Australian Broker Call

Macquarie rates ALQ as Outperform (1) -

Macquarie assesses FY24 net profit for ALS Ltd came in 1% above the analyst's forecast and above consensus estimates.

The broker points to Life Sciences, particularly Environmental and Food segments, which delivered strong performance, with the company seeing substantial opportunities in testing for PFAS, the "forever" chemical.

Management is looking for mid-single digit revenue growth in FY25 up on the 2.2% growth delivered in FY24.

Macquarie adjusts FY25 EPS estimates by 0.1% and FY26 EPS by 0.7%  reflecting stronger commodity earnings and recent acquisitions. 

The target price is raised to $15.20 from $13.90. Outperform rating unchanged.

Target price is $15.20 Current Price is $14.48 Difference: $0.72
If ALQ meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $13.41, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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) -

In delivering a FY24 profit (UNPAT) of $316.5m, ALS Ltd performed in line with its own guidance and beat the consensus forecast by 1%. 

UBS raises its earnings forecasts to reflect a better performance from the core Life Sciences business, and a slightly more constructive outlook for Nuvisan.

Management expects "modest" margin improvement from Life Sciences business and "resilience" in Minerals.

For FY25, UBS sees upcoming catalysts from a turnaround of Nuvisan, integration of recent acquisitions, and a recovery in exploration activity.

The target rises to $14.55 from $13.30 and the Neutral rating is unchanged.

Target price is $14.55 Current Price is $14.48 Difference: $0.07
If ALQ meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $13.41, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Bell Potter rates ARX as Buy (1) -

Aroa Biosurgery's FY24 revenue was in line with the mid-point of management guidance, while the earnings (EBITDA) loss of -NZ$3.1m was better than the -NZ$3.7m forecast by Bell Potter. The gross margin improved by around 140bps to 85%.

Revenues from the Myriad product increased by 73% on the previous corresponding period and now represent 34% of total product sales, a percentage the broker suggests will keep rising.

FY25 product revenue guidance of NZ$80-$87m compares to the analysts' previous revenue forecast for FY25 of $87m.

The Buy rating and 90c target are maintained. 

Target price is $0.90 Current Price is $0.50 Difference: $0.405
If ARX meets the Bell Potter target it will return approximately 82% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Morgans rates ARX as Add (1) -

Aroa Biosurgery's FY24 revenue was in line with guidance though the EBITDA loss of -NZ$3.1m was higher than the -NZ$2.1m expected by Morgans. Myriad sales continue to grow and be a key focus for the group, note the analysts.

Importantly, according to the broker, management provided FY25 guidance for revenue of NZ$80-87m and normalised EBITDA of NZ$2-6m.

The Add rating is unchanged and the broker's target falls to $1.05 from $1.20 due to lower earnings forecasts (on average by -18%) across the forecast period reflecting a higher cost base.

Target price is $1.05 Current Price is $0.50 Difference: $0.555
If ARX meets the Morgans target it will return approximately 112% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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 BRG as Upgrade to Outperform from Neutral (1) -

Macquarie is upbeat on the outlook for Breville Group post the Macquarie Conference.

Notably the broker highlights the positive outlook from the expansion in direct distribution over 2025, by as much as 28 countries where the company has indirect distribution in place.

Breaking it up regionally, Asia represents 72% of the addressable market, Europe 13% and South America 8%, notes the broker.

Macquarie highlights the company grew its addressable market at an 11%-14% CAGR over FY17-23, supporting strong revenue growth.

The analyst lifts FY25 EPS forecast by 2.9% and FY24 EPS remains unchanged.

The stock is upgraded to Outperform from Neutral and the target price raised to $28.60 from $26.30.

Target price is $28.60 Current Price is $25.97 Difference: $2.63
If BRG meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $27.48, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Citi rates DDR as Buy (1) -

After adjusting for the backorder book unwind of -$65m and Autodesk impacts of -$30m, Citi assesses Dicker Data missed 1Q24 sales growth by -1% as opposed to the headline fall in sales of -9.6%.

The broker highlights the softer market conditions delaying business purchasing decisions and views it as a temporary delay rather than a structural change to the company's market position.

Management remains upbeat on the outlook for 2H24, and Citi analysts remain positive on new vendor ramp up for Adobe and Hikvision as well as the PC refresh and AI PC update.

