Australian Broker Call

Ord Minnett rates ABC as Hold (3) -

Looking forward to August results, Ord Minnett reviews earnings estimates and valuations for the building materials sector. Adbri has not provided guidance, which is expected to expose the company to a significant share price reaction either way on result day.

Ord Minnett retains its Hold rating and lifts its target price to $3.50 from $3.20.

Target price is $3.50 Current Price is $3.54 Difference: minus $0.04 (current price is over target).
If ABC meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.23, suggesting downside of -9.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.1

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

Citi rates ASB as Buy (1) -

The $800m LAND 8710 Phase 1 Australian defence tender is a major opportunity for Austal to fill its pipeline post its Cape Class and Guardian Class programs expected to be completed in FY24, the broker suggests. Austal is not however the only bidder.

But a consortium of Navantia and Rheinmetall has not been selected, which leaves only BMT as competition, unless there are others as yet unknown.

The broker estimates the market is only affording Austal a 3x forward PE for its shipbuilding business, which is a big discount to US peers. Buy and $3.35 target retained.

Target price is $3.35 Current Price is $2.16 Difference: $1.19
If ASB meets the Citi target it will return approximately 55% (excluding dividends, fees and charges).

Current consensus price target is $2.80, suggesting upside of 27.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.8

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

Ord Minnett rates BLD as Downgrade to Lighten from Hold (4) -

Ord Minnett has downgraded Boral to Lighten from Hold. The broker believes there is risk for a share price correction once the current deadline for the $7.40 per share offer beckons on 29 July.

Ord Minnett still is not a great believer in management's transformation program. More selling could follow if/when the stock loses more of its index weighting, seen as another potential risk.

Target price unchanged at $6.70.

Target price is $6.70 Current Price is $7.40 Difference: minus $0.7 (current price is over target).
If BLD 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 $6.66, suggesting downside of -10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.2

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

Morgan Stanley rates CPU as Overweight (1) -

Morgan Stanley sees downside risks to Computershare's FY22 guidance versus consensus expectations, given the final US mortgage foreclosure delay.

However, the broker remains Overweight on the company, due to upside optionality on US rates, strong corporate activity and 15% earnings per share accretion from the corporate trust acquisition.

Morgan Stanley expects Computershare to deliver a FY21 result modestly ahead of guidance, targeting earnings ex-margin income up 16%. Going into FY22 and with potential new guidance expected from the company, the broker targets 2.5% growth in both management profit and earnings ex-margin income, which places the broker at -3-4% below consensus.

Price target increases to $17.60 from $16.85. Industry view is In-Line.

Target price is $17.60 Current Price is $16.27 Difference: $1.33
If CPU meets the Morgan Stanley target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $18.01, suggesting upside of 12.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.3

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

Credit Suisse rates CRN as Outperform (1) -

Coronado Global Resources delivered a solid June quarter performance with 4.2Mt of saleable production and 4.5Mt of
sales, largely in line with Credit Suisse's expectations.

Although sales from the Curragh mine were impacted by a train derailment in June, resulting in substantial inventory buildup, the broker
views this a positive as it allows Curragh to benefit from stronger prices in the subsequent periods.

The broker remains positive on Coronado Global and notes there may be further upside from the US domestic contract prices (US$87/t for calendar year 2021), of which the next round of negotiations will start in the September quarter.

Post the June quarter results, the broker lifts the calendar year 2021 earnings forecasts by 25% with immaterial impacts less than 3% to outer years, and makes no change to the $1.60 price target.

Outperform rating maintained.

Target price is $1.60 Current Price is $1.00 Difference: $0.6
If CRN meets the Credit Suisse target it will return approximately 60% (excluding dividends, fees and charges).

Current consensus price target is $1.32, suggesting upside of 31.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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 Upgrade to Outperform from Neutral (1) -

Macquarie upgrades its rating to Outperform from Neutral and raises its target price to $1.20 from $0.80, after higher realised prices drove stronger second quarter revenue.

The broker explains a rally in coal prices has driven earnings upside momentum, with earnings forecasts more than doubling in a spot price scenario. 

Metallurgical coal realised pricing of US$105/t was above the analyst's expectations, as the Chinese premium paid for American coal continued and seaborne met coal prices from Australia recovered.

Target price is $1.20 Current Price is $1.00 Difference: $0.2
If CRN meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $1.32, suggesting upside of 31.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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 DTC as Equal-weight (3) -

Damstra Holdings reported $9.1m revenue in fourth quarter FY21 implying $16m for second half and $28.1m for FY21 versus guidance of $28.5-30.5m.

Morgan Stanley notes the $2m incremental annual recurring revenue (ARR) in fourth quarter FY21, mostly from Vault, puts ARR at $35m, and assuming a similar run rate is sustained through FY22 implies reaching $43m ARR - which makes the broker's revenue of $39.2m for FY22 seem realistic.

The broker believes organic growth from Damstra will have to do more of the heavy lifting, as opposed to the elevated growth Vault experienced in second half FY21.

Equal-weight rating with a target of $1.25. Industry view: In-line.

Target price is $1.25 Current Price is $0.97 Difference: $0.28
If DTC meets the Morgan Stanley target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Credit Suisse rates DXS as Outperform (1) -

Dexus has announced it will invest in Atlassian’s new Sydney Headquarters, with a forecast total project cost of $1.4bn. The company has also acquired a 49% stake in a trust that owns Capital Square Tower, 98 Mounts Bay Rd, Perth for $339m.

