Australian Broker Call

Ord Minnett rates ACF as Buy (1) -

Ord Minnett believes Acrow Formwork and Construction Services' free cash flow is reaching an inflection point for FY23 after growth capex, and considers the company to be in good shape heading into FY24, the company striking several secured hire contract wins (up 36% year on year).

The broker incorporates the Heinrich's Ishebeck Formwork Panel system and recently upgraded guidance into its estimates and EPS forecasts rise 3% in FY23; 7% in FY24; and 7% in FY25.

Buy rating and 98c target price retained.

Target price is $0.98 Current Price is $0.71 Difference: $0.27
If ACF meets the Ord Minnett target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $1.08, suggesting upside of 47.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

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

Auckland International Airport's target for a weighted average cost of capital (WACC) return of 8.73% over FY24-27 (under PSE4 disclosure requirements), is significantly higher than the 7.7% assumed by Morgan Stanley.

The return is based on Regulated Asset Base growth of NZ$2bn, while keeping aeronautical prices comparable to Oceania destination airports.

The broker also notes Auckland City Council has voted (on June 9) to sell its 7% stake in Auckland International Airport, as part of its FY24 budget. Sale execution adds modest uncertainty to the broker's investment thesis.

The target is raised to NZ$9.28 from NZ$8.88 on the PSE4 disclosure. Equal-weight. Industry view: Cautious.

Current Price is $7.83. Target price not assessed.

Current consensus price target is $7.05, suggesting downside of -6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: -0.2

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

Shaw and Partners rates ANG as Buy (1) -

Austin Engineering has purchase orders for four truck trays from a major iron ore producer in India which Shaw and Partners believes can potentially open up a substantial new market opportunity.

This is the first time the company will sell truck trays into India. These will be used in iron ore operations to demonstrate the benefits of the design although there is no commitment for further orders.

The broker believes the announcement highlights the quality of the Austin Engineering product and service offering and reiterates a Buy rating with a $0.43 target.

Target price is $0.43 Current Price is $0.26 Difference: $0.17
If ANG meets the Shaw and Partners target it will return approximately 65% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Shaw and Partners rates ATA as Buy (1) -

Shaw and Partners notes consolidation in the IT services industry has been fierce over recent years and Atturra is leveraged to the demand. Its main client exposure is the largest external integrator and provider of TNE services.

Moreover, Canberra has flagged the need for more domestic expertise in IT services alongside an expansion in defence budgets and strategic planning.

These are areas in which the company has greater weight versus a typical IT services company, and the broker expects there is potential for further accretive acquisitions into the first half of FY24.

Target is $1.13. Buy rating maintained.

Target price is $1.13 Current Price is $0.90 Difference: $0.235
If ATA meets the Shaw and Partners target it will return approximately 26% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Shaw and Partners rates AVD as Buy (1) -

Avada Group expect second half underlying EBITDA of $7.5-8.5m, ahead of expectations. The company is experiencing a return to normal operating conditions.

Shaw and Partners expects continued strength in gross margins as a result of pricing and leverage, as operations ramp up to provide support well into FY24.

Estimates are upgraded and the broker retains a Buy rating with the target edging up to $0.95 from $0.90. Further upside can be obtained in the outer years amid continued execution, synergies and NZ expansion.

Target price is $0.95 Current Price is $0.70 Difference: $0.25
If AVD meets the Shaw and Partners target it will return approximately 36% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates BHP as Neutral (3) -

Citi updates modelling as its commodities analysts publish the summer energy outlook, with a global gas price forecast to plunge -50%. Thermal coal benchmark prices are also expected to continue falling. Hard coking coal estimates are also lowered.

Estimates for BHP Group's FY23, FY24 and FY25 EBITDA are reduced by -1%, -5% and -2%, respectively. Neutral maintained. Target is lowered to $43.00 from $43.50.

