Australian Broker Call

Ord Minnett rates ABC as Hold (3) -

Ord Minnett recommends shareholders of Adbri accept the $3.20/share takeover offer by Irish group CRH. While regulatory approvals are still outstanding, the broker doesn't anticipate any roadblocks.

Shares will be suspended from trading at the close of trade on June 17, with implementation of the scheme on July 1.

The Hold rating and $3.20 target are maintained.

Target price is $3.20 Current Price is $3.16 Difference: $0.04
If ABC meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.20, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates ANZ as Sell (5) -

Citi's initial response to today's financial release states ANZ Bank's cash earnings beat market consensus by 0.5% while missing the broker's forecast by -0.5%.

It's what the French call: quantite negligable.

The net interest margin looks at face value a big miss, but the broker assures ex-markets the NIM is 1.63%, in line. Core earnings missed by -2% but there's a big beat in BDDs.

Dividend declared of 83c, only 65% franked, and no 'bonus' to make up for the lower franking, the analysts comment. There is also a $2bn share buyback.

Sell. Target $26.

Target price is $26.00 Current Price is $28.77 Difference: minus $2.77 (current price is over target).
If ANZ meets the Citi target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $27.98, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

UBS rates ANZ as Neutral (3) -

UBS believes the market's focus is shifting towards the integration of the Suncorp bank business, while today's capital return announcement should be positively received.

On the broker's initial assessment, ANZ Bank's financial release today seems to have beaten expectations on most key metrics, including the interim dividend of 83c.

UBS categorises today's release as "largely in line", with positives coming through the $2bn buyback, the Suncorp bank integration and the prospect of further capital return.

ANZ Bank is the broker's local favourite, with the broker believing it is the least exposed bank to structural headwinds to retail bank profits.

Neutral rating and $30.

Target price is $30.00 Current Price is $28.77 Difference: $1.23
If ANZ meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $27.98, suggesting downside of -2.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.2

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

Macquarie rates BHP as Neutral (3) -

Macquarie considers the possible scenario of BHP Group's bid for Anglo American, which currently stands at 0.7097 BHP shares per AAL share (excluding the divestment of a number of non core assets).

Although the target's board rejected the bid, it stands at a 31% premium based on April 23.

Under the UK's City Code om Takeovers and Mergers, BHP Group has until May 22 to make a revised bid, otherwise the company risks being restricted on making another offer for six months.

Macquarie considers the tier-one copper assets would substantially improve BHP Group's outlook in that sector and the analysts expect a revised bid in the upper end of 0.8-0,9x scrip range, compared to the current offer.

The Neutral rating and target price of $42.00 are retained.

Target price is $42.00 Current Price is $42.75 Difference: minus $0.75 (current price is over target).
If BHP meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $45.13, suggesting upside of 4.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Ord Minnett rates BXB as Upgrade to Accumulate from Hold (2) -

Ord Minnett raises its target for Brambles by 36% to $19.00 and upgrades the rating to Accumulate from Hold.

A new analyst at Ord Minnett takes over the research on the company and expects a higher mid-cycle operating margin of 21%, up from the 16% previously forecast.

The broker now assumes prices are increased broadly with inflation and volume gains will occur due to rising consumer spending, leading to market share gains in both existing and new markets.

For the firm's largest segment in the US, Ord Minnett predicts average volume growth of 2% (up from 1%) over the forecast period.

Target price is $19.00 Current Price is $14.38 Difference: $4.62
If BXB meets the Ord Minnett target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $16.28, suggesting upside of 12.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Shaw and Partners rates C79 as Buy (1) -

Chrysos has now fallen -20% since its March Q late-April update and is -35% below its recent peak, notes Shaw and Partners.
Investors seem torn between recent positive longer-term signals (eg Barrick global partnership) and non-delivery versus FY24 targets.

While the lowered FY24 target is frustrating, it does not change the broker's view of the company’s longer-term potential. Broadening its contracted base will now be a positive catalyst for the stock and Shaw understands this is a key management priority.

While contracting new units will be the key catalyst for the stock, the broker highlights its forecast for 18 deployed units in FY25 has
nearly 90% visibility, while Chrysos' runway of opportunity is far from mature.

Buy and $7.50 target retained.

Target price is $7.50 Current Price is $5.50 Difference: $2
If C79 meets the Shaw and Partners target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $7.55, suggesting upside of 35.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates CYC as Buy (1) -

Cyclopharm offered a market update highlighting the continued development of Technegas including a new CMS code for billing commencing on July 1.