Assuming the Atlassian transaction proceeds, Credit Suisse estimates gearing increases to 30-31% on a pro-forma basis, all else being equal – although the broker notes that construction on this tower will not commence until calendar year 2022, with completion in FY26.

The broker has revised FY21-FY23 funds from operations per share by 0.8%, 1.2%, and 3.0% and continues to assume a 100% payout of adjusted funds from operations.

While the stock continues to trade at a discount to the last stated net tangible asset (NTA) valuation, Credit Suisse wonders if potential/known capital commitments will temper the company's willingness to pursue a share buy-back.

The broker does not assume any further buy-back in its estimates.

Outperform rating. Target rises to $10.84 from $10.82.

Target price is $10.84 Current Price is $10.41 Difference: $0.43
If DXS meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $10.62, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Macquarie rates DXS as Neutral (3) -

Macquarie assesses the acquisition of a 49% interest in Capital Square Tower 1 in Perth at a 5.1% asset yield is around 3% accretive to adjusted funds from operations (AFFO).

However, the broker feels balance sheet optionality is now more limited and headwinds persist in office markets. Macquarie retains its Neutral rating and $10.99 target price.

Target price is $10.99 Current Price is $10.41 Difference: $0.58
If DXS meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $10.62, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates DXS as Overweight (1) -

Dexus has purchased 49% of Capital Square 1, an office building in Perth, for $339m.

Morgan Stanley estimates this deal will add circa $13.8m, inclusive of interest from loan to co-owner, to the broker's FY22 funds from operations forecast of $718m.

The broker notes on pricing, the 5.1% yield is at the pointy end of the Perth market's yield of 5.0%- 7.5%, although the long weighted average lease expiry may justify this.

Overweight rating for Dexus, with a target of $11.75. Industry View: In-line.

Target price is $11.75 Current Price is $10.41 Difference: $1.34
If DXS meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $10.62, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Citi rates EVN as Neutral (3) -

Evolution Mining is raising $450m of new equity to acquire Northern Star Resources' ((NST)) Kundana asset. The broker has no doubt in the strategic sense of the deal.

Kundana is for Northern Star a small production, high cost asset, and it's a good price. It allows Evolution to build out the scale of its Mungari mill and extend mill life to 13 years, the broker estimates.

Northern Star can recycle the funds into more efficient projects rather than building its own mill at Kundana.

Neutral and $4.70 target retained for Evolution Mining.

Target price is $4.70 Current Price is $4.07 Difference: $0.63
If EVN meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.31, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Credit Suisse rates EVN as Upgrade to Outperform from Neutral (1) -

Evolution Mining has agreed to acquire Northern Star's ((NST)) Kundana assets for $400m and cites proximity to the company's existing Mungari mill as the primary rationale for the transaction.

Credit Suisse observes that the $400m transaction price implies $166/oz of Resource or $691/oz of Reserve.

The broker notes once the immediate synergies are considered, it becomes clear that $400m is an attractive price
from Evolution's perspective.

With the disappointing multi-year outlook now fully digested by the market, Credit Suisse moves back to an Outperform rating from Neutral.

The broker believes Evolution will successfully execute on its Red Lake/Cowal growth projects, and that this, overlaid with a positive gold price outlook, should drive positive returns to investors.

The broker's earnings per share estimates increase 10-13% following the acquisition.

Target price increases to $4.70 from $4.45.

Target price is $4.70 Current Price is $4.07 Difference: $0.63
If EVN meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.31, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Macquarie rates EVN as Underperform (5) -

Evolution Mining has entered into an agreement with Northern Star Resources ((NST)) to acquire the Kundana asset for -$400m cash. The assets are within 8kms of the Mungari mill with shorter haulage a key deal synergy, explains Macquarie.

The broker assesses the deal underpins an expansion of the Mungari mill, which should elevate production to 200koz per year at the mine and 1mt per annum across the group in FY25. Macquarie retains its Underperform rating and $4 target price.

Target price is $4.00 Current Price is $4.07 Difference: minus $0.07 (current price is over target).
If EVN 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 $4.31, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Morgan Stanley rates EVN as Underweight (5) -

Morgan Stanley believes the $400m Evolution Mining has agreed to pay to acquire underground mines from Northern Star ((NST)) is reasonable given the synergy benefits of using new high-grade mines to replace lower-grade feed at an existing mill.

The broker assesses 4-7% increases to the group's FY22-24 gold guidance and extends planned mine life to 13 years from 9.

Morgan Stanley sees potential for further value to be realised from a possible mill expansion to 4.2Mtpa, but the broker notes the investment could cause Evolution's gearing to rise.

While Synergies from the acquisition of Kalgoorlie mines from Northern Star add $270m of value to Evolution, Morgan Stanley still finds limited value in the stock at 11.3x the broker's FY22 EV/EBITDA estimate, above its three-year average of 7.5x.

Underweight rating and target of $4.00 are both maintained. Industry view: Attractive.

Target price is $4.00 Current Price is $4.07 Difference: minus $0.07 (current price is over target).
If EVN meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.31, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Morgan Stanley rates EVN as Underweight (5) -

Morgan Stanley believes the $400m Evolution Mining has agreed to pay to acquire underground mines from Northern Star ((NST)) is reasonable given the synergy benefits of using new high-grade mines to replace lower-grade feed at an existing mill.