Citi lowers FY24 sales by -13% and forecast a -20% decline in gross margins from competitive pressures. EPS forecasts decline -10.% for FY24 and -8.9% for FY25.

Buy rating maintained; the target is lowered to $11.70 from $13.60.

Target price is $11.70 Current Price is $9.05 Difference: $2.65
If DDR meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $10.45, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in December.

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 DGL as Downgrade to Hold from Add (3) -

Morgans lowers its FY24 EBITDA forecast for DGL Group to be in line with the previous corresponding period, as per management guidance, which also results in an incremental reduction to earnings estimates in subsequent years.

These earnings reductions lead to a new target of 65c, down from 77c, and the broker downgrades its rating to Hold from Add.

Separately, management announced the -$2.35m acquisition of Enlog Pacific, a hazardous goods storage and distribution business. 

Target price is $0.65 Current Price is $0.60 Difference: $0.05
If DGL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $0.72, suggesting upside of 21.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates ELD as Buy (1) -

The Citi analyst expects Elders to return to average trading conditions in FY24, despite a subdued 1Q24 and is encouraged by management's reconfirmation of FY24 EBIT guidance of $120m-$140m.

The company is looking to 5%-10% EBIT growth in FY26 and Citi is upbeat on the improved working capital efficiency, volume growth and higher dividend payout.

The contributions from acquisittions and the cost-out program are also on track, notes the broker.

Citi trims EBIT forecasts for FY25 by -3%. Buy rating unchanged and the target is lifted to $9.65 from $8.50.

Target price is $9.65 Current Price is $8.47 Difference: $1.18
If ELD meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $9.07, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

UBS rates ELD as Neutral (3) -

After a further review of Elders' 1H result, UBS retains its $9 target and Buy rating, despite weakness for Livestock (i.e. cattle) markets and Retail Products, where margin pressure resulted from selling out-of -the money inventory.

A summary of the broker's initial review of 1H results follows:

As part of today's 1H result release, management at Elders reiterated earnings (EBIT) guidance, despite 1H earnings of $38m, which missed the $44m consensus forecast. 

In a first/early assessment, UBS notes the earnings weakness seems to be isolated to the 1Q, before Livestock markets recovered, but suggests a solid step-up from current run-rate levels will be needed to meet management's guidance.

FY24 earnings guidance is for between $120-140m which compares to the consensus $136m forecast, implying to the broker 2H earnings of between $82-102m.

Target price is $9.00 Current Price is $8.47 Difference: $0.53
If ELD meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $9.07, suggesting upside of 7.9% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates GNC as Buy (1) -

GrainCorp shares are under-appreciated by investors, acclaims Ord Minnett, with the broker explaining this assessment is made on the basis of through-the-cycle earnings forecasts, plus a value assessment of the company's port assets.

As such, it is the broker's view here is an attractive opportunity for fresh investors.

A net asset valuation reaches as high $11.80 per share, but Ord Minnett's target price is set at $9.80. Buy.

Here is where things get 'complicated'. Two days ago, Ord Minnett updated with a Hold rating and $7.40 fair value assessment taking guidance from Morningstar research.

Today's forecasts are noticeably higher.

Yes, we don't either.

Target price is $9.80 Current Price is $8.44 Difference: $1.36
If GNC meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $9.42, suggesting upside of 13.0% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgan Stanley rates IEL as Overweight (1) -

Morgan Stanley highlights inherent uncertainties for IDP Education around student migration polices across core destination markets.

The broker lowers its FY24-26 earnings estimates by -6% on average due to recent changes for these migration settings on forecast placement volumes.

While market share gains from digital and product investment are expected to act as an offset, Morgan Stanley cautions that management's ability to deliver student placement volume growth will be challenged in FY25.

The Overweight rating is maintained on a compelling valuation, according to the analysts, and the target falls to $22.50 from $24. Industry View: In-Line.

Target price is $22.50 Current Price is $17.26 Difference: $5.24
If IEL meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $21.74, suggesting upside of 25.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Macquarie rates IFT as Neutral (3) -

Infratil reported FY24 EBITDAF of NZ$864m, 3% above midpoint guidance, with a final dividend per share of NZ$0.13 per share, notes Macquarie.

