Australian Broker Call

Macquarie rates ALQ as Outperform (1) -

ALS Ltd posted a net profit result in FY23 that was ahead of Macquarie's expectations. Commodities were the highlight and value-added services were a new point of emphasis, amid increasing demand for data and analytics.

Life sciences were disappointing and largely because of Nuvisan breaking even rather than the $9m in EBIT the broker was anticipating. The core environmental business performed well and Macquarie retains an Outperform rating with a $13.60 target.

Target price is $13.60 Current Price is $11.75 Difference: $1.85
If ALQ meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.96, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in March.

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 ALQ as Add (1) -

FY23 underlying profit for ALS Ltd came in at the upper-end of management guidance and in line with the consensus forecast. Morgans notes Commodities outperformed (once again), while some parts of Life Sciences were soft.

Due to looming macro uncertainty and lower Geochem volumes, the broker adopts a more cautious stance and lowers its target to $13.75 from $14.40.

The Add rating is maintained given the company's undemanding valuation and discount to offshore testing, inspection, certification (TIC) peers.

Target price is $13.75 Current Price is $11.75 Difference: $2
If ALQ meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $11.96, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in March.

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

UBS rates ALQ as Neutral (3) -

FY23 underlying net profit was ahead of UBS estimates. The commodities margin was higher than expected while the life sciences margin was weaker than expected.

The broker lowers FY24-25 estimates by -5% because of a moderating outlook for geochemistry volumes and a weaker performance from Nuvisan.

The recently-acquired 49% stake in Nuvisan has been adversely affected by a challenging euro macro backdrop. Neutral maintained. Target is reduced to $12.10 from $12.70.

Target price is $12.10 Current Price is $11.75 Difference: $0.35
If ALQ meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $11.96, suggesting upside of 2.7% (ex-dividends)

The company's fiscal year ends in March.

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 ARB as Initiation of coverage with Hold (3) -

Morgans initiates coverage on category leader ARB Corp with a $29.05 target price. The company has three divisions: Aftermarket (domestic sales via stores or distribution); Export; and OEM (sales of specialised products to vehicle manufacturers).

The broker likes structural industry tailwinds which include growing car parc (all registered vehicles) and shifting consumer preferences toward SUVs/4x4s as well as its growth strategy (new US store rollout).

The analysts begin with a Hold rating as a more challenging demand environment awaits and due to limited improvements for new car supply. Additionally, there has been some ongoing disruption for the company's US distribution.

Target price is $29.05 Current Price is $28.68 Difference: $0.37
If ARB meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $31.64, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates AUB as Resume Coverage with Outperform (1) -

Macquarie resumes coverage of AUB Group with a $29.78 target and Outperform rating. At the time of its capital raising the company upgraded FY23 net profit guidance to $120-124m.

The $165m capital raising was associated with strengthening the balance sheet and retaining Tysers Retail, which is performing ahead of expectations.

Cost synergies are on track and the company expects to achieve -$15m of synergies on a run-rate basis by the end of the year. Macquarie makes no changes to forecasts.

Target price is $29.78 Current Price is $25.50 Difference: $4.28
If AUB meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $29.59, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Shaw and Partners rates BML as Buy (1) -

Shaw and Partners expects Boab Metals will publish news of its offtake agreements (with the possibility of output being fully sold) in June for its Sorby Hills lead-silver project in Western Australia ahead of financing details and a Final Investment Decision.

Shaw and Partners says it is a common misconception that lead demand wanes as demand for lithium-ion batteries rises and that its toxicity in industrial applications will prove problematic as environmental concerns gain favour.

Rather, demand has grown and the metal should continue to find support, given most electrical vehicles include a lead-acid battery to power critical functions. The broker adds that demand forecasts are not supported by supply

The broker also observes solar power demand for silver in panels has created a supply deficit in that market.

Buy rating retained. Target price falls to 52c from 75c, after assuming an equity raising of $75m plus $110m in debt.

Target price is $0.52 Current Price is $0.19 Difference: $0.33
If BML meets the Shaw and Partners target it will return approximately 174% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Bell Potter rates CAT as Buy (1) -

In a further review of the FY23 result, Bell Potter emphasises the wearables segment continues to grow strongly with video lagging.

Yet this could be about to change with the development of an advanced video analysis called MatchTracker, which appears to be well ahead of the competition and, importantly, can access data from third-party video providers.

The broker believes this product will help return tactics & coaching to double-digit percentage growth in FY24. Buy rating maintained. Target is raised to $1.20 from $1.00.

Target price is $1.20 Current Price is $1.01 Difference: $0.19
If CAT meets the Bell Potter target it will return approximately 19% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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

Macquarie rates CRN as Outperform (1) -

On a visit to the Curragh coal mine, Macquarie notes stripping and development has now caught up after weather-related delays. Coronado Global Resources has targeted growth to 13.5mtpa in saleable coal production by 2025. First underground coal is targeted for late 2024.