The broker assesses 4-7% increases to the group's FY22-24 gold guidance and extends planned mine life to 13 years from 9.

While Morgan Stanley sees potential for further value to be realised from a possible mill expansion to 4.2Mtpa, the broker notes the investment could cause Evolution's gearing to rise.

Underweight rating and target of $4.00 are both maintained. Industry view: Attractive.

Target price is $4.00 Current Price is $4.07 Difference: minus $0.07 (current price is over target).
If EVN meets the Morgan Stanley target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.31, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: -0.3

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

Macquarie rates GXY as Outperform (1) -

Second quarter results revealed Mt Cattlin had higher production and lower costs versus Macquarie's estimates. A material beat (28%) in cash costs was largely due to lower material movements, which were -38% below the analyst's estimates.

While costs are expected to rise in the second half, the broker believes the project looks on-track to beat its production and cost guidance ranges.

Completion of the merger with Orocobre ((ORE)) is expected to occur on 25 August and presents a key catalyst for the company, believes the analyst. Macquarie maintains its Outperform rating and lifts its target price by 4% to $4.90.

Target price is $4.90 Current Price is $4.38 Difference: $0.52
If GXY meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Morgan Stanley rates GXY as Underweight (5) -

Benefitting from higher grades, Galaxy Resources reported strong June quarter production with spodumene produced 23%
above Morgan Stanley estimates.

While Morgan Stanley has increased cost estimates in calendar year 2022 and calendar year 2023, this is offset by the broker's updated higher spodumene price expectation in CY22, which leads to a rise in earnings per share.

While the price target moves to $3.30 from $2.80, the broker notes short mine life at Mt Cattlin, and risks around construction at
SDV and the development of James Bay are key concerns.

Underweight rating retained. Industry view: Attractive.

Target price is $3.30 Current Price is $4.38 Difference: minus $1.08 (current price is over target).
If GXY meets the Morgan Stanley target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.05, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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 GXY as Buy (1) -

Ord Minnett doesn't expect any major hurdles ahead of the merger with  Orocobre ((ORE)), with a scheme meeting and court date in August ahead of implementation on 25 August.

The analyst remains attracted to the merged entity, with its solid growth pipeline and optimisation options, as well as a strong lithium market outlook.

Separately, June quarter production results were largely in-line though second-half costs at Mt Cattlin will rise due to higher strip ratios, explains the broker. Ord Minnett maintains its Buy rating and price target of $4.80.

Target price is $4.80 Current Price is $4.38 Difference: $0.42
If GXY meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $4.05, suggesting downside of -7.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: 0.3

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

Macquarie rates IGO as Outperform (1) -

The Macquarie commodities team expects the nickel market to move into deficit, as a result of strong stainless steel demand, combined with a weaker supply response. 

Upgrades of 3-12% to quarterly nickel price forecasts by the broker over the next 18 months, translates to 4% and 8% upgrades to Macquarie’s 2021 and 2022 nickel price forecasts.

The analyst lifts IGO's earnings by 3-13% in FY22 and FY23 and the broker's target price rises to $9.60 from $9.50. The Outperform rating is unchanged.

Target price is $9.60 Current Price is $8.74 Difference: $0.86
If IGO meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $8.02, suggesting downside of -9.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.2

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

Citi rates ILU as Neutral (3) -

Suspension of mining at Rio Tinto's ((RIO)) Richards Bay Minerals operation in South Africa has pushed up mineral sands prices just as demand is recovering. Depending on how RBM plays out, the broker suggests prices could tighten much further.

The broker has lifted its 2021 price forecasts by 5% and Iluka Resources' production by 13%, driving a 60% increase in forecast earnings. However the broker is assuming a relatively swift resolution at RBM.

On that basis, and Iluka's share price run, the broker retains Neutral. Target rises to $9.10 from $8.15.

Target price is $9.10 Current Price is $9.33 Difference: minus $0.23 (current price is over target).
If ILU meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.76, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Credit Suisse rates ILU as Underperform (5) -

On the back of a strong quarterly report, including price increases, and rising supply threats for RBM and Sierra Rutile, plus the tightening in the mineral sands outlook, Credit Suisse has increased the price target on Iluka Resources to $7.00 from $5.30.

The broker raises earnings by 40-50% from FY21-23 due to revised mineral sands price forecasts.

However, Credit Suisse's valuation failed to catch up with the share price, which the broker believes reflects aggressive REO refinery hopes.

The Underperform rating is maintained.

Target price is $7.00 Current Price is $9.33 Difference: minus $2.33 (current price is over target).
If ILU meets the Credit Suisse target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.76, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Macquarie rates ILU as Outperform (1) -

Macquarie assesses a strong second quarter result, with sales volumes 25% higher than expected, boosted by zircon and synthetic rutile. Management also outlined a bullish outlook for both zircon and titanium dioxide feedstock markets.

The broker lifts zircon and rutile price forecasts by 4-7% and 8-17%, respectively, over the 2022-2025 period, to reflect the impact of  expected supply shortages.

Macquarie's price target rises to $10.50 from $8.70 and its Outperform rating is maintained. Suspension of mining at Rio Tinto's ((RIO)) Richards Bay Minerals operation in South Africa also pushed up the analyst's expected rutile prices.

