Australian Broker Call

Macquarie rates AGI as Neutral (3) -

The company's forecasts suggest a significant skew to earnings in the second half. First half pre-tax profit is expected to be below the prior corresponding half because of product delays in Australia and a temporary margin impact in North America.

Macquarie suggests, in order for the stock to trade at a premium, there needs to be an improvement in new game performance that will drive gains in market share. The broker downgrades forecasts by -11% for FY18 to reflect lower Australian ship share and higher operating costs.

Rating is Neutral. Target is reduced to $2.19 from $2.36.

Target price is $2.19 Current Price is $2.17 Difference: $0.02
If AGI meets the Macquarie target it will return approximately 1% (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

Deutsche Bank rates BKW as Buy (1) -

Management has suggested the outlook for building products is positive, with a backlog of work translating into a long order book. In the first quarter, building product revenues increased 14% because of strong momentum and good weather.

Deutsche Bank expects 12% growth year-on-year in building product earnings in FY18. The broker retains a Buy rating and $15.57 target.

Target price is $15.57 Current Price is $13.99 Difference: $1.58
If BKW meets the Deutsche Bank target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $14.59, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in July.

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 BVS as Outperform (1) -

The company has reaffirmed guidance for net profit growth in the mid teens in FY18. A strong start to FY18 is already in evidence and guidance is consistent with Macquarie's forecasts for growth in earnings per share of 15.9%.

Management expects development capital expenditure will decrease in FY18 as more development is funded by the client.

Macquarie retains an Outperform rating. Target is raised to $1.91 from $1.86.

Target price is $1.91 Current Price is $1.67 Difference: $0.24
If BVS meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates GTY as Outperform (1) -

Macquarie observes the FY18 settlement target is achievable, factoring in the activity to date. The broker notes the stock has returned 14.4% in the last quarter, ahead of the A-REITs and the broader market.

Rating is Outperform. Target is raised to $2.21 from $2.08.

Target price is $2.21 Current Price is $2.18 Difference: $0.03
If GTY meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Macquarie rates HSO as Neutral (3) -

The company has reiterated FY18 guidance to be broadly similar to FY17. Financial targets for the Northern Beaches Hospital were also reiterated.

Macquarie retains a Neutral rating based on the uncertainty regarding the near-term outlook for underperforming sites in Victoria and elevated gearing levels. Target is $2.00.

Target price is $2.00 Current Price is $1.94 Difference: $0.06
If HSO meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.10, suggesting upside of 8.4% (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

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

Morgan Stanley expects its cautious view regarding private hospitals will continue to play out. Profitability concerns regarding the Northern Beaches Hospital are likely to limit the upside for Healthscope.

The broker remains comfortable with the balance sheet but, without full financials, the NBH potentially presents some risks to the gearing covenant.

Rating is Equal-weight. Price target is $1.80. In-Line industry view.

Target price is $1.80 Current Price is $1.94 Difference: minus $0.14 (current price is over target).
If HSO meets the Morgan Stanley target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.10, suggesting upside of 8.4% (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

Ord Minnett rates HSO as Hold (3) -

Ord Minnett observes Healthscope has made good progress with the Northern Beaches Hospital. The facility is now comfortably on track to take patients in October 2018.

The company has also reported a solid first quarter, with revenue growth well above industry rates. The broker points out Victoria/Tasmania earnings fell -9% in FY17 and the company did not provide an update on these sites at the briefing.

Hold. Target is $1.95.

Target price is $1.95 Current Price is $1.94 Difference: $0.01
If HSO meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.10, suggesting upside of 8.4% (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

UBS rates HSO as Buy (1) -

Eleven months out from opening, Healthscope's Northern Beaches hospital project in Sydney is on time and on budget, and the company believes it can achieve Hospital Division margins of 18% in the first 3-4 years of operation.

The broker's forecast is more conservative for the ramp-up stage, but risk is to the upside. A portfolio review is expected early next year given 12 of 45 hospitals provide 60% of earnings. Buy and $2.72 target retained.

Target price is $2.72 Current Price is $1.94 Difference: $0.78
If HSO meets the UBS target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $2.10, suggesting upside of 8.4% (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

UBS rates IGO as Neutral (3) -

Independence Group's recent share price run has been driven by expectations of growing EV/battery demand, the broker notes, but this is to ignore the opportunities at Nova. The market is pricing in higher nickel prices, not extended mine life.