Macquarie also highlights the fact BHP Group ((BHP)) has recently announced a sales process for Daunia and Blackwater mines, while Coronado Global Resources has flagged the dividend is suppressed in order to shore up the balance sheet as it looks at M&A.

Outperform rating retained. Target is $2.40.

Target price is $2.40 Current Price is $1.37 Difference: $1.03
If CRN meets the Macquarie target it will return approximately 75% (excluding dividends, fees and charges).

Current consensus price target is $2.11, suggesting upside of 55.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.8

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

Morgan Stanley rates CSL as Overweight (1) -

Morgan Stanley reports its proprietary Plasma Collection Centre Data for April show CSL's US and EU centres experienced 4% year-on-year growth.

During recent results, competitors Takeda guided to 10-20% plasma collection growth for FY23, while Grifols released quarterly results showing plasma collections growth of 11%.

The Overweight rating and $339 target for CSL are unchanged. Industry View: In-Line.

Target price is $339.00 Current Price is $308.11 Difference: $30.89
If CSL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $335.99, suggesting upside of 9.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.8

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

Macquarie rates EBO as Outperform (1) -

Macquarie reviews the most recent Medicare surgical volume data, noting spinal volumes moved higher in April along with orthopaedic. General procedures per working day remain flat month on month.

Neurosurgical remains a dominant segment post the pandemic. The broker awaits Australasian flu and RSP data to assess the potential impacts on community pharmacy and institutional healthcare businesses.

Outperform. Target is NZ$47.93. 

Current Price is $39.25. Target price not assessed.

Current consensus price target is $38.04, suggesting downside of -1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Morgan Stanley rates IEL as Overweight (1) -

Morgan Stanley lowers its FY24/25 IELTS volume growth forecasts in response to yesterday's announcement of increased competition in the space in Canada. The target falls to $32.10 from $36.80.

Previously the sole domain of IELTS in Canada, the Immigration, Refugees and Citizenship Canada (IRCC) has approved additional English language test providers for the Student Direct Stream (SDS) visa program starting August 10.

The broker's lower volume forecasts assume IELTS loses around -30% of volumes attributable to Canada SDS.

An Overweight rating is kept partly due to student placement operating leverage, upside from digital investment and ongoing exposure to structural growth. Industry View: In-Line.

Target price is $32.10 Current Price is $21.71 Difference: $10.39
If IEL meets the Morgan Stanley target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $29.43, suggesting upside of 32.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Morgans rates IEL as Hold (3) -

Three additional English proficiency tests, additional to IDP Education's IELTs test, have been approved by the Canadian Government for the Student Direct Stream visa class from this August.

When this change is combined with February's 'economic' visa class changes, the broker highlights around 45% of IDP Education's test volumes in Canada are now open to competition from the 1H of FY24.

Morgans lowers its FY24 EPS forecast by -8.7% after also taking into account recent signs of capacity pressures in major markets e.g Indian visa numbers to Canada.

The target falls to $27.70 from $31.65. The Hold rating is retained, with the broker still expecting the competitive position of the company's two divisions will improve in the medium-term.

Target price is $27.70 Current Price is $21.71 Difference: $5.99
If IEL meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $29.43, suggesting upside of 32.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates IEL as Buy (1) -

From August, Canada will start accepting four new English tests, along with IELTS, for study visas, allowing competitors to enter the student-direct-stream component, which marks the final stage of opening up the Canadian market to competitors.

UBS notes, in the UK, opening the market to competitors resulted in a -10% share loss while the Australian onshore market loss was greater.

The broker adjusts estimated IELTS testing volumes to factor in Canadian headwinds, retaining a Buy rating and reducing the target to $30.25 from $33.45.

Target price is $30.25 Current Price is $21.71 Difference: $8.54
If IEL meets the UBS target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $29.43, suggesting upside of 32.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Shaw and Partners rates IGL as Buy (1) -

Shaw and Partners believes that the retreat in IVE Group's share price offers a good opportunity to enter the stock, noting it has fallen 20% from its interim-result-induced highs.

The broker appreciates the company's monopoly position in the IGL domestic LFWO work market following the acquisition of OVT, which is likely to further boost earnings (return on equity exceeding 20% once fully consolidated); and upgraded guidance (at the result).

Meanwhile, Shaw and Partners observes the company has emerged from covid with a stronger balance sheet and margins, and an improved industry structure.

Conviction Buy and $3.47 target price retained.

Target price is $3.47 Current Price is $2.20 Difference: $1.27
If IGL meets the Shaw and Partners target it will return approximately 58% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates IMD as Buy (1) -

Citi references yesterday's FY23 result for ALS Ltd ((ALQ)) in noting declines in Geochemistry sample volumes between October 2022 and March 2023, which backs-up subdued volume growth flagged by Imdex earlier this month.