Target price is $10.50 Current Price is $9.33 Difference: $1.17
If ILU meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $8.76, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

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

In line with Morgan Stanley's upwardly revised mineral sands price forecast, the broker increases the price target on Iluka Resources to $8.20 from $6.00.

While Morgan Stanley thinks the strength in the mineral sands market is well understood, the broker believes Iluka 's ability to supply volumes is a key risk.

Given the company's limited ability to deliver on volumes, especially rutile, Morgan Stanley's Equal-weight rating is maintained.

Industry view: Attractive.

Target price is $8.20 Current Price is $9.33 Difference: minus $1.13 (current price is over target).
If ILU meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.76, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

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

In line with Morgan Stanley's upwardly revised mineral sands price forecast, the broker increases the price target on Iluka Resources to $8.20 from $6.00.

While Morgan Stanley thinks the strength in the mineral sands market is well understood, the broker believes Iluka 's ability to supply volumes is a key risk.

The broker notes, with rutile stocks drawn, there are limited quantities to supply in a second-half higher price environment.

Given the company's limited ability to deliver on volumes, especially rutile, Morgan Stanley's Equal-weight rating is maintained.

Industry view: Attractive.

Target price is $8.20 Current Price is $9.33 Difference: minus $1.13 (current price is over target).
If ILU meets the Morgan Stanley target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.76, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates ILU as Hold (3) -

Ord Minnett increases its target price for Iluka Resources to $9 from $8.10, on the back of higher pricing, with the mineral sands market
outlook strong. Further detail on the project pipeline is awaited for additional valuation support and the Hold rating is unchanged.

The broker highlights strong rutile production more than offset lower zircon production, and sales across the board were 14%-plus higher than forecast, with significant inventory sold. Revenues were in-line due to lower price realisation, and costs were also estimated in-line.

With Rio Tinto's ((RIO)) Richard’s Bay force majeure still unresolved, the analyst expects mineral sands markets to remain tight, with Iluka Resources reporting $125/t higher prices for zircon, heading into the September quarter.

Target price is $9.00 Current Price is $9.33 Difference: minus $0.33 (current price is over target).
If ILU meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.76, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Ord Minnett rates JHX as Accumulate (2) -

Looking forward to August results, Ord Minnett reviews earnings estimates and valuations for the building materials sector. It's expected James Hardie Industries will raise the lower end of its FY22 guidance range by $10-15m.

The broker considers the demand backdrop is supportive with potential upside from an improving US remodelling market. Share gains are expected to be solid this year, helped by competitor capacity constraints, and favourable input cost trends.

Ord Minnett retains its Accumulate rating and lifts its target price to $50 from $48.

Target price is $50.00 Current Price is $46.71 Difference: $3.29
If JHX meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $46.44, suggesting downside of -0.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Macquarie rates LME as Outperform (1) -

Limeade, at its second quarter activity update, noted it expects to update current FY21 guidance following the completion of the TINYpulse acquisition. 

Macquarie highlights the securing of three new contracts during the quarter. Operating cash flow was -US$2.0m and investing cash flow
-US$0.8m. The broker reiterates its Outperform rating and target price of $1.73.

Target price is $1.73 Current Price is $0.76 Difference: $0.97
If LME meets the Macquarie target it will return approximately 128% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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 MCR as Outperform (1) -

The Macquarie commodities team expects the nickel market to move into deficit, as a result of strong stainless steel demand, combined with a weaker supply response. 

Upgrades of 3-12% to quarterly nickel price forecasts by the broker over the next 18 months, translates to 4% and 8% upgrades to Macquarie’s 2021 and 2022 nickel price forecasts.

The broker retains the Outperform rating for Mincor Resources, and lifts its target price to $1.35 from $1.30 after raising earnings estimates by 69% and 9%, respectively for FY22 and FY23.

Target price is $1.35 Current Price is $1.14 Difference: $0.21
If MCR meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates MME as Add (1) -

After MoneyMe's fourth quarter trading update, Morgans assesses strong originations growth and early traction of Autopay. The broker's EPS forecasts for FY21-23 are altered by -4%, -17% and 5%, respectively, on revised revenue and margin assumptions.

The analyst believes the new innovative product suite, targeting niche under-serviced markets, has the potential to further drive top-line growth. Morgans lifts its target price to $2.25 from $2.13, and maintains its Add rating, as there is 10% upside to the target price. 

Autopay, launched in late April, has $12m of originations in 12 weeks, and is expected by management to grow significantly.

Target price is $2.25 Current Price is $2.03 Difference: $0.22
If MME meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Morgans rates MP1 as Hold (3) -

With full details of Megaport’s fourth quarter result now released, Morgans updates forecasts and increases its target price to $16.61 from $15.83. The first 21 sales of Megaport’s Virtual Edge (MVE) were made during the quarter.

The analyst forecasts MVE sales (a higher revenue per customer product) will contribute around 40% of FY22 revenue growth.

As anticipated by the broker, overall sales accelerated materially. It’s expected annual recurring revenue (ARR) will exceed $100m before the end of 2021. 

Target price is $16.61 Current Price is $15.80 Difference: $0.81
If MP1 meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $16.95, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Citi rates NCM as Buy (1) -

Newcrest Mining posted a stronger June quarter production result than expected, with copper credits at Cadia and Telfer lowering costs. The miner finished FY21 with group gold/copper production inside its guidance range, the broker notes.

The broker believes gold prices have now peaked, but are unlikely to fall rapidly. Target falls to $30 from $32, Buy retained.