Bell Potter states this will assist with reimbursement for hospital users and a Transitional Pass Through (TPT) Code looks likely to be approved on October 1.

The implementation of the TPT code is a slight delay, but it is expected the code will offer further hospital incentives for use ahead of other imaging agents.

With five installations year-to-date and another seven expected in the near term, the analyst rates the update as positive, even accounting for some delays.

The Buy rating is retained, the target lowered to $3.40.

Target price is $3.40 Current Price is $1.73 Difference: $1.67
If CYC meets the Bell Potter target it will return approximately 97% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgans rates EBR as Speculative Buy (1) -

Speculative Buy rating retained as Morgans was unpleasantly surprised by EBR Systems higher than expected 1Q cash burn, with higher R&D, staff and interest expenses only partially offset by lower manufacturing expenditures.

Earnings estimates have been lowered. The new price target is set at $1.57 (up from $1.49). The broker sees a clear positive in the company hiring a "well-credentialed CCO" to oversee product launch and to drive global business development activities.

It is the broker's view, this remains a company well placed to build a profitable medical device business.

Target price is $1.57 Current Price is $0.97 Difference: $0.6
If EBR meets the Morgans target it will return approximately 62% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Morgan Stanley rates EDV as Overweight (1) -

Retail sales growth of 0.9% for Endeavour Group compares to -1.4% for Coles Group ((COL)) Liquor over the same period, highlights Morgan Stanley.

Hotel Sales for Endeavour also rose by 1.7%, accelerating from the 1% disclosed in the February trading update, notes the analyst.

Management stated Q4 trading remains subdued and is broadly consistent with Q3 for both Retail and Hotels. There was no change to FY24 capex or interest cost guidance.

Target $6.40. Overweight. Industry View: In-line.

Target price is $6.40 Current Price is $5.24 Difference: $1.16
If EDV meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $5.87, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates EDV as Hold (3) -

Endeavour Group's sales trading update was broadly in line with expectations, comments Morgans. Retail sales proved slightly below and Hotels outperformed slightly.

Only minor adjustments have been made to forecasts, with the broker highlighting management is still talking about a tough environment overall.

Morgans' target remains at $5.20, alongside a Hold rating.

Target price is $5.20 Current Price is $5.24 Difference: minus $0.04 (current price is over target).
If EDV meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.87, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Ord Minnett rates EDV as Accumulate (2) -

After normalising 3Q numbers for the Easter boost, Ord Minnett notes sales growth of only 1% (half the headline figure), which aligns with the broker's FY24 forecast.

However, wage growth, tax cuts and potential interest rate cuts may combine to lift consumer demand for discretionary items in FY25, suggests the analyst. The broker's long-term average sales growth forecast is unchanged at 4% per year.

The Accumulate rating and $6.10 target are unchanged.

Target price is $6.10 Current Price is $5.24 Difference: $0.86
If EDV meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $5.87, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

UBS rates EDV as Buy (1) -

Endeavour Group's market update revealed weaker-than-expected retail sales while the Hotels business performed in line, reports UBS. FY24 guidance regarding net interest costs and capex has been reiterated.

Given the performance was stronger than Coles Liquor ((COL)), the broker highlights market share was won. The performance from Hotels showed improvement in the last six weeks of Q3.

The Buy rating and target price of $6.00 are retained, despite reduced forecasts.

Target price is $6.00 Current Price is $5.24 Difference: $0.76
If EDV meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.87, suggesting upside of 12.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Citi rates ELD as Buy (1) -

Citi expects progressive improvements for Elders in the 2H for both volume and pricing, and anticipates 1H results on May 20 will be accompanied by optimistic near-term outlook commentary. It's felt the 1H may represent the bottom of the current cycle.

The broker forecasts 1H FY24 EBIT of $42m, -4% below the consensus estimate for $44m, mainly due to a more cautious view on the 1Q performance within Rural Products and Agency Services.

The Buy rating and $8.50 target are maintained.

Target price is $8.50 Current Price is $8.23 Difference: $0.27
If ELD meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $8.81, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates GNC as Buy (1) -

GrainCorp offered preliminary guidance for 1H24 results which are due out on May 16, with net profit expected at $57m, ahead of Bell Potter's forecast at $51m.

