Target price is $13.20 Current Price is $10.02 Difference: $3.18
If BTT meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $12.03, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

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

Morgan Stanley observes the stock continues to trade towards its bull case despite a strong performance and rich valuation, which implies further upside.

Equal-weight rating retained, as the broker considers perception is not reality and some of the bull case components are highly unlikely. In-Line industry view retained. Target is raised to $155 from $153.

Target price is $155.00 Current Price is $157.01 Difference: minus $2.01 (current price is over target).
If CSL 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 $163.57, suggesting upside of 4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Morgan Stanley rates CSR as Upgrade to Equal-weight from Underweight (3) -

Housing construction is more robust than previously anticipated, which coincides with favourable aluminium pricing. Morgan Stanley upgrades earnings estimates on this basis.

The broker considers the valuation fair and would look for evidence the company is trading at a meaningful discount to its historical multiple, or showing value through the cycle, before adopting a more positive stance.

Rating is upgraded to Equal-weight from Underweight. Target is raised to $5.00 from $4.25. Industry view: Cautious.

Target price is $5.00 Current Price is $5.21 Difference: minus $0.21 (current price is over target).
If CSR 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 $4.62, suggesting downside of -11.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

Deutsche Bank rates EVN as Hold (3) -

Deutsche Bank analysts returned from a site visit to the Cowal mine operation with plenty of optimism.

The analysts believe Cowal could be operating at 300kozpa by FY21 while potentially sustaining life beyond current reserves. However, they also believe this growth is already largely captured in current valuation.

Hold rating and $2.40 price target left untouched.

Target price is $2.40 Current Price is $3.11 Difference: minus $0.71 (current price is over target).
If EVN meets the Deutsche Bank target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.81, suggesting downside of -9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.1

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

Citi rates FMG as Downgrade to Sell from Buy (5) -

The realisation that price discounts for lower grade iron ore have become more structural than cyclical, balanced 2/3 plus 1/3 by Citi analysts, has led to reduced forecasts, a lower valuation and subsequently a downgrade to Sell from Buy.

The new price target of $4.10 compares with $5.40 previously. There are offsets through early repayment of debt, but in the end the now structural price discount prevails.

Target price is $4.10 Current Price is $4.37 Difference: minus $0.27 (current price is over target).
If FMG meets the Citi target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.24, suggesting upside of 20.0% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.3

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

Credit Suisse rates FMG as Outperform (1) -

Credit Suisse remains of the view that there is underlying value in the stock but also acknowledges the risks. The main unknowns are how the new product strategy will be implemented and how the pricing backdrop evolves.

The broker suggests the March quarter was again weak from a price realisation perspective. Embedded in the brokers numbers is a gradual return to 85% price realisation by FY21.

Outperform rating and $5.75 target maintained.

Target price is $5.75 Current Price is $4.37 Difference: $1.38
If FMG meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.24, suggesting upside of 20.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: 0.3

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

Macquarie rates GOR as Outperform (1) -

The company is shifting its reporting to a December year end, in line with joint-venture partners at Gruyere. Macquarie considers the company in a strong position, with the project one year out from its first gold.

Gruyere is on time and on budget and drilling continues with the aim of adding additional resources to the mine plan. Reinvigorating exploration on the South Yamarna tenements remains key to further discoveries.

Outperform rating. Target unchanged at $1.00.

Target price is $1.00 Current Price is $0.82 Difference: $0.18
If GOR meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates NCK as Neutral (3) -

Citi has stuck by its Neutral rating and $7 price target on news that Anthony Scali, founder and major shareholder, has sold half of his equity in the business to a strategic investor, Jason Furniture.

On the plus side of this transaction, Citi believes this deal opens up possibilities for a quicker international expansion. On the minus side, Scali is seen as a leading retailer in Australia and with the cycle turning this material reduction in personal ownership cannot be seen as an endorsement of the sector overall.

Citi maintains guidance for the current year looks conservative. No changes have been made.

Target price is $7.00 Current Price is $6.80 Difference: $0.2
If NCK meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Credit Suisse rates NCM as Underperform (5) -

The company has recommenced mining of Cadia, having suspending all operations on March 10. Mining will recommence from panel cave 1 with a resumption of mining in panel cave 2 in due course. Processing remains suspended.

Credit Suisse models no Cadia production over the remainder of the second half which may prove conservative if processing re-starts using the southern tailings dam.

Underperform and $18.50 target maintained.

Target price is $18.50 Current Price is $19.65 Difference: minus $1.15 (current price is over target).
If NCM meets the Credit Suisse target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $20.41, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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 NCM as Accumulate (2) -

The company has recommenced mining operations at Cadia. Processing operations remain suspended. Ord Minnett continues to assume processing re-starts in April at a restricted run rate.