Target price is $30.00 Current Price is $26.18 Difference: $3.82
If NCM meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $32.12, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Credit Suisse rates NCM as Outperform (1) -

Newcrest Mining's June quarter result met guidance and on a full year basis, marginally beating consensus on production 2093oz (2047oz) and all-in costs US$884/oz or $907/oz.

Commenting on the result, Credit Suisse noted it could draw issue with the reported all-in cost as Red Chris drastically lowered its all-in cost - June quarter $651/oz versus March quarter $2169/oz - by classifying the ‘Phase 7’ stripping as non-sustaining.

The broker assumes this change in classification is technically correct, but the cash is still spent, just not reported in the usual
fashion.

The broker suggests investors will need to be more diligent in seeking the full capex spend.

Outperform retained with its target price increasing to $30.00 from $29.60.

Target price is $30.00 Current Price is $26.18 Difference: $3.82
If NCM meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $32.12, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 NCM as Outperform (1) -

Fourth quarter production and costs were better than Macquarie expected. The broker notes cost and volumes guidance were achieved on a strong Cadia guidance beat.

The analyst increases near-term earnings forecasts, with FY21 earnings estimates rising 7%, while FY22 and beyond earnings estimates are essentially unchanged. The broker's price target of $31.00 and Outperform rating are unchanged.

The release of the block cave study for Red Chris, Phase 14A study at Lihir and Panel Cave 1-2 at Cadia are due before the end
of this year, and present key potential catalysts for the stock, in the broker's assessment.

Target price is $31.00 Current Price is $26.18 Difference: $4.82
If NCM meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $32.12, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 NCM as Overweight (1) -

Newcrest Mining posted a strong quarter with gold production 6% above Morgan Stanley estimates, and costs broadly in-line. Morgan Stanley notes strong performances at Cadia and Telfer overshadowed some consistency issues at Lihir.

Largely driven at Lihir with US$1,481/oz, 29% above Morgan Stanley at US$1,152/oz, all-in costs were 6% above the broker's estimates, while cash costs were -2% below.

The Overweight rating and the target price of $32.10 were maintained. Industry view: Attractive.

Target price is $32.10 Current Price is $26.18 Difference: $5.92
If NCM meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $32.12, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Morgans rates NCM as Add (1) -

Morgans assesses a strong fourth quarter, which saw Newcrest Mining attain FY21 production guidance for copper and gold. Higher copper prices and production reduced all-in sustaining costs (AISC), with Cadia and Telfer considered to have strong quarters.

The overall improvement in AISC by 11% quarter-on-quarter was driven by higher copper production and price, strong gold production and the reclassification of capital spending at Red Chris. The broker retains its Add rating and reduces its target price to $30.53 from $30.95.

Copper revenue is growing in importance, and likely to become more important over the next 12 months as gold grades at Cadia begin to decline, notes Morgans. 

Target price is $30.53 Current Price is $26.18 Difference: $4.35
If NCM meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $32.12, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Ord Minnett rates NCM as Buy (1) -

In the wake of the June quarter production report, Ord Minnett maintains its Buy rating for Newcrest Mining and lifts its target price to $38 from $37.50. The company is considered to look attractive from a valuation standpoint.

The broker's highlight was Cadia, with record annualised throughput and the lowest-ever reporting costs of negative -US$377/oz. Lihir missed on unplanned autoclave down time, along with lower grades and recoveries, while Red Chris production was considered in-line. 

Finally, strong throughput at Telfer drove a 30% beat versus the analyst's expectation.

Target price is $38.00 Current Price is $26.18 Difference: $11.82
If NCM meets the Ord Minnett target it will return approximately 45% (excluding dividends, fees and charges).

Current consensus price target is $32.12, suggesting upside of 22.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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 NIC as Outperform (1) -

The Macquarie commodities team expects the nickel market to move into deficit, as a result of strong stainless steel demand, combined with a weaker supply response. 

Upgrades of 3-12% to quarterly nickel price forecasts by the broker over the next 18 months, translates to 4% and 8% upgrades to Macquarie’s 2021 and 2022 nickel price forecasts.

Nickel Mines is Macquarie's key pick of the nickel producers, and the broker lifts its earnings forecasts by 11% and 25% for 2021 and 2022, respectively, and raises its target price to $1.25 from $1.20.

Target price is $1.25 Current Price is $1.08 Difference: $0.17
If NIC meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $1.32, suggesting upside of 14.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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

Citi rates NST as Buy (1) -

Northern Star Resources increased production in the June quarter by 23% and reduced costs by -9%, beating consensus estimates. The company will release a new five-year plan in an investor call at 5pm this afternoon.

Subsequent to this broker note, Northern Star announced Evolution Mining will acquire its Kundana asset. See Citi entry for Evolution Mining.

The broker has trimmed its gold price assumptions, expecting a pullback but not a plunge. Northern Star target falls to $12.90 from $13.60, Buy retained.

Target price is $12.90 Current Price is $10.76 Difference: $2.14
If NST meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $13.02, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Credit Suisse rates NST as Outperform (1) -

Northern Star's June quarter was the strongest of the year with 444koz sold at all-in cost of $1,459/oz, bringing FY21 to a total of 1.60Moz which is within the 1.54-1.70Moz guidance range.

Credit Suisse notes the $400m Kundana sale further strengthens the balance sheet. 