Management guided to FY25 EBITDAF of NZ$920m, which is -7% below the Macquarie analyst's estimate due to higher development expenses.

The broker notes guidance for CDC Data Centres' ((GDC)) FY25 EBITDAF missed by -9%, but sees encouraging signs in stabilising utilisation rates. Gearing is below the group's 30% target at 20% which could offer more capacity, according to Macquarie.

EPS estimates for FY25-FY26 have been revised by -3% and -6%, respectively. 

Neutral rating unchanged and the target price lowered to NZ$10.42 from NZ$10.49.

Current Price is $9.75. Target price not assessed.

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

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

Citi rates JHX as Buy (1) -

James Hardie Industries reported a -3% miss on 4Q24 earnings consensus, but Citi highlights the deeper concerns lay around the -13% downgrade in the FY25 earnings guidance against consensus estimates.

Key drivers for the downgrade, according to the broker, include a -200bps decrease in expected volumes from macro headwinds and increased selling and administrative costs (SG&A), with 4Q24 costs reaching -US$164m, a 40% year-on-year increase.

Annualised SG&A costs are expected at -US$500m and are recognised as a key aspect of the earnings outlook downgrade and investor concerns, notes the analyst.

Buy rating retained and a $63.00 target price.

Target price is $63.00 Current Price is $46.67 Difference: $16.33
If JHX meets the Citi target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $57.40, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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 JHX as Upgrade to Outperform from Neutral (1) -

While Macquarie acknowledges a miss on 4Q24 earnings from James Hardie Industries and the decline in FY25 guidance, the fall in the stock price is assessed as compensating for the downgrade in guidance.

The analyst points to the delay in the recovery of the repair and remodelling (R&R) market for the diminished earnings outlook.

Macquarie views  the company's progress in cost and working capital reduction, as well as its investment in market development and does not agree there the company's competitive position is being eroded.

EPS estimates for FY25 and FY26 have been revised downwards by -12.7% and -12.6%. Rating upgraded to Outperform from Neutral and the price target lowered to $55 from $62.40.

Target price is $55.00 Current Price is $46.67 Difference: $8.33
If JHX meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $57.40, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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 JHX as Overweight (1) -

James Hardie Industries' US total addressable market expectations have fallen to the range of -6% to 3% from -4% to 6%. While 4Q results were a little softer than the broker anticipated, maiden FY25 guidance missed the consensus forecast by -13%.

Morgan Stanley explains the addressable market change was largely driven by softer US repair and remodel (R&R) expectations, but suspects an element of conservatism by management.

Guidance for the North American EBIT margin of 29%-31% compares to forecasts by the broker and consensus for 32.2% and 31.5%, respectively.

Adjusted net income is expected to be between US$155-175m, which represents a miss of -10% and -12%, against forecasts by the broker and consensus, respectively.

The Overweight rating is retained as the broker believes the medium-term structural growth story remains intact. The broker's target falls to $58 from $65. Industry View: In-Line.

Target price is $58.00 Current Price is $46.67 Difference: $11.33
If JHX meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $57.40, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

UBS rates JHX as Buy (1) -

On lower volume assumptions, UBS lowers its FY25 and FY26 EPS forecasts by -9% and -6%, respectively, following 4Q results by James Hardie Industries. Revenues are taking longer-than-expected to materialise while management continues to invest in demand creation.

The broker is buoyed by management commentary the repair and remodel (R&R) market is directionally improving and "high-end" R&R should recover through the 2H.

The analyst also believes concerns have eased around the margin outlook as EBIT margin volume scenarios remained unchanged for FY25.

Buy. The target falls to $60 from $66.50.

Target price is $60.00 Current Price is $46.67 Difference: $13.33
If JHX meets the UBS target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $57.40, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

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

Citi rates LIC as Buy (1) -

Citi remains positive on Lifestyle Communities despite weakness in the Melbourne residential property market.

The broker states the pullback in the share price reflects the more downbeat near term outlook, with Citi adopting a more positive longer term approach to the outlook for Lifestyle Communities

The analyst has lowered estimates for the company due to higher operational and interest expenses by -17% for FY24 and -10% for FY25, but FY24 EPS forecast lifts 3% for expected settlements at the top end of the range.

The target price is adjusted to $17.20 from $17.90. Buy rating unchanged.