Management guided to a downgrade in FY24 EBITDA to $250m-$280m from $270m-$310m, and net profit to $60m-$80m from $65m to $95m, versus Bell Potter's forecast of $81.2m.

Noting the larger downgrade in EBITDA guidance, the analyst surmises the difference reflects downward pressure on margins from interest holding costs, with oilseed crush margins weakening recently.

Earnings forecasts are adjusted for the guidance update, with the broker lowering net profit estimates by -18% for FY24 and -13% for FY25.

Unchanged Buy rating and the target trimmed to $9.20 from $9.30.

Target price is $9.20 Current Price is $8.11 Difference: $1.09
If GNC meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.65, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Macquarie rates GNC as Outperform (1) -

GrainCorp's FY24 guidance pointed to weaker margins on the back of increased supply in global wheat markets, raising the trading and marketing spend for the company.

Macquarie assesses the guidance downgrade was -14% below its forecast and some -11% below market consensus.

Looking to FY25, winter crop production is expected to benefit from higher than average soil moisture and a potential La Nina. Macquarie is forecasting 24.9mmt against a 10-year average of 21.7mmt.

Accounting for the guidance update, FY24 earnings are lowered by -26% on softer margins (lower grain volumes and prices) and -12% for FY25.

Outperform rating retained and the target is reduced to $9.02 from $9.26.

Target price is $9.02 Current Price is $8.11 Difference: $0.91
If GNC meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $8.65, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Ord Minnett rates GNC as Hold (3) -

GrainCorp will release full interim results on May 16, notes Ord Minnett, as grain production volumes continue to revert towards a normalised year.

In the meantime, management has provided preliminary results, expecting underlying earnings (EBITDA) of $164m. FY24 guidance is for earnings of between $250-280m.

The broker lowers its FY24 earnings forecast by -10%, which has an immaterial impact on valuation, while longer-term forecasts are maintained.

The Hold rating and $7.40 target are unchanged.

Target price is $7.40 Current Price is $8.11 Difference: minus $0.71 (current price is over target).
If GNC meets the Ord Minnett target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.65, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

UBS rates GNC as Buy (1) -

GrainCorp issued a profit warning, to the surprise of UBS analysts, as guidance had been updated not so long ago (and that was negative too).

Softer grain and oilseed export margins in April seem to have been responsible, together with mix impact from stronger crop volumes out of southern regions.

The broker believes the profit warning partly reflects the significant operating leverage that can make forecasting difficult. In prior years this worked in favour of upside surprises, this time around the pendulum has swung to the other side.

Balance sheet firepower is keeping the broker on Buy. Target $9.10 (was $8.80). Forecasts have reduced.

Target price is $9.10 Current Price is $8.11 Difference: $0.99
If GNC meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.65, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Bell Potter rates LTR as Speculative Buy (1) -

Bell Potter attended a 25 person investor visit to Liontown Resources at the Kathleen Valley lithium project last week.

Management highlighted the pathways to improving commissioning, the ramp up and lower operational risks, with first production forecast by mid-2024.

Around 160kt of ore is stockpiled with circa 300kt anticipated to be available by start up and the open pit mine is aiming for 3Mt of ore by the end of 2025.

The offtake agreements with Ford, KG Energy Solutions and Tesla are meaningful with Bell Potter forecasting the Ford debt to be repaid from future cash flow and a drawdown of the $550m debt package.

Spectulative Buy rating and $1.85 target unchanged.

Target price is $1.85 Current Price is $1.24 Difference: $0.61
If LTR meets the Bell Potter target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $1.34, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Citi rates LTR as Sell (5) -

Construction appears to be running smoothly at the Kathleen Valley project, reports Citi, following a site visit by the analyst. Delivery upon milestones outlined in 2021 is considered impressive.

The focus now swings to the June quarter opex update where the broker expects C1 (costs) to be higher, but all-in unit costs may be similar. First production is slated for mid-year. 

Sell rating retained wth an unchanged $1 target price.

Target price is $1.00 Current Price is $1.24 Difference: minus $0.24 (current price is over target).
If LTR meets the Citi target it will return approximately minus 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.34, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates LTR as Neutral (3) -

Liontown Resources' site visit to the Kathleen Vallet lithium project offered Macquarie insights into the ramp up of the operations.

Underground production at Byrecut is expected to come on stream in the September quarter (2024) with ore by the fourth quarter of 2024, and targeted production of 3Mtpa.

The commissioning of the processing plant seems to be on track for mid-2024.