The broker retains a view that the stock has been oversold. Accumulate rating and $24 target maintained.

Target price is $24.00 Current Price is $19.65 Difference: $4.35
If NCM meets the Ord Minnett target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $20.41, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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 NWS as Initiation of coverage with Sell (5) -

Stripping out the separately-listed REA Group ((REA)), which comprises approximately half of the company's market value, UBS estimates the market is pricing in the remaining traditional media assets at around $7.06-8.43.

The broker envisages potential upside catalysts relating to this "stub", including participation in consolidation in Australia/US following changes to cross-media ownership laws and cost reduction opportunities from the proposed merger of Foxtel/Fox Sports and a printing joint venture with Fairfax ((FXJ)).

UBS initiates coverage with a Sell rating and $20.40 target.

Target price is $20.40 Current Price is $20.71 Difference: minus $0.31 (current price is over target).
If NWS meets the UBS target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.27, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.2

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

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

After the significant fall in the share price Macquarie upgrades Orocobre to Outperform from Neutral. Target is reduced to $6.80 from $7.15.

Target price is $6.80 Current Price is $5.71 Difference: $1.09
If ORE meets the Macquarie target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $7.34, suggesting upside of 28.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Credit Suisse rates OZL as Underperform (5) -

The company has launched a $418m takeover bid for Avanco Resources ((AVB)). The offer consists of 50:50 cash:scrip. Credit Suisse notes the portfolio of producing and near-producing assets offers little potential to generate cash in the near term, but there are some diversification benefits.

The main value, in the broker's opinion, lies in the acquisition's undeveloped assets and exploration opportunity. Underperform. Target is $8.55.

Target price is $8.55 Current Price is $9.00 Difference: minus $0.45 (current price is over target).
If OZL meets the Credit Suisse target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.84, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgans rates OZL as Hold (3) -

The company has announced the off-market takeover of Avanco Resources ((AVB)) for $418m, comprised of cash and scrip. Morgans believes the acquisition is expensive relative to recent trading but understands the strategic rationale in acquiring cash flow from a prospective suite of projects.

The broker suggests the market will take time to be convinced about this acquisition and believes strong execution on Carrapateena is required in 2018 to retain the market's faith in the stock. Hold rating and $9.80 target maintained.

Target price is $9.80 Current Price is $9.00 Difference: $0.8
If OZL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $9.84, suggesting upside of 9.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Macquarie rates S32 as Upgrade to Outperform from Underperform (1) -

Macquarie upgrades the price target to $3.70 from $3.10, largely because of significant increases to its long-term manganese ore and thermal coal price forecasts but also from higher long-term aluminium and alumina prices.

The most significant changes are upgrades to manganese ore prices, which have benefited from Chinese environmental reforms.

These price upgrades have transformed the company's longer-term earnings outlook and the broker upgrades to Outperform from Underperform.

Target price is $3.70 Current Price is $3.24 Difference: $0.46
If S32 meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.37, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

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

Market Sentiment: -0.1

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

Citi rates TAH as Buy (1) -

According to news reports, the federal government is about to legislate a ban on betting on so called 'synthetic lotteries' and keno products, in line with what has already been put in place in the Northern Territory.

Citi analysts are not surprised by the move, though they are surprised by the timing of it. Such legislation effectively blocks online competitors and is thus a positive for Tabcorp, point out the analysts.

No changes made.

Target price is $5.85 Current Price is $4.43 Difference: $1.42
If TAH meets the Citi target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $5.26, suggesting upside of 18.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.7

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

Macquarie rates TCL as Outperform (1) -

Macquarie now has enough detail on the acquisition of the A25 in Montreal to put a model together. The company had suggested this was immediately accretive and Macquarie calculates the accretion grows to around CAD22m by 2023.

The broker suggests the value addition is longer dated, with an overall estimated internal rate of return of 8% and believes it is the second stage, namely the widening of the feeder roads or a new partnership agreement on competing bridges, that provides upside to the transaction.

No changes to earnings estimates or target of $12.44 are made. Outperform rating.

Target price is $12.44 Current Price is $11.43 Difference: $1.01
If TCL meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $13.06, suggesting upside of 14.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.8

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

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

Macquarie has improved its long-term outlook for the coal price which drives an increase in the target by 10% to $4.60. The changes to coal price forecasts, combined with adjustments to the coal sales mix, have tempered earnings downgrades in the near term.

With the stock now offering a 16% total shareholder return the broker upgrades to Outperform from Neutral.

Target price is $4.60 Current Price is $4.51 Difference: $0.09
If WHC meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $4.64, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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