Target price is $17.20 Current Price is $13.30 Difference: $3.9
If LIC meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $15.28, suggesting upside of 15.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates MIN as Overweight (1) -

In a positive for Mineral Resources, according to Morgan Stanley, management has indicated Onslow will ramp-up to nameplate by June next year, in line with the broker's forecast, despite announcing the delivery of first ore on ship ahead of schedule.

Practical completion of project infrastructure, including the dedicated haul road, is scheduled for the 2H of 2024.

The Overweight rating and $83 target are maintained. Attractive sector view.

Target price is $83.00 Current Price is $79.24 Difference: $3.76
If MIN meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $74.71, suggesting downside of -4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgans rates NHC as Hold (3) -

While New Hope's 3Q earnings (EBITDA) and sales missed Morgans forecasts by -8% and -3%, respectively, the broker notes the production/earnings report held few surprises.

The company's production outlook is strong, according to the broker, and production guidance is unchanged. Management is guiding to the low end on costs, with volume growth at Bengalla making a contribution to the fall in costs, explains the analyst.

The Hold rating is retained and the target rises to $4.95 from $4.80.

Target price is $4.95 Current Price is $5.04 Difference: minus $0.09 (current price is over target).
If NHC meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.95, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.1

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

Macquarie rates PNI as Outperform (1) -

Macquarie assessed the presentation from Pinnacle Investment Management at the Macquarie conference, highlighting the company's plans to establish a new affiliate led by the former Royal London global equities team.

The strategy points to the company's multi-affiliate model and the strength in obtaining excellent talent, notes the analyst.

April funds under management (FUM) came in at $106bn, up 6% since December 2023, with net flows of $4bn.

The broker expects significant growth opportunities in private markets, international expansion, and new strategies.

No changes to the Macquarie earnings forecasts. Outperform rating and the price target lifts to $14.52 from $10.64.

Target price is $14.52 Current Price is $12.95 Difference: $1.57
If PNI meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $13.18, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Morgans rates PWH as Add (1) -

Electric vertical take-off and landing (eVTOL) aircraft, often referred to as ‘air taxis’ or ‘flying taxis’, are expected to provide significant time savings in densely populated cities compared to ground travel, explains Morgans.

The broker believes air taxi travel may be imminent, and while production ramp-up remains uncertain, PWR Holdings is seen as well-placed to benefit as the industry grows.

At recent 1H results, management noted involvement with a number of eVTOL companies and stated PWR is very close to moving from prototyping to first production with some of them.

The Add rating and $14.25 target are maintained.

Target price is $14.25 Current Price is $11.66 Difference: $2.59
If PWH meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $11.78, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates QAN as Buy (1) -

In a thought piece on Qantas Airways, UBS notes that while cyclical risks remain, the company's strong exposure to consumer and business travel demand provides compensation for the current single digit valuation multiple.

The analyst still anticipates further upside for Qantas shares, even after the 17% rally since January. The Buy rating and $7.50 target are unchanged.

Target price is $7.50 Current Price is $6.27 Difference: $1.23
If QAN meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $6.68, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgan Stanley rates RIO as Overweight (1) -

It is difficult for Morgan Stanley to assess the potential financial impact on Rio Tinto following media reports of the company declaring force majeure on alumina supply from its refineries in Queensland.

The broker explains force majeure will only affect sales of alumina to third parties and not Rio's in-house aluminum operations.

The Overweight rating and $139 target are unchanged. Industry view is Attractive.

Target price is $139.00 Current Price is $134.09 Difference: $4.91
If RIO meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $128.00, suggesting downside of -6.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.0

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

Macquarie rates S32 as Outperform (1) -

South32 hosted an investor briefing focusing on the growth potential at Hermosa and Sierra Gorda, where the 4th grinding line expansion is expected to add 20% to production for US$600m.

The broker views the company's  strategic investments in manganese and copper projects positively, with Hermosa potentially receiving US Government grants to scale production.

Concerns remain over Cannington’s shorter mine-life and production recovery at Gemco, notes the broker.

Macquarie lowers EPS forecasts for FY24 and FY25 by -1 and -4%, respectively. Outperform rating retained and the target price is raised to $4.20 from $3.90.