Target price is $43.00 Current Price is $44.29 Difference: minus $1.29 (current price is over target).
If BHP meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $44.28, suggesting downside of -3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.2

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

Macquarie rates BKT as Outperform (1) -

Black Rock Mining has finalised its $10m equity raising at $11.50 aimed at supporting working capital and Macquarie reports the company considers the debt financing process to be well advanced, with term sheets expected by June 30.

In other news, Black Rock Mining struck a binding offtake agreement with POSCO for 100% of module 1 fines, which has delivered a prepayment of $10m.

The broker considers this to be "highly positive" and positions the company as a key partner and raw material source for POSCO's rapid anode growth outlook. Meanwhile, the company is advancing its Mahenge Graphite Project with a potential life of 26 years.

After accounting for the dilution and the offtake agreement, EPS forecasts fall -17% for FY23 but rise 25% in FY24.

Outperform rating and 28c target price retained.

Target price is $0.28 Current Price is $0.13 Difference: $0.155
If BKT meets the Macquarie target it will return approximately 124% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett rates CGC as Downgrade to Hold from Accumulate (3) -

Ord Minnett downgrades Costa Group's rating to Hold from Accumulate on valuation grounds. Target price is steady at $3.10.

Target price is $3.10 Current Price is $2.73 Difference: $0.37
If CGC meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.94, suggesting upside of 4.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Bell Potter rates CWP as Buy (1) -

Cedar Woods Properties has lowered guidance for FY23 net profit to around $30m, as opposed to prior guidance for meeting or exceeding the FY22 net profit of $37.4m. The reason stems from weather conditions and supply chain constraints which have delayed settlements.

Bell Potter found the news disappointing although believes this needs to be put in context. A delay to settlements, rather than cancellation of sales, means the shortfall should appear in FY24.

Yet to maintain a conservative approach the broker leaves FY24 estimates little changed. Target is reduced to $5.20 from $5.40 and a Buy rating is maintained.

Target price is $5.20 Current Price is $4.80 Difference: $0.4
If CWP meets the Bell Potter target it will return approximately 8% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Macquarie rates DMP as Neutral (3) -

Domino's Pizza Enterprises FY23 trading update revealed same-store growth is tracking below the company's medium-term forecast of 3% to 6% a year (0.2% so far this half) due to a slower than expected recovery in deliveries. Nor has June-half EBIT improved on the first half.

Management's response is to streamline operations. It plans to cut its store network by 15% to 20% (65-70 underperforming stores); exit its loss-making Danish operations and hasten the closure of SE Asia commissary. The measures are expected to yield $53m to $59m in annual savings at a cost of $125m.

Store openings will continue but will be below the medium-term target.

EPS forecasts fall -20.7% in FY23; -9.2% in FY24; and -10.5% in FY25.

Neutral rating retained. Target price falls 13% to $46.

Target price is $46.00 Current Price is $43.55 Difference: $2.45
If DMP meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $53.63, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgan Stanley rates DMP as Overweight (1) -

Morgan Stanley lowers its target for Domino's Pizza Enterprises to $65 from $75 after a second half earnings (EBIT) downgrade revealed ongoing profitability challenges.

While trends were positive for same store sales (SSS), the analyst explains 2H EBIT growth has not recovered compared to the 1H.

Despite the downgrade, the broker sees tailwinds for FY24/25 earnings margins from price deflation, the removal of unprofitable stores and a mix-shift away from corporate stores.

Management will implement cost initiatives including closure of Domino's Denmark and optimisation of the corporate store network. An FY24 earnings benefit of circa $25-30m is anticipated and $53-59m annualised.

The Overweight rating is unchanged. Industry View: In-line.

Target price is $65.00 Current Price is $43.55 Difference: $21.45
If DMP meets the Morgan Stanley target it will return approximately 49% (excluding dividends, fees and charges).

Current consensus price target is $53.63, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Morgans rates DMP as Add (1) -

Morgans lowers its FY23 and FY24 earnings (EBIT) estimates by -12% for Domino's Pizza Enterprises after a trading update revealed disappointing margins. At the sales level, the trading update was better-than-expected.