Accounting for the updates, and the ramp up of Kathleen Valley, Macquarie lifts FY24 EPS by 4% and notes the share price is trading on an implied spodumeme price of US$1500/t, in line with the broker's long term forecasts, but not with current spot prices (US$1,240/t).

The target for Liontown Resources is $1.30. Neutral.

Target price is $1.30 Current Price is $1.24 Difference: $0.06
If LTR meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.34, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Morgans rates MME as Speculative Buy (1) -

Speculative Buy rating maintained as the broker has updated its modeling following the release of MoneyMe's Q3 trading update. The update itself has been described as "steady".

With the company now profitable, Morgans sees risks on the horizon, but then the shares are trading at a sizable discount.

With softening consumer demand and interest rate pressures identified as short-term risks, Morgans advocates this one is for more risk-tolerant investors only.

Target 23c (unchanged).

Target price is $0.23 Current Price is $0.07 Difference: $0.163
If MME meets the Morgans target it will return approximately 243% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates MP1 as Buy (1) -

Following Megaport's softer-than-expected 3Q trading update, Citi believes its investment thesis remains intact albeit the turnaround is taking longer-than-expected.

An increased focus on Enterprise customers (which typically have longer lead times), could be one reason for the delayed turnaround, suggests Citi.

The broker lowers its FY25 earnings (EBITDA) forecast by -6% as leading metrics in the quarter such as customers and ports fell short of forecasts.

Management's optimism is based on pipeline development, and potentially proof-of-concepts and trials that are no longer included in the reported KPIs, explain the analysts.

Buy. The target falls to $16.05 from $16.80. 

Target price is $16.05 Current Price is $13.90 Difference: $2.15
If MP1 meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $15.03, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates MQG as Sell (5) -

Citi lifts its target for Macquarie Group to $176 from $161 after raising long-term return assumptions in the wake of last week's FY24 result, despite minor earnings downgrades for FY25 and FY26.

The analysts' Sell rating remains given a positive outcome is still required for asset realisations to meet expectations that earnings will rebound from a trough in FY24.

Yesterday's summary of the broker's research pertaining to the result is as follows:

Slightly weaker revenue and higher tax have translated into Macquarie Group's financial performance slightly missing the broker's forecasts. FY24 dividend was slightly better at 640cps.

Compositionally, the result was arguably lower quality, finds the broker. MAM, BFS and CGM net profit contributions were -4-5% below consensus, offset by better earnings in MacCap and a lower corporate charge (lower bonus pool).

The analysts think management's outlook commentary implies downgrades to FY25 expectations, also because of a more muted recovery in green investments.

Target price is $176.00 Current Price is $186.51 Difference: minus $10.51 (current price is over target).
If MQG 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 $193.08, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Morgans rates MQG as Hold (3) -

Morgans believes Macquarie Group's FY24 was a "solid" outcome in a year that saw multiple guidance downgrades from management.

The outlook for FY25 is one of recovery, but this already seems to be priced into the share price, the broker comments.

Earnings estimates have been lowered -5%-6%, while the new target... new target... might be either $190, $189, or $189.40. Today's report mentions all of them!

We'll just stick with $189.40, unchanged from February. Hold.

Target price is $189.40 Current Price is $186.51 Difference: $2.89
If MQG meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $193.08, suggesting upside of 1.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Morgan Stanley rates PFP as Overweight (1) -

In alignment with management's long-term aim to help consolidate the A&NZ funeral industry, explains Morgan Stanley, Propel Funeral Partners is spending around -$12m to acquire three funeral homes - one in New Zealand and two in Australia.

The transactions are due to complete around June 30, notes the broker, and management expects they will be EPS accretive in the first year of ownership.

The broker's Overweight rating and target price of $6.10 are retained. Industry view: In-Line.

Target price is $6.10 Current Price is $5.48 Difference: $0.62
If PFP meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $6.19, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Ord Minnett rates PXA as Accumulate (2) -

Pexa Group's platform can reduce the remortgaging process in the UK to days from months, notes Ord Minnett. As a result, management is progressing a partnership with UK bank NatWest to deliver 48-hour remortgage transactions.

While this partnership is a good sign, the broker would like to see wider adoption in the UK (including Pexa's sale and purchase solutions) to establish greater network effects.

Ord Minnett ascribes a 25% chance of success for Pexa Group in the UK where market share is harder to build compared to Australia. Currently, the broker has a $1.75/share valuation for the international business.