Target price is $4.20 Current Price is $3.90 Difference: $0.3
If S32 meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.78, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Morgan Stanley rates S32 as Overweight (1) -

Morgan Stanley highlights South32 will commence a phased return to mining activity at its Australian manganese operations from June to build stockpiles ahead of the 2024/25 wet season.

Overweight. Target $3.35. Industry view: Attractive.

Target price is $3.35 Current Price is $3.90 Difference: minus $0.55 (current price is over target).
If S32 meets the Morgan Stanley target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.78, suggesting downside of -3.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 0.7

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

Citi rates SHL as Neutral (3) -

Sonic Healthcare announced a downgrade in FY24 EBITDA guidance of -8.5% and lowered FY25 guidance by -9.5% below consensus according to the Citi analyst.

The broker points to inflationary pressures, unfavourable FX, and slower-than-expected improvement initiatives as key reasons.

Citi reduced FY24-25 EPS forecasts by -12% and -25% post the downgrade in earnings expectations and the analyst highlights the company remains vulnerable to wage inflation as employee costs represented circa 50% of revenue in 1H24.

The target price is lowered to $25 from $31 while maintaining a Neutral rating. 

Target price is $25.00 Current Price is $25.01 Difference: minus $0.01 (current price is over target).
If SHL meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.83, suggesting upside of 21.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Macquarie rates SHL as Neutral (3) -

Sonic Healthcare downgraded FY24 EBITDA guidance to $1.6bn from the lower end of the prior guided range of $1.7-1.8bn, pointing to inflationary pressures and foreign exchange headwinds.

After excluding covid and acquisition contributions, FY24 EBITDA growth is estimated at 1% with revenue growth of 10%, according to Macquarie. 

Notably the company's maiden FY25 guidance is also below the brokers expectations, with an anticipated EBITDA of $1.70-1.75bn.

The broker's EPS forecasts are lowered by -6% and -9% for FY24-FY25 as higher capital expenditure offsets revenue growth.

Neutral rating unchanged. Target price falls -5% to $26.35 from $27.80.

Target price is $26.35 Current Price is $25.01 Difference: $1.34
If SHL meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $29.83, suggesting upside of 21.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgan Stanley rates SHL as Overweight (1) -

Management at Sonic Healthcare has lowered FY24 earnings (EBITDA) guidance due to inflationary pressures, currency headwinds and a slower delivery of margin improvement initiatives, explains Morgan Stanley.

FY24 earnings guidance slips to $1.6bn from the bottom end of the $1.7-1.8bn guidance range.

The main negative surprise was inaugural FY25 guidance for $1.70-1.75bn compared to existing forecasts by the analysts and consensus for $1.86bn and $1.9bn, respectively.

Target $31.65. Overweight. Industry view is In-Line.

Target price is $31.65 Current Price is $25.01 Difference: $6.64
If SHL meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $29.83, suggesting upside of 21.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Morgans rates SHL as Add (1) -

Ongoing inflationary pressure and currency headwinds have conspired to lower Sonic Healthcare's earnings, observes Morgans.

Management noted these hurdles are “delaying the completion of programs to align labour costs with current trading conditions”.

As a result of these headwinds, FY24 earnings guidance is lowered to around $1.6bn from the lower end of the $1.7-1.8bn range.

The broker suggests preliminary FY25 earnings guidance of between $1.7-1.75bn is conservative, given evidence of waning inflation, ongoing cost-out and multiple earnings drivers.

The Add rating is maintained, but the target is reduced to $31.19 from $34.94 on the broker's lower FY24-26 forecasts.

Target price is $31.19 Current Price is $25.01 Difference: $6.18
If SHL meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $29.83, suggesting upside of 21.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

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

Post the 1Q24 trading update from Smartgroup Corp, Macquarie notes the rapid growth in novated leases, spurred by the EV tax exemption, is now moderating.

The analyst envisages the next phase of growth will be driven by a wider range of EV models, increased penetration, and new corporate clients.

The company's AGM trading update aligns with Macquarie's expectation of 29% year-on-year growth in novated lease settlements for 1Q24.

No changes have been made to earnings forecasts. Rating upgraded to Outperform from Neutral on share price weakness.

The price target remains at $9.51.