To overcome inflation, internal inefficiencies and a softer consumer, management intends to generate $53-59m in savings over a two-year period. Tactics include closing the loss making Denmark and franchising or closing underperforming corporate stores.

Morgans feels these plans are achievable and thinks Domino's is capable of staging a comeback, and retains its Add rating. The target price is lowered to $60 from $70.

Target price is $60.00 Current Price is $43.55 Difference: $16.45
If DMP meets the Morgans target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $53.63, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

UBS rates DMP as Downgrade to Sell from Neutral (5) -

In a trading update Domino's Pizza Enterprises indicated same-store sales growth in the second half was 0.2%, down -4.3% on the prior comparable half.

The company has confirmed store openings will not meet its 3-5 year outlook in FY23 or FY24, and it will undertake $53-59m in annualised cost savings with a third to be shared with franchisees.

UBS had previously assumed execution would improve but is now more cautious. Lower rates of near-term organic store growth are incorporated in estimates and lower long-term EBIT margins.

Given the reduced confidence in the growth profile, the broker downgrades to Sell from Neutral. Target is reduced to $40 from $60.

Target price is $40.00 Current Price is $43.55 Difference: minus $3.55 (current price is over target).
If DMP meets the UBS target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $53.63, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Bell Potter rates DOC as Upgrade to Speculative Buy from Hold (1) -

Doctor Care Anywhere has reached agreement on its annual price increase and Bell Potter believes there is reason to expect record revenue generation in the months ahead.

The company expects to launch its mixed clinical workforce this month and has reaffirmed guidance that includes an annualised revenue run rate in the range of GBP42-46m by the end of June.

The loss-making Tasmanian subsidiary has been sold for $3m, having been acquired in 2021 for $11m in scrip and cash. The broker notes expansion into the Australian market was ill-timed as the company lacked the balance sheet to invest.

Rating is upgraded to Speculative Buy from Hold and the target raised to 8c from 6c.

Target price is $0.08 Current Price is $0.05 Difference: $0.034
If DOC meets the Bell Potter target it will return approximately 74% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

This company reports in GBP. 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 DXS as Outperform (1) -

Dexus has exchanged contracts on 44 Market Street Sydney, selling the property at a -17% discount to its December 31 book value, with settlement due in late July.

Macquarie considers the sale to be neutral to adjusted funds from operations and expects more sales will be needed to fund the next round of growth.

The broker also considers the sale to be a plus for valuations compared to those implied in the share price.

Outperform rating retained. Target price inches up to $9.68 from $9.66.

Target price is $9.68 Current Price is $8.00 Difference: $1.68
If DXS meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $9.11, suggesting upside of 15.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Citi rates EVN as Upgrade to Neutral from Sell (3) -

Having visited Cowal and Ernest Henry, Citi is convinced mine life extensions at these high-quality assets are a case of when, not if. The broker upgrades Evolution Mining to Neutral from Sell, believing the end of the operations downgrades has been reached.

Citi remains bullish on precious metals and copper because of the decarbonisation theme, although asserts Evolution Mining still needs to demonstrate it can deliver. Target is raised to $3.30 from $3.10.

Target price is $3.30 Current Price is $3.36 Difference: minus $0.06 (current price is over target).
If EVN 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 $3.36, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Macquarie rates EVN as Underperform (5) -

A Macquarie site visit suggests the Cowal underground ramp up is on track and that the Ernest Henry's life extentsion beyond FY40 has potential in the broker's view, given recent at-depth and long-strike drilling success.

The broker is less certain about the long-term outlook for Red Lake.

The broker believes the update to Ernest Henry's resource estimate in the September quarter will be an important event for the company.

ESP forecasts rise 1% in FY23 and FY24; and rise 8% in FY25; before falling sharply thereafter.

Underperform rating and $3 target price retained.