The Accumulate rating and $17.25 target are unchanged.

Target price is $17.25 Current Price is $13.68 Difference: $3.57
If PXA meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $14.58, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates QAN as Hold (3) -

In what appears to be a win for Qantas Airways, suggests Ord Minnett, the company will pay a penalty of -$100m, and a further -$20m in compensation to consumers. This follows settlement with the ACCC for advertising and selling tickets for flights intended to be canceled.

The broker was expecting penalties of around -$250m. The difference is immaterial to the analyst's unchanged $6.10 target. The Hold rating is maintained.

Target price is $6.10 Current Price is $5.90 Difference: $0.2
If QAN meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.68, suggesting upside of 8.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates QBE as Buy (1) -

Citi believes QBE Insurance is on track to achieve (and likely beat) FY24 combined operating ratio (COR) guidance when 1Q results are released on May 10. Investment yields are also expected to be supportive.

The broker raises its target to $19.50 from $18 and retains the Buy recommendation.

The analysts expect earned premium to be tracking ahead of written, though this may not be expressly disclosed on May 10.

Target price is $19.50 Current Price is $17.19 Difference: $2.31
If QBE meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $18.21, suggesting upside of 5.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Citi rates RRL as Sell (5) -

Citi raises its target for Regis Resources to $1.70 from $1.30 after an increase in the broker's gold price forecasts, and following management's approval for development of two undergound mines.

Garden Well Main is expected to mine 900ktpa producing 60-70kozpa, while Rosemont Stage 3 will be mining 600ktpa producing 40-60kozpa, note the analysts. Production is expected to reach circa 100-120kozpa from FY27.

The Sell rating is maintained on valuation.

Target price is $1.70 Current Price is $2.08 Difference: minus $0.38 (current price is over target).
If RRL meets the Citi target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.23, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Morgan Stanley rates RRL as Overweight (1) -

Regis Resources has approved a new underground mining area (Garden Well Main) and an underground extension to Rosemont Stage 3.

Both projects, which are yet to be included in Morgan Stanley's base case valuation, are net present value (NPV) positive, with costs (AISC) far below the current spot gold price.

The Overweight rating and $2.45 target are unchanged. Industry view is Attractive.

Target price is $2.45 Current Price is $2.08 Difference: $0.37
If RRL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $2.23, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates SGM as Buy (1) -

FY24 market forecasts for Sims now need to move sharply lower, is Citi's initial view, after management today confirmed underlying EBIT in the 2H will be marginally lower than the 1H of FY24.

The disappointing outcome was expected by the broker given recent reporting by US peers.

The broker attributes these lower earnings expectations to SA Recycling in the US, where 2H FY24 earnings are expected to be down on 1H FY24. SA Recycling experienced a deterioration in ferrous intake volumes and margins through March and April.

In A&NZ, lower domestic demand for scrap metal, coupled with challenging export scrap metal markets influenced by China steel exports, has resulted in reduced demand and prices for scrap, explains Citi.

Management is now forecasting a lower 2H for A&NZ compared to the the 1H.

Target price is $13.50 Current Price is $11.81 Difference: $1.69
If SGM meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $14.00, suggesting upside of 26.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates SPK as Hold (3) -

Ord Minnett retains its $4.50 target for Spark New Zealand, despite an (immaterial) -4% downgrade to FY24 guidance for earnings and investment income (EBITDAI). The broker notes minimal drag from the company's core mobile service.

However, the analyst highlights an abrupt fall in demand for IT products and services, which is hampering the company's defensive appeal, and raising doubts about investments in other growth areas.

More positively, the declining IT demand is not structural, in Ord Minnett's opinion.

The Hold rating and target price of $4.50 are retained.

Target price is $4.50 Current Price is $4.07 Difference: $0.43
If SPK meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $4.50, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Shaw and Partners rates SPZ as Buy (1) -

The British Parking Association and the International Parking Community have announced a private parking sector single Code of Practice. Shaw and Partners believes Smart Parking generally complies with the new code or requires minimal cost/capex to implement.

Uncertainty remains with regard a potential change in UK government. The current government may yet put forward another populist parking code to win votes but it would likely be more industry-friendly than its previous attempt, Shaw suggests.

The Labour Party has given no indication that private parking is a political priority.

Buy and 70c target retained.