The broker's FY21 earnings per share changes reflect a material step-up in depreciation and amortisation following completion of merger-related write-ups, as well as lower realised prices relative to the broker's forecasts with some offsetting from modest production/cost beats.

The broker's FY22/23 changes relate to Northern Star's updated hedge book and divestment of Kundana.

Outperform rating and $13 target maintained.

Target price is $13.00 Current Price is $10.76 Difference: $2.24
If NST meets the Credit Suisse target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $13.02, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

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

Northern Star Resources has reported a mixed quarter, with gold production up 8% on on Morgan Stanley estimates but all-in sustaining costs also 5% higher than forecast. The KCGM, Jundee and Pogo sites all reported strong quarter results. 

Morgan Stanley notes the company's strategy update indicated a streamlined group with greater operational diversification and opportunities to add value, with key opportunities dominated by KCGM.

However, implied production guidance to FY26 is on average -6% per annum lower on previous guidance, and all-in sustaining costs are on average 13% higher than Morgan Stanley estimates.

The Equal-weight rating and target price of $11.10 are retained. Industry view: Attractive.

Target price is $11.10 Current Price is $10.76 Difference: $0.34
If NST meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $13.02, suggesting upside of 28.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates ORE as Buy (1) -

Orocobre had pre-released solid June quarter production, sales and realised price numbers so no surprises. The ket catalysts from here, the broker suggests, are the Galaxy Resources ((GXY)) merger, commissioning of the hydroxide plant and first ore at Olaroz stage 2.

The broker has modestly increased earnings forecasts, but on spot exchange rate conversion target rises to $9.00 from $7.60. Buy retained.

Target price is $9.00 Current Price is $7.65 Difference: $1.35
If ORE meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $7.22, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates ORE as Outperform (1) -

Orocobre's second quarter result was assessed as strong by Macquarie, with in-line production and sales boosted by cash costs that were -5% lower than expected.

The broker's estimated FY21 earnings loss narrows -6% due to the lower cash costs at Olaroz. Adjustments to realised price and cost assumptions result in increases to earnings for FY24-26 of 3%, 5% and 6%, respectively.

Macquarie lifts its target price to $8.60 from $8.20 and maintains the Outperform rating. The analyst is encouraged that the Olaroz Stage 2 project is on track for commissioning in the second half of 2022.

Target price is $8.60 Current Price is $7.65 Difference: $0.95
If ORE meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $7.22, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

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

A strong move into battery grade production drove a small cost miss for Orocobre during the June quarter, but Morgan Stanley notes this was preflagged. The company achieved 66% production of battery grade production, compared to the broker's forecast of 55%. 

Orocobre has flagged a proportion of sales in the coming quarter will be into contracts agreed to in December 2020 and will therefore reflect pricing of that time. 

Following June quarter results Morgan Stanley forecasts for FY21 earnings per share decrease, while FY22 and FY23 earnings per share forecasts are updated to reflect increased cost assumption and battery grade production. 

Orocobre is Morgan Stanley's preferred lithium stock pick. The Equal-weight rating is retained and the target price increases 20% to $6.40 from $5.35. Industry view: Attractive. 

Target price is $6.40 Current Price is $7.65 Difference: minus $1.25 (current price is over target).
If ORE meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.22, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Ord Minnett rates ORE as Buy (1) -

Ord Minnett doesn't expect any major hurdles ahead of the merger with Galaxy Resources ((GXY)), with a scheme meeting and court date in August ahead of implementation on 25 August.

The analyst remains attracted to the merged entity with its solid growth pipeline and optimisation options, as well as a strong lithium market outlook.

Separately, June quarter production results were largely in-line, notes the broker. Ord Minnett maintains its Buy rating and lowers its price target to $8.40 from $8.45.

Target price is $8.40 Current Price is $7.65 Difference: $0.75
If ORE meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.22, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.6

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

Macquarie rates PAN as Outperform (1) -

The Macquarie commodities team expects the nickel market to move into deficit, as a result of strong stainless steel demand, combined with a weaker supply response. 

Upgrades of 3-12% to quarterly nickel price forecasts by the broker over the next 18 months, translates to 4% and 8% upgrades to Macquarie’s 2021 and 2022 nickel price forecasts.

The broker retains the Outperform rating for Panaoramic Resources, and lifts its target price to $0.20 from $0.19 after raising earnings estimates by 17% and 47%, respectively, for FY22 and FY23.

Target price is $0.20 Current Price is $0.16 Difference: $0.04
If PAN meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

Macquarie rates PGL as Neutral (3) -

Prospa Group's fourth quarter trading update revealed to Macquarie continued momentum in origination growth though operating leverage is yet to emerge. Operating expenses were up 17.4% sequentially.

The broker highlights credit provisioning has been materially reduced to 7.9% from 10.4% of total loans, due to improving business conditions.

The broker increases its target price to $1.25 from $0.92 to reflect origination momentum. The risk to the target price is considered a lack of operating leverage and failure to generate expected cash flow. Macquarie's Neutral rating is unchanged.

Target price is $1.25 Current Price is $1.21 Difference: $0.04
If PGL meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.0

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

Credit Suisse rates QAN as Underperform (5) -

Assuming current covid lockdowns and related state border closures unwind at the end of August 2021, Credit Suisse is forecasting Qantas Airway's first quarter FY22 domestic capacity at 40% of pre-covid levels.