Target price is $3.00 Current Price is $3.36 Difference: minus $0.36 (current price is over target).
If EVN meets the Macquarie target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.36, suggesting upside of 0.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: -0.3

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

Macquarie rates HAS as Neutral (3) -

Hastings Technology Metals has struck a non-binding offtake agreement with Toronto-listed Neo Performance Materials.

Macquarie says the deal could cover up to 70% of Stage 1 and Stage 2 production.

Hastings has a 19.9% stake in Neo and the broker believes the deal to be supportive for the partnership, which plans to develop a fully integrated mine-to-magnet supply chain.

The broker lowers its capital raising assumptions to $200m at $1.30 to cover pre-production capital costs, which has increased dilution.

EPS forecasts fall -5% in FY24 and -7% in FY25. Neutral rating retained. Target price falls 12% to $1.50.

Target price is $1.50 Current Price is $1.34 Difference: $0.16
If HAS meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.0

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

Macquarie rates HLS as Outperform (1) -

Yesterday Macquarie reviewed the forecast for FY24 from Healius, focusing on the outlook for revenue and operating expenses.

The broker suggests there is material upside to consensus estimates for earnings based on a continued recovery in the volume of pathology and imaging.

Macquarie calculates revenue growth of 6%, capturing reduced covid testing and a modest improvement for Agilex.

The broker continues to believe the business is leveraged to improved activity and the stock attractive at current levels, retaining an Outperform rating. Target edges down to $4.00 from $4.05.

Target price is $4.00 Current Price is $3.21 Difference: $0.79
If HLS meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $3.28, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates IGO as Outperform (1) -

Rio Tinto ((RIO)) CEO of Aluminium, Ivan Vella, has been appointed CEO and Managing Director of IGO, effective December 2023.

Outperform rating retained and $20 target price retained.

Target price is $20.00 Current Price is $14.70 Difference: $5.3
If IGO meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $16.01, suggesting upside of 5.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.2

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

Macquarie rates IMD as Outperform (1) -

Imdex has updated on its operating environment while not providing specific guidance. Activity has only started to pick up in late May whereas, historically, drilling activity has risen from March to June.

Yesterday Macquarie noted the recent slowdown in exploration activity has subdued the company's earnings momentum and created some uncertainty.

Junior miners in Canada and Australia are the most affected by the economic slowdown while activity in Latin America, Africa, Europe and Southeast Asia remains strong, the broker adds.

Outperform rating maintained. Target is reduced to $2.67 from $2.85.

Target price is $2.67 Current Price is $1.79 Difference: $0.885
If IMD meets the Macquarie target it will return approximately 50% (excluding dividends, fees and charges).

Current consensus price target is $2.81, suggesting upside of 54.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Citi rates IPL as Neutral (3) -

Citi believes timing around a potential demerger at Incitec Pivot has likely slipped. Management is expected to provide an update on  timelines in 2023. Further pricing weakness for both DAP and urea are considered near-term risks for deal execution.

The broker lowers its fertiliser price assumptions for FY23/24 and profit estimates fall by -16% on average across the forecast period.

Citi believes a demerger may have incremental upside value, though sees too many near-term uncertainties and retains a Neutral rating. The target falls to $3.00 from $3.15.

Target price is $3.00 Current Price is $2.77 Difference: $0.23
If IPL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $3.40, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.4

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

Bell Potter rates JLG as Buy (1) -

Johns Lyng has quoted US$1.2bn in potential work, while securing US$78m in Hurricane Ian work as part of a US$150m opportunity in US catastrophe work.

Bell Potter notes the engagement with government through disaster management services continues to progress, with the company asserting a recent win in Queensland as preferred supplier for temporary accommodation could set a precedent for further state funding for mitigation programs.

Bell Potter retains a Buy rating and $7.70 target.