Target price is $0.70 Current Price is $0.49 Difference: $0.21
If SPZ meets the Shaw and Partners target it will return approximately 43% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Shaw and Partners rates SXE as Buy (1) -

Southern Cross Electrical Engineering has been awarded a $160m battery storage contract -- its largest ever win -- and has provided strong guidance for FY25, Shaw and Partners notes.

In line with the WA government’s decarbonisation strategy to be delivered by 2030, the Collie battery supports the replacement of coal-fired power generation with renewable energy generation and storage.

More efficient electrification is required to help Australia reach its net-zero target by 2050, and data centres are experiencing exponential growth, Shaw notes. Around 67% of a data centre construction costs relate to electrical systems.

Southern Cross Electrical Engineering services both these sectors. Target rises to $1.70 from $1.50, Buy retained.

Target price is $1.70 Current Price is $1.48 Difference: $0.22
If SXE meets the Shaw and Partners target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates TCL as Buy (1) -

There was not much new information at Transurban Group's investor day, according to Citi. It's felt investors need more evidence of emerging growth potential before becoming more bullish on the stock.

One positive for the analysts: cost growth is now expected to be at the lower end of the previously guided 4-6% range.

The broker sees some potential upside for dividends though no update was provided for FY24 dividend guidance.

The Buy rating. Target $15.50.

Target price is $15.50 Current Price is $12.51 Difference: $2.99
If TCL meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $13.62, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

Morgan Stanley came away from yesterday's investor day noting management at Transurban Group is working on a modest restructure to restore operating leverage.

The analysts point out the company's share price has underperformed, falling by -9% in 2024 compared to the flat outcome for the ASX200 Industrials.

Rising bond yields, along with a "mixed" traffic performance, and investor concerns over the NSW toll review are some reasons suggested by the broker for the lagging share price.

The broker's target falls to $13.06 $13.68. Equal Weight. Industry View: Cautious.

Target price is $13.06 Current Price is $12.51 Difference: $0.55
If TCL meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $13.62, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

Tourism Holdings Rentals issued a nasty profit warning and the share price got pummeled in response. Morgans has lowered its rating to Hold from Add.

The broker believes the difficult 4Q trading conditions are likely to continue into FY25 and lead to a very weak 1H25 result. 

Tourism Holdings Rentals has significant leverage to improved economic conditions, the broker highlights, but for now the market won't be in a mood to give management the benefit of the doubt.

The broker's price target has fallen to $1.94 from $4.70.

Target price is $1.94 Current Price is $1.65 Difference: $0.29
If THL meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Ord Minnett rates THL as Buy (1) -

Ord Minnett lowers its target for Tourism Holdings Rentals to NZ$3.13 from NZ$5.34 following management's new FY24 guidance for profit of between NZ$50-53m, down from NZ$75m previously.

Weakness in demand and pricing for used recreation vehicles (RVs) in the A&NZ markets was behind the downgrade, which are cyclical (not structural) factors, explains the broker.

Based on the broker's grasp of history, conditions will normalise. Management also stated no covenants are expected to be breached during FY24 and beyond. The Buy rating is retained.

Current Price is $1.65. Target price not assessed.

Current consensus price target is $1.94, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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 WBC as Sell (5) -

Following a further review of yesterday's 1H result for Westpac, Citi retains its Sell rating on valuation but raises the target to $24.75 from $22.25. Despite the rating, it's felt Westpac could have peer-leading core earnings and capital management trends.

The core net interest margin (NIM) -excluding volatile items- has been stable for six months and well ahead of peers, notes the analyst. It's felt lending growth is on a structural growth path in the attractive mortgage and SME segment as time-to-decision has been slashed.

The investment spend of -$736m was materially below management’s guidance of -$1.8bn for the year, suggesting to the broker a lull between the CORE program concluding and the Unite program ramping-up.

A summary of the analysts initial view of the result follows:

Judging from Citi's initial response, Westpac's interim result beat the broker's forecast by 0.5%, with bad and doubtful debts slightly better-than-anticipated.

Core earnings equally surprised slightly, on better cost control, but were in line with market consensus, on the broker's assessment.

Investment spend is materially below what management had indicated earlier, so a big catch-up needs to happen in H2, highlight the analysts.

Core NIM should be well-received, says the broker, as it looks better than peers. Westpac has announced an extension of the share buyback by $1bn, a dividend of 75c plus a special divvie of 15c on top.