To help offset this negative, the broker notes recent feedback from industry participants suggesting a potential strong rebound in the September quarter.

The Buy rating and $3.00 target are retained.

Target price is $3.00 Current Price is $1.81 Difference: $1.195
If IMD meets the Citi target it will return approximately 66% (excluding dividends, fees and charges).

Current consensus price target is $2.85, suggesting upside of 57.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates LLL as Outperform (1) -

Leo Lithium has completed a $106m strategic placement with Gangfeng Lithium at a 6.5% premium to the prior closing price. Macquarie highlights a strategic agreement has also been made to include a lithium exploration joint venture in Australia.

In addition, the two have agreed to accelerate study on the potential stage 2 expansion of Goulamina which could double spodumene production capacity to1mtpa. Macquarie already incorporates this expansion in its base case.

An upgrade to the reserve estimate for Goulamina is likely in the third quarter of 2023 and depending on this, the company has indicated a stage 3 expansion will be assessed. Outperform rating maintained. Target rises to $1.55 from $1.50.

Target price is $1.55 Current Price is $0.85 Difference: $0.7
If LLL meets the Macquarie target it will return approximately 82% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates MVF as Outperform (1) -

Macquarie expects completion of the PIVET acquisition, which adds 8 fertility specialists, will drive further share gains in the second half and into FY24. The broker notes Medicare data have shown in the second half to date fresh cycles were up 1.3%.

Macquarie continues to envisage structural tailwinds the IVF industry amid an increasing average maternal age and improved awareness, as well as additional funding becoming available.

The $1.30 target is unchanged and an Outperform rating is maintained.

Target price is $1.30 Current Price is $1.16 Difference: $0.145
If MVF meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.36, suggesting upside of 19.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Bell Potter rates SHV as Buy (1) -

The first half report from Select Harvests revealed an underlying EBITDA loss of -$55.6m, well outside forecasts.

Higher costs were the main driver of the weakness while the second half pre-tax reported profit is anticipated to be a small loss with the crop adjustments reflected in the first half.

The FY24 crop is expected to rebound with the benefit of lower fertiliser costs. Bell Potter assesses cost pressures have already demonstrated signs of peaking and a slowdown in global supply should lead to a firming almond price.

Buy rating retained. Target price is steady at $5.50.

Target price is $5.50 Current Price is $4.74 Difference: $0.76
If SHV meets the Bell Potter target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

UBS rates SHV as Buy (1) -

Select Harvests, having posted a large loss in the first half, should be facing a much better outlook for FY24, UBS asserts. Almond prices are trending up towards the US$8/kg long-run average amid expectations for moderating supply in California.

Yet the company's commentary surrounding cost inflation means the broker lifts growing costs for FY24 by 6% and this drives a -25% reduction in EPS estimates.

UBS is encouraged by the new CEO's initiatives and maintains a Buy rating, raising the target to $5.50 from $4.90.

Target price is $5.50 Current Price is $4.74 Difference: $0.76
If SHV meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Shaw and Partners rates SMP as Buy (1) -

SmartPay's FY23 results outpaced Shaw and Partners's forecasts by a decent clip, as strong revenue and earnings flowed pleasingly into cash flow.

Margins grew sharply to 24.3% in the March half from 22.9% in the September half, and the broker observes strong operating leverage as the business scales.

The company closed FY23 with $18.6m in the kitty, with free cash flow meeting forecasts.

The broker spies further opportunity in the company's soon-to-be-launched New Zealand business.

High conviction Buy rating retained. Target price rises to $2.35 from $2.20 per share.

Target price is $2.35 Current Price is $1.60 Difference: $0.75
If SMP meets the Shaw and Partners target it will return approximately 47% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

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: 1.0

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

Macquarie rates STX as Outperform (1) -

Macquarie envisages over 15% in upside for Strike Energy in its base case, believing confidence in the resource size will improve with drilling over 2023/24. The company expects to bring Walyering gas on stream in the next 2-3 weeks.

This is expected to ease some of the gas market tightness in Western Australia but, significantly, represents first production and cash flow... and, in the broker's view, also flags the potential corporate appeal in the stock.

Macquarie makes no changes to its $0.55 target and retains an Outperform rating.

Target price is $0.55 Current Price is $0.47 Difference: $0.08
If STX meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $0.53, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Morgans rates WGN as Upgrade to Speculative Buy from Hold (1) -

Morgans upgrades its rating for Wagners Holding Co to Speculative Buy from Hold and raises its target to 90c from 63c on an improving outlook through to FY24/25.

The broker believes recent price increases in SE QLD will hold due to a return of industry discipline. Management's increased focus on profitability and reduced capex plans are also expected to assist.

The main driver of the analyst's higher earnings forecasts is the outlook for the cement business. Rising cement volumes and prices are expected to drive margin expansion through the 2H of FY23 and FY24.

Target price is $0.90 Current Price is $0.76 Difference: $0.14
If WGN meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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