Target price is $7.70 Current Price is $6.14 Difference: $1.56
If JLG meets the Bell Potter target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $8.28, suggesting upside of 34.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Macquarie rates MGH as Outperform (1) -

After the investor briefing, Macquarie yesterday noted Maas Group is focused on a returns discipline across its core segments which will underpin long-term growth.

A new capital recycling target of more than $70m in FY24 has been announced which will be delivered from over 10 assets to maintain flexibility and gearing within 2-3x.

The broker assesses the strategic network of assets is well-placed to leverage the infrastructure and growing renewables pipeline. Outperform maintained. Target is $3.50.

Target price is $3.50 Current Price is $2.86 Difference: $0.64
If MGH meets the Macquarie target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Morgans rates MGH as Add (1) -

The uncertain interest rate environment in the real estate market was largely responsible for lower FY23 guidance by Maas Group, explains Morgans.

Management decreased pro forma earnings (EBITDA) guidance by -7% to $150-180m, a miss against the forecasts of the broker and consensus for $167m and $168m, respectively.

The analyst's investment thesis is mostly unchanged as follows: "infrastructure spend in the regions drives job creation and residential housing demand".

The Add rating is unchanged and the target falls to $3.70 from $4.00.

Target price is $3.70 Current Price is $2.86 Difference: $0.84
If MGH meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Ord Minnett - Cessation of coverage

Market Sentiment: 0.0

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

Citi rates MMS as Downgrade to Neutral from Buy (3) -

The South Australian  government has extended McMillan Shakespeare's contract to June 30, 2024, to enable sufficient time to "rigorously evaluate the tender submissions".

Citi considers the extension an indication there are a number of providers that are still in the running. The broker had previously believed the incumbent provider would retain the contract but now assesses renewal may not be straightforward.

Rating is downgraded to Neutral from Buy, reflecting the recent performance of the share price while the target is steady at $16.10.

Target price is $16.10 Current Price is $16.30 Difference: minus $0.2 (current price is over target).
If MMS meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.72, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.5

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

Citi rates NHC as Downgrade to Sell from Neutral (5) -

Citi observes, in line with its base case for a substantial drop in natural gas prices, thermal coal, which competes with gas in power generation, could also experience sizeable downside over the coming quarter.

Besides this, thermal coal market fundamentals are looser because of historically elevated inventory among high calorie value importers and El Nino pointing to a drier and/or warmer climate over the coming months for major exporters, including Colombia and Australia.

The broker downgrades New Hope to Sell from Neutral to reflect outperformance in the share price recently. Target is lowered to $4.00 from $4.80.

Target price is $4.00 Current Price is $5.32 Difference: minus $1.32 (current price is over target).
If NHC meets the Citi target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.46, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in July.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.1

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

Macquarie rates NXT as Outperform (1) -

Macquarie returns from restriction on NextDC with an Outperform rating and $15.80 target price.

The broker says the May trading update met forecasts but sees risk in FY24. Overall though, the broker believes DC demand will win the day.

Target price is $15.80 Current Price is $12.58 Difference: $3.22
If NXT meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $13.77, suggesting upside of 9.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.8

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

Macquarie rates RIO as Neutral (3) -

Rio Tinto plans to expands its AP60 low-carbon aluminium smelting capacity in Canada, just as its chief executive officer and managing director Aluminium Ivan Vella is preparing to leave to head up IGO ((IGO)) in December.

The company's AP60 technology has overcome the challenges of very high amperage smelters, yielding higher productivity and lower emissions. The project has costs US$1.1bn and includes funding from the Quebec government of up to US$113m.

Neutral rating and $122 target price retained.

Target price is $122.00 Current Price is $112.88 Difference: $9.12
If RIO meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $114.08, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.2

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

Morgan Stanley rates RIO as Overweight (1) -

Rio Tinto will invest US$1.1bn to expand its AP60 aluminium smelter in Canada. The announced aluminum capacity (including recycling) and capex are broadly in-line with Morgan Stanley's forecasts.