Target price is $9.51 Current Price is $8.43 Difference: $1.08
If SIQ meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $10.11, suggesting upside of 21.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Macquarie rates TLS as Downgrade to Neutral from Outperform (3) -

The trading update from Telstra Group was a sombre occasion, according to Macquarie, reflecting a less positive outlook for mobile markets and challenges in the enterprise segment, with FY25 guidance now incorporating only one more price increase.

Management's announcement to remove annual inflation-linked price increases in postpaid customer contracts is viewed negatively for industry pricing, highlights the analyst.

The broker also notes headwinds to dividends, projecting flat dividends into FY25 due to restructuring costs.

EPS forecasts have been revised down by -7% and -9% in for FY25 and FY26. Rating downgraded to Neutral from Outperform. Target price lowered to $3.70 from $4.38.

Target price is $3.70 Current Price is $3.57 Difference: $0.13
If TLS meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.01, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgan Stanley rates TLS as Overweight (1) -

Telstra Group will cut -9% of its total workforce to reduce fixed costs by around -$250m per year as the decline in Enterprise division revenue has accelerated, explains Morgan Stanley.

The analysts note software companies globally are displacing traditional telcos for telephony and connectivity.

Separately, the company will remove its CPI-linked annual price increases for post-paid Mobile for FY25.

The target falls to $4.20 from $4.50 and the broker's Overweight rating is retained given shareholders, on the broker's projections, can still expect a progressively rising absolute dividend. Industry view: In-line.

Target price is $4.20 Current Price is $3.57 Difference: $0.63
If TLS meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $4.01, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Morgans rates TLS as Downgrade to Reduce from Hold (5) -

Morgans downgrades its rating for Telstra Group to Reduce from Hold and lowers the target to $3 from $4 due to a change in valuation method and lower forecasts.

The broker points out management was previously looking to unlock the value of mis-priced assets from inside the conglomerate, justifying a higher PE.

This aim has been reversed, observes the analyst, along with yesterday's announced reversal of the post-paid mobile CPI based price rise mechanism.

Following yesterday's announcement on organisational changes aimed at cost reductions, the broker lowers its FY24 EPS forecast by -5%, to reflect the impact of the one-off restructuring costs. FY25/26 forecasts were reduced by -11% reflecting lower earnings.

Management reaffirmed FY24 guidance and provided early FY25 underlying EBITDA guidance of between $8.4-8.7bn.

Target price is $3.00 Current Price is $3.57 Difference: minus $0.57 (current price is over target).
If TLS meets the Morgans target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.01, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

UBS rates TLS as Buy (1) -

UBS leaves its Buy rating and $4.40 target unchanged for Telstra Group despite cutting FY24 and FY25 EPS forecasts by -2% and -5%, respectively. The dividend is still expected to grow to 19c and 21c in FY25 and FY26, respectively.

These lower EPS forecasts mostly reflect the -$200-250m restructuring costs announced yesterday associated with the -2,800 workforce reduction over FY24-25, explains the analyst.

The retrenchments are part of the planned -$350m net fixed cost reduction between FY23 to FY25, and also help to address continued weakness in Enterprise/NAS, notes the broker.

FY24 guidance was reaffirmed and new FY25 guidance was for underlying EBITDA (excluding restructuring costs) of $8.4-8.7bn, which compares with the UBS forecast for $8.5bn, and consensus for $8.6bn.

Target price is $4.40 Current Price is $3.57 Difference: $0.83
If TLS meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $4.01, suggesting upside of 17.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Bell Potter rates TNE as Buy (1) -

Bell Potter's revenue (excluding interest) forecast coming into TechnologyOne's 1H results was at the top end of the range of all brokers, yet the company managed to still exceed this level by 1%.

A surprise for the analysts was FY24 guidance for 12-16% pre-tax profit growth when management in recent history has typically guided to 10-15% growth.

The interim dividend grew by 10% to 5.08cps, as expected by Bell Potter.

Buy. The target rises to $19 from $18.50 mostly because the broker assumes a higher valuation multiple based on higher peer multiples and the likelihood that management's FY24 guidance will be beaten.

Target price is $19.00 Current Price is $16.75 Difference: $2.25
If TNE meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $16.47, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

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

Post the TechnologyOne 1H24 earnings report, Macquarie lifts the outlook for annual profit before tax (PBT) to 15%-20% growth from 10%-15%, as management raises the FY24 guidance to 12%-16%, higher than the historical average.