Yet Independence has 12,000sqkm of tenements in the Fraser Range either unexplored or under-explored. Exploration success could provide a step-change in value, the broker believes. Target rises to $4.40 from $3.75. Neutral retained.

Target price is $4.40 Current Price is $4.37 Difference: $0.03
If IGO meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.98, suggesting downside of -8.9% (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

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

Morgans observes the share price has been punished after the company downgraded first half expectations. Transition to a new CEO, the loss of a key doctor and competitive pressures are the main issues.

However, underlying IVF cycle numbers are returning to long-term growth rates, and despite downgrading FY18 net profit forecasts by -7.2%, the broker is encouraged by broader market developments.

Morgans upgrades to Add from Hold. Target is reduced to $1.52 from $1.58.

Target price is $1.52 Current Price is $1.23 Difference: $0.29
If MVF meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

UBS rates MYX as Buy (1) -

The broker already had low expectations for Mayne in FY18 following a tough FY17, but guidance provided at the AGM proved lower still. Generic drug price deflation and weaker specialty products are to blame.

Management suggested some signs of hope for FY19. The broker is reviewing its forecasts but for now, Buy and $1.55 target.

Target price is $1.55 Current Price is $0.61 Difference: $0.94
If MYX meets the UBS target it will return approximately 154% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Deutsche Bank rates NVT as Hold (3) -

Total enrolments in the company's university programs are up 5% in the third semester. Enrolment growth is largely driven by Australasia and the UK, with North America providing a slight offset and down -4%.

Deutsche Bank makes minor changes to estimates to take into account the lack of certainty regarding the margins that will be generated by the division, given the recent closures.

Hold rating retained.  Target is raised to $4.50 from $4.30.

Target price is $4.50 Current Price is $5.08 Difference: minus $0.58 (current price is over target).
If NVT meets the Deutsche Bank target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.59, suggesting downside of -9.7% (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 NVT as Neutral (3) -

The company reported 8% growth in student enrolments in semester three, supporting Macquarie's assumptions for the university programs division.

FY18 is considered a transitional year as the business cycles out of contract losses. Two important renewals are due in the next four months - Curtin Singapore and Perth - and contract risk then reduces until 2020.

Neutral rating retained. Target is $4.92.

Target price is $4.92 Current Price is $5.08 Difference: minus $0.16 (current price is over target).
If NVT meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.59, suggesting downside of -9.7% (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

UBS rates NVT as Neutral (3) -

Navitas has seen mixed results across regions for third semester enrolments, but net improvement, the broker notes. Australia is strong, the UK has turned around but the US has turned negative for the first time.

The broker has increased its assumed multiple in lifting its target to $5.00 from $4.50, suggesting fair valuation. Neutral retained.

Target price is $5.00 Current Price is $5.08 Difference: minus $0.08 (current price is over target).
If NVT 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 $4.59, suggesting downside of -9.7% (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

Citi rates ORG as Neutral (3) -

Citi analysts draw increased confidence from Origin management's $500m cost-out update to the market. They are of the view that the suggested time line looks conservative.

Citi sees upside risk to guidance regarding Energy Markets. They also note there are benefits from refinancing, plus credit metrics suggest Origin can resume paying out dividends.

Neutral rating retained. Price target lifts 11% to $8.97.

Target price is $8.97 Current Price is $8.80 Difference: $0.17
If ORG meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $8.77, suggesting downside of -0.4% (ex-dividends)

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

Deutsche Bank rates ORG as Hold (3) -

The company has reaffirmed guidance for energy markets operating earnings of $1.7-1.8bn in FY18. APLNG production guidance is to 45-265 PJ and a break even of US$48/boe.

Deutsche Bank notes that this now brings Origin's upstream cost base to a level at APLNG comparable with that of GLNG.

The broker is of the view that these costs can be achieved. FY18 forecasts for earnings increase by 3% and FY19 by 11% to reflect this.

Hold rating retained. Target is raised to $7.35 from $6.55.