The broker highlights Rio is aiming to have ELYSIS (carbon-free aluminum) available for installation from 2024 and the production of larger volumes of carbon-free aluminum around two years later.

The Overweight rating and $124.50 target are unchanged in Australia. Industry View: Attractive.

Target price is $124.50 Current Price is $112.88 Difference: $11.62
If RIO meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $114.08, suggesting downside of -1.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.2

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

Macquarie rates SFR as Outperform (1) -

Sandfire Resources advises that high-grade polymetallic mineralisation has been intersected at its Sesmaris prospect, in which the company holds a 51% indirect interest with an earn-in option to 85%.

Macquarie advises one of the better drill results included SES23-047 with an intersection of 43.40m at 1.51% copper, 4.78% zinc, 2.15% lead, and 64.1ppm silver.

All up, the broker says the results point to strong discovery potential in the Iberian Pyrite belt.

Outperform rating and $7.30 target price retained.

Target price is $7.30 Current Price is $6.03 Difference: $1.27
If SFR meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $6.91, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

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

Market Sentiment: 0.4

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

Shaw and Partners rates SMP as Buy (1) -

Amid recent strength in the share price, Shaw and Partners reiterates its high conviction Buy rating. The broker assesses SmartPay has delivered a stellar track record, with Australian business revenue growing to $63.2m in FY23 from $4.5m in FY19 and EBITDA  nearly tripling.

The broker expects continued leverage in the Australian business plus execution on the acquisition opportunity in New Zealand during 2024. Target is steady at $2.35.

Target price is $2.35 Current Price is $1.65 Difference: $0.7
If SMP meets the Shaw and Partners target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

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

Market Sentiment: 1.0

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

Macquarie rates STX as Outperform (1) -

Macquarie hosted an investor call with Strike Energy's management.

The broker asserts Beach Energy's ((BPT)) recent disappointing result at Trigg 1 confirmed the presence of hydrocarbons, which in turn de-risks Strike Energy's South Erregulla 2 and 3 wells.

Outperform rating retained. Target price rises 9% to 60c.

Target price is $0.60 Current Price is $0.45 Difference: $0.15
If STX meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $0.54, suggesting upside of 15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Macquarie rates WEB as Outperform (1) -

In reviewing travel demand yesterday Macquarie noted the outlook for hotel supports a strong FY24 for WebBeds. Despite elevated airfare and hotel pricing consumers are continuing to prioritise travel expenditure.

The broker assesses the Webjet share price is now "consolidating", given its recent outperformance and macro concerns.

The B2B pathway to $10bn in transaction value will be a driver of an ongoing re-rating, the broker adds. Outperform maintained. Target is $8.03, raised from $6.82.

Target price is $8.03 Current Price is $7.16 Difference: $0.87
If WEB meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.58, suggesting upside of 20.7% (ex-dividends)

The company's fiscal year ends in March.

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 WHC as Buy/High Risk (1) -

Citi observes, in line with its base case for a substantial drop in natural gas prices, thermal coal, which competes with gas in power generation, could also experience sizeable downside over the coming quarter.

Besides this, thermal coal market fundamentals are looser because of historically elevated inventory among high calorie value importers and El Nino pointing to a drier and/or warmer climate over the coming months for major exporters, including Colombia and Australia.

While retaining a Buy rating for Whitehaven Coal Citi adds a High Risk, given the bearish outlook for thermal coal in the third quarter of 2023. Target is reduced to $7.80 from $8.70.

Target price is $7.80 Current Price is $6.28 Difference: $1.52
If WHC meets the Citi target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $8.38, suggesting upside of 33.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.7

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

Ord Minnett rates WTC as Downgrade to Hold from Accumulate (3) -

Ord Minnett downgrades WiseTech Global to Hold from Accumulate on valuation grounds. Target price is steady at $90.

Target price is $90.00 Current Price is $79.81 Difference: $10.19
If WTC meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $73.54, suggesting downside of -6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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