Target price is $24.75 Current Price is $27.12 Difference: minus $2.37 (current price is over target).
If WBC meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.22, suggesting downside of -9.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.7

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

Macquarie rates WBC as Underperform (5) -

Noting the 30% run up in the Westpac share price since September, Macquarie retains a sanguine take on the 1H24 results, which were in line with expectations, if not slightly better than consensus.

Margins beat the market expectations as a structuring of hedges boosted margins. Heading into FY25 and FY26, the portfolio restructuring benefits are anticipated to abate.

Macquarie considers the capital distribution via a special dividend to use excess franking credits and surplus capital as reasonable, but rates the increased ordinary dividend as stretching the already high payout ratio.

The analyst expects the sustainable dividend yield on Westpac to contract to around 4% from circa 5.5%.

Earnings forecasts are retained for FY24, and lifted 1% for FY25, including an expected lift in investment spending over the next 18-months.

The Underperform rating and target price of $26.00 are retained.

Target price is $26.00 Current Price is $27.12 Difference: minus $1.12 (current price is over target).
If WBC meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.22, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.7

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

Morgan Stanley rates WBC as Underweight (5) -

While already reflected in the share price, Morgan Stanley sees a better franchise performance for Westpac based on operating trends and capital management initiatives. Profit ex notable items was in line with the broker's forecast but the exit margin was encouraging.

A 15cps special dividend was declared, and the broker anticipates further special dividends of 30cps and additional buybacks of circa $3bn by the end of FY26.

While key 1H metrics were broadly in line with consensus forecasts, Westpac's share price responded positively to both capital management and generally positive commentary on margin trends and volume growth, explain the analysts.

The broker's Underweight rating is retained and the target is increased to $24.40 from $23 due to better margins and larger buybacks. Industry View: In-Line.

Target price is $24.40 Current Price is $27.12 Difference: minus $2.72 (current price is over target).
If WBC meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.22, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.7

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

Morgans rates WBC as Hold (3) -

Westpac's 1H performance slightly beat market consensus, while slightly missing Morgans' estimate. Forecasts have been slightly reduced, but capital management was the stand-out positive from the result, the analysts argue.

In response to the latter, the broker has lifted its target price by 5% to $24.15. Hold rating retained.

On revised forecasts, Westpac could potentially spend another $5bn of excess capital over FY25-26 on buybacks and special DPS before its CET1 capital ratio reaches the top end of its operating target range of 11-11.5%, the analyst points out.

Target price is $24.15 Current Price is $27.12 Difference: minus $2.97 (current price is over target).
If WBC meets the Morgans target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.22, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.7

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

Ord Minnett rates WBC as Hold (3) -

Westpac's 1H result supports Ord Minnett's view net interest margin (NIM) pressure is moderating with some home lending rates raised and less aggressive discounting of existing loans.

The adjusted NIM was flat on the 2H of FY23. Ord Minnett expects a similar outcome in the 2H and modest improvement over the medium-term.

Cash profit of $3.5bn was largely as the broker forecast. The bank is finally demonstrating it can compete effectively across all key segments, in the analyst's view. Home and business loans as well as deposits are being raised in line or faster than the overall market.

Management increased the existing buyback by $1bn and declared a fully franked special dividend of 15cps.

The Hold rating and $28 target are maintained for Westpac.

Target price is $28.00 Current Price is $27.12 Difference: $0.88
If WBC meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $25.22, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.7

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

UBS rates WBC as Sell (5) -

Westpac reported interim results in line with expectations, comments UBS. Net interest margin expansion and further delays to the credit cycle have forced EPS forecast upgrades by 4%-5%.

In a first look at the release yesterday, UBS noted the 15cps special dividend and the updated buyback (increased by $1bn) are positives.

A profit of $3.34bn compares to forecasts by the broker and consensus for $3.37bn and $3.28bn, respectively. An Interim dividend of 75cps (fully franked) was declared. The net interest margin (NIM) fell by -7bps half-on-half to 1.89% (consensus 1.88%).

The broker highlighted the Business & Wealth division supported a stronger half-on-half result, while overall cost growth was in line with the consensus forecast.

More negatively, there was a greater deterioration in asset quality than the analysts expected and lower overall provision coverage.

Sell rating. Target $24 (up $1).

Target price is $24.00 Current Price is $27.12 Difference: minus $3.12 (current price is over target).
If WBC meets the UBS target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $25.22, suggesting downside of -9.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.7

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