The broker is also forecasting second quarter FY22 capacity increasing to 70% of pre-covid, and then second half FY22 in line with pre-covid.

In Credit Suisse's view, so long as domestic air travel resumes in September, an equity raising is not likely to be necessary.

However, if there continues to be disruption in domestic air travel for the remainder of the half, adjusted net debt could reach $7bn and in the broker's view, an equity raising may be prudent.

Credit Suisse maintains the Underperform rating and lowers the target price to $3.90 from $4.15.

Target price is $3.90 Current Price is $4.64 Difference: minus $0.74 (current price is over target).
If QAN meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.75, suggesting upside of 26.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Ord Minnett rates RWC as Buy (1) -

Following a strengthening of lead indicators in each of Reliance Worldwide's three key regions, Ord Minnett upgrades its earnings forecasts and increases its target price to $6.20 from $5.90. The broker's Buy rating is maintained.

The analyst feels risk remains to the upside, given the potential for acquisitions and/or capital management due to an under-geared balance sheet.

Target price is $6.20 Current Price is $5.34 Difference: $0.86
If RWC meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $5.34, suggesting downside of -0.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.5

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

UBS rates SHV as Buy (1) -

According to UBS, Select Harvests is now highly leveraged to an almond price recovery following cyclical lows. 

The broker is factoring an increase in almond prices to $9.30 per kilogram in FY24, from $6.30 per kilogram in FY21, but notes that California drought conditions have the potential to drive prices above previous peaks of $11.45 per kilogram in FY15. 

Given trading history of one year forward net profit momentum, UBS is forecasting a 19% increase to net profit compound annual growth rate over FY22-FY24. 

UBS reinstates coverage with a Buy rating and the target price increases to $8.70 from $7.65.

Target price is $8.70 Current Price is $7.05 Difference: $1.65
If SHV meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates SRL as Outperform (1) -

The Macquarie commodities team expects the nickel market to move into deficit, as a result of strong stainless steel demand, combined with a weaker supply response. 

Upgrades of 3-12% to quarterly nickel price forecasts by the broker over the next 18 months, translates to 4% and 8% upgrades to Macquarie’s 2021 and 2022 nickel price forecasts.

The broker retains the Outperform rating and $2.50 target price for Sunrise Energy Metals.

Target price is $2.50 Current Price is $1.83 Difference: $0.67
If SRL meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Macquarie rates STO as No Rating (-1) -

Second production was a little better than Macquarie's expectations on strong WA gas production. Management increased 2021 production and sales guidance.

The broker adjusts FY21-23 EPS forecasts by -9%, -2% and 0%, respectively, due to higher depreciation and amortisation charges, partially offset by higher revenues in FY22 and FY23.

Santos is undertaking a process to explore interest from the market in a non-operated stake in Dorado and potentially other WA oil assets. It also continues to progress the sale and purchase agreement with JERA for a 12.5% stake in Barossa.

Due to research restrictions Macquarie cannot advise on either a target price or rating at present.

Current Price is $6.74. Target price not assessed.

Current consensus price target is $8.03, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Morgan Stanley rates STO as Overweight (1) -

Following the release of Santos' second quarter production results, Morgan Stanley notes investor focus has turned to the Oil Search merger proposal. 

It is Morgan Stanley's view that investors are waiting to see if Santos will improve its merger ratio proposal for Oil Search, but the broker points out that a case could be made that given Santos' strong position it may not need to raise any further offer.

Production of 22.5m barrels of oil equivalent was achieved in the fourth quarter, as well as revenue of US$1,076m (a slight miss on forecasts). The company is pointing to the top end of previous guidance for the full year, which is in line with Morgan Stanley estimates. 

The Overweight rating and target price of $8.60 are retained. Industry view: Attractive.

Target price is $8.60 Current Price is $6.74 Difference: $1.86
If STO meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $8.03, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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 STO as Upgrade to Buy from Accumulate (1) -

While the market's focus will likely be on Santos' approach to acquire Oil Search ((OSH)), Ord Minnett assesses a strong June-quarter production report, with all key metrics above expectations. Attributable production of 22.5mmboe was -9% below the previous quarter.

Management increased both production and sales volume guidance for the full year to the top-end of its previous range. The broker raises its rating to Buy from Accumulate and lifts its target price to $8.15 from $8.10.

The broker estimates Santos could pay up to 0.69x for Oil Search, albeit an acquisition is likely to be EPS-dilutive, given Oil Search’s assets are longer-dated.

Target price is $8.15 Current Price is $6.74 Difference: $1.41
If STO meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $8.03, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

UBS rates STO as Buy (1) -

Santos' second quarter revenue of $1,076m is 66% ahead of UBS expectations, which the broker notes is due to a 9% sales volume beat.

The company has narrowed production and sales guidance, as well as cutting production cost guidance to $7.90-8.30 per barrel of oil equivalent. According to UBS, lower costs reflect a faster realisation of synergies from the acquisition of ConocoPhillips' north Australia assets, which the broker now expects to be fully realised within 2021. 

UBS raises the risk rating to 75% from 50%. The Buy rating is retained and the target price decreases to $8.25 from $8.35.

Target price is $8.25 Current Price is $6.74 Difference: $1.51
If STO meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $8.03, suggesting upside of 22.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Macquarie rates SVW as Outperform (1) -

Macquarie revises forecasts to consolidate Boral ((BLD)) with Seven Group ownership, which is now around 60%, as compared to prior forecasts, based on circa 20%. Seven Group's offer closes on 29 July.