The broker also liked the 10% increase in the dividend per share to 5.08c with franking going to 65% from 60%.

SaaS customers grew in the 1H24 to 56 from 34 in FY23 with 70% of all products delivered via SaaS. The UK market was a robust contributor.

Macquarie highlights the non recurring revenue growth of over 115% (ex-SaaS flips), which the analysts believe allays market fears on SaaS flips and supports growth in products per customer.

Forecast EPS estimates for FY25 and FY26 have been revised by -1% and 1%. FY24 is unchanged.

The rating is upgraded to Outperform from Neutral. Target price is raised to $18.30 from $16.20.

Target price is $18.30 Current Price is $16.75 Difference: $1.55
If TNE meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $16.47, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

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

TechnologyOne's 1H revenue and profit (PBT) were slight beats versus Morgan Stanley's forecasts though FY24 PBT guidance was around -2% below expectations.

Management retains longer-term guidance and the company remains on track to surpass $500m annual recurring revenue (ARR) by FY25.

By this time, management also expects the pre-tax profit margin will widen to 35% compared to the around 31% implied for FY24, observes the broker.

Morgan Stanley is not a fan generally of the TechnologyOne business model which prioritises close relationships with customers over fast expansions, which is also shown in its target price and rating.

Target $13. Equal-weight. Industry view: Attractive.

Target price is $13.00 Current Price is $16.75 Difference: minus $3.75 (current price is over target).
If TNE meets the Morgan Stanley target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $16.47, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

UBS rates TNE as Neutral (3) -

TechnologyOne delivered a strong 1H result, with a 21% year-on-year rise for annual recurring revenue (ARR), supported by a tailwind from the final SaaS conversions, highlights UBS. 

Management also guided to 12-16% FY24 PBT growth, a little higher than the usual 10-15% PBT guidance each year, notes the analyst.

pre-tax profit growth could ramp-up to circa 15-20% over time, according to management, which the broker can also envisage given operating leverage off the SaaS platform and the high-margin SaaS roll-out over time.

The Neutral rating is maintained and the target rises to $17.20 from $16.40.

Target price is $17.20 Current Price is $16.75 Difference: $0.45
If TNE meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $16.47, suggesting downside of -7.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.1

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

Citi rates VVA as Buy (1) -

Viva Leisure provided an updated EBITDA guidance of an additional $1.6m p.a. post the launch of VivaPay, which is assessed by Citi as more certainty around future earnings, rather than an underlying improvement in the business operations.

Viva Leisure’s tech platform may offer further services to franchisees, enhancing long-term earnings potential and the broker anticipates healthy uptake of Viva Pay among franchisees due to its benefits.

The analyst upgraded the company's FY25 and FY26 EBIT forecasts by approximately around 5-6% and accordingly increased the price target to $2.50 per share from $2.42.

Buy rating retained.

Target price is $2.50 Current Price is $1.39 Difference: $1.115
If VVA meets the Citi target it will return approximately 81% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates WEB as Buy (1) -

It is Citi's initial assessment Webjet, earlier this morning, released FY24 results that are largely in line with expectations. The B2B division appears to be tracking some 10% ahead.

International travel is improving and margins in B2C are looking better, the analyst points out. Citi believes further improvement in international travel should be expected, with international to overtake domestic, as is already happening elsewhere.

While today's performance is categorised as largely in line, the broker does highlight B2B is performing better-than-anticipated.

Buy. Target price is $9.90.

Target price is $9.90 Current Price is $8.44 Difference: $1.46
If WEB meets the Citi target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $9.43, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

UBS rates WEB as Buy (1) -

Earlier today Webjet released interim financials and UBS, upon first glance, comments the B2B numbers look "very solid". And while domestic slowing means B2C numbers look softer, the broker states there are plenty of offsets available in today's report.

All in all, the broker talks about an "impressive" result, though it had been largely flagged beforehand. TripNinja, plus improving revenues, and better EBITDA margins are all highlighted as positives.

Also, capital management might be on the cards with the report showing excess net cash is at $406m versus UBS's forecast of $387m. And then there's the potential separation of B2C and B2B.

Buy. Target $10.

Target price is $10.00 Current Price is $8.44 Difference: $1.56
If WEB meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $9.43, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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