Target price is $7.35 Current Price is $8.80 Difference: minus $1.45 (current price is over target).
If ORG meets the Deutsche Bank target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.77, suggesting downside of -0.4% (ex-dividends)

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 ORG as No Rating (-1) -

The company reaffirmed FY18 in guidance with respect to APLNG, expenditure and debt. A much-anticipated change in the APLNG cost base has been announced.

Macquarie observes the quantum of reductions is more than $500m over the next 18 months. The broker adopts management's targets around costs, which translates to a $100m improvement in FY20.

Macquarie is restricted on rating and target at this stage.

Current Price is $8.80. Target price not assessed.

Current consensus price target is $8.77, suggesting downside of -0.4% (ex-dividends)

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

Morgan Stanley rates ORG as Overweight (1) -

The investor briefing has re-affirmed FY18 earnings and gas production guidance. Cost reductions at APLNG have been re-set.

Morgan Stanley calculates the company's target for cost improvements is looming more quickly than its base case estimates and this should be welcomed by investors.

Overweight rating. Target rises to $8.88 from $8.82. Industry view: Cautious.

Target price is $8.88 Current Price is $8.80 Difference: $0.08
If ORG meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.77, suggesting downside of -0.4% (ex-dividends)

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

Ord Minnett rates ORG as Accumulate (2) -

The investor briefing has reaffirmed Ord Minnett's positive view. The company is firmly focused on lowering debt and implementing cost savings at APLNG.

Combined, operating and capital expenditure savings are expected to result in cost reductions of -$500m per annum, bringing the operating break-even to less than US$24/boe.

Ord Minnett maintains an Accumulate rating and raises the target to $9.50 from $9.15.

Target price is $9.50 Current Price is $8.80 Difference: $0.7
If ORG meets the Ord Minnett target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $8.77, suggesting downside of -0.4% (ex-dividends)

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

UBS rates ORG as Buy (1) -

At its investor day, Origin announced what the broker considers to be aggressive yet credible cost-out targets for APLNG, better than expected, and supported by Santos' ((STO)) cost-out success nearby.

The broker retains Buy, confident that lower APLNG costs and a higher oil price will lead to increased earnings, reduced debt and the reinstatement of dividends in FY19. Target rises to $9.90 from $9.00.

Target price is $9.90 Current Price is $8.80 Difference: $1.1
If ORG meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.77, suggesting downside of -0.4% (ex-dividends)

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

Deutsche Bank rates TTS as Buy (1) -

The first quarter trading update was better than Deutsche Bank expected.  Lottery revenue growth of 8.8% benefited from an improved jackpot sequence while wagering appears to have stabilised.

The broker observes the business is in good shape ahead of the shareholder vote on December 12. Deutsche Bank retains a Buy rating. Target is $4.67.

Target price is $4.67 Current Price is $4.31 Difference: $0.36
If TTS meets the Deutsche Bank target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $4.27, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Macquarie rates TTS as No Rating (-1) -

First quarter trading indicates a marked improvement on the prior corresponding quarter, supported by strong jackpot runs in lotteries. Wagering remains soft, with a lower win rate affecting revenue.

Macquarie lowers operating earnings estimates by -6% and -5% for FY18 and FY19 respectively.

Macquarie is currently on research restriction and provides no rating or target at this stage.

Current Price is $4.31. Target price not assessed.

Current consensus price target is $4.27, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

Ord Minnett rates TTS as Lighten (4) -

Ord Minnett updates its model following the first quarter trading update. Lotteries revenue is increased to account for strong jackpots while a reduction in operating costs and win rates in wagering is implemented.

The broker retains a Lighten rating and raises the target to $4.20 from $4.00.

Target price is $4.20 Current Price is $4.31 Difference: minus $0.11 (current price is over target).
If TTS meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.27, suggesting downside of -0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.0

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

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

Morgans suspects the broader IVF market is stabilising, as recovery in NSW and Victoria offsets weakness in Queensland.

The weakness in the Virtus Health share price is considered an opportunity, seemingly affected by the unexpected downgrade by Monash IVF ((MVF)). The broker notes that the Monash issues are independent of the broader market.

Morgans upgrades to Add from Hold. Target is $5.46.

Target price is $5.46 Current Price is $5.04 Difference: $0.42
If VRT meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $6.19, suggesting upside of 22.8% (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