These revisions drive material broker EPS upgrades of 12-14% in FY22 and FY23 and assume Boral operates as is. Macquarie maintains its Outperform rating and lifts its target price to $30.41 from $27.50.

Should Boral divest its US operations, it would have a net cash position of around $3.6bn at the end of FY22 and the above-mentioned   EPS revisions would increase by another 5% and 8%, respectively. Capital returns provide further upside risk to earnings.

Target price is $30.41 Current Price is $22.20 Difference: $8.21
If SVW meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $27.87, suggesting upside of 21.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

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

Senex Energy has reported fourth quarter production results of 0.8m barrels of oil equivalent, in line with Morgan Stanley forecasts. Revenue of $32.5m was a miss on the brokers expectations of $35m. 

Morgan Stanley is expecting Senex Energy to increase production by 10% for FY22 to 3.6m barrels of oil equivalent given the expansion of Roma North. The broker also points to likely gas price increases in coming quarters as oil surge pricing from the second half of FY21 flows through. 

The Equal-weight rating is retained and the target price increases to $3.50 from $3.36. Industry view: Attractive. 

Target price is $3.50 Current Price is $3.26 Difference: $0.24
If SXY meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.84, suggesting upside of 19.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.7

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

Citi rates VVA as Buy (1) -

The fresh lockdowns suggests downside risk for Viva Leisure's FY22 earnings, the broker notes, with 32% of the company's health clubs currently closed in NSW and Victoria. The broker nonetheless retains Buy, considering this but a temporary issue.

Longer term growth prospects are unchanged, although the broker's new forecast of 30 greenfield clubs and 22 acquisitions in FY22 is below Viva's target run-rate of ten and seven per quarter, reflecting the lockdowns.

Buy retained, target falls to $2.50 from $2.85.

Target price is $2.50 Current Price is $1.80 Difference: $0.7
If VVA meets the Citi target it will return approximately 39% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Ord Minnett rates WPL as Buy (1) -

Ord Minnett sees some merit in Woodside Petroleum acquiring the petroleum assets of BHP Group ((BHP)), depending on the price.
The transaction would be potentially accretive to both net present value (NPV) and EPS, and would offer scale and diversification. 

In a speculative report, the analyst assumes a transaction price of -US$18bn, which is 40% debt-funded, and estimates net debt would peak at US$17bn (38% gearing) in 2024. Production and operating earnings (EBITDA) would be expected to double.

Also, the share count would increase by 66% and the transaction would be about 10% EPS accretive and 7-8% NPV accretive, explains the broker. Ord Minnett retains its Buy rating and $29.30 target price.

Target price is $29.30 Current Price is $22.58 Difference: $6.72
If WPL meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

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

The Macquarie commodities team expects the nickel market to move into deficit, as a result of strong stainless steel demand, combined with a weaker supply response. 

Upgrades of 3-12% to quarterly nickel price forecasts by the broker over the next 18 months, translates to 4% and 8% upgrades to Macquarie’s 2021 and 2022 nickel price forecasts.

Macquarie lifts the rating for Western Areas to Outperform from Neutral and increases its target price to $2.70 from $2.60, after lifting FY22 and FY23 by 69% and 20%. 

Target price is $2.70 Current Price is $2.40 Difference: $0.3
If WSA meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $2.60, suggesting upside of 2.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.4

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

Morgans rates Z1P as Add (1) -

In the wake of a fourth quarter update, Morgans lowers EPS forecasts for FY21 and FY22 by -1% and -27% (off a low base), and reduces its price target to $8.57 from $9.75. The Add rating is retained after group growth rates across key metrics were considered solid.

The broker highlights the key US business also delivered healthy growth rates for revenue and customers, not dissimilar to the last quarter.

In A&NZ, sequential revenue growth was slightly down, with the introduction of ‘Tap and Zip’ seeing a mix change, explains the analyst. It's noted, strong volume increases were accompanied by declining average transaction values.

Target price is $8.57 Current Price is $6.99 Difference: $1.58
If Z1P meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $8.12, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

Ord Minnett rates Z1P as Accumulate (2) -

Zip Co's June quarter update showed Ord Minnett an acceleration in growth in Quadpay’s total transaction value (TTV), and A&NZ customer adds were 4% ahead of expectations. A lift in cost estimates trims the broker's target price to $10.50 from $11.50. 

Whilst US customers grew slightly below additions for the March quarter, the reopening occurring in the US is clearly a slight drag on Nth American BNPL businesses, explains the analyst. Even so, Quadpay’s numbers were slightly ahead of the broker's muted expectations.

Ord Minnett retains its Accumulate rating.

Target price is $10.50 Current Price is $6.99 Difference: $3.51
If Z1P meets the Ord Minnett target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $8.12, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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

UBS rates Z1P as Sell (5) -

Zip Co's fourth quarter trading update was a miss on UBS expectations, with volume numbers below UBS's forecasts by -10% for Australia and -15% for the US. 

Australian revenue of $61.4m was ahead of forecast, but US revenue missed expectations at $64.3m compared to a forecast $71.6m.

UBS notes the company remains a relatively early-stage investment with significant execution risks. The Sell rating and target price of $5.60 are retained. 

Target price is $5.60 Current Price is $6.99 Difference: minus $1.39 (current price is over target).
If Z1P meets the UBS target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.12, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.1

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