Australian Broker Call

Morgan Stanley rates 29M as Initiation of coverage with Overweight (1) -

Morgan Stanley initiates coverage of 29Metals with an Overweight rating and a price target of $3.10.

29Metals comprises two producing assets – Capricorn Copper and Golden Grove – both situated in Australia. The company’s revenue is derived 58% from copper, 24% from zinc, 27% from lead and precious metals, providing significant diversification, the broker comments.

The broker sees the current valuation for 29Metals as compelling, and compensating investors for the associated risks.

Despite risks, Morgan Stanley suspects forecasts are achievable, and the broker's estimates are in-line with the life of mine metal production guidance until calendar year 2028.

Target price is $3.10 Current Price is $2.28 Difference: $0.82
If 29M meets the Morgan Stanley target it will return approximately 36% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

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

Citi rates A2M as Upgrade to Neutral from Sell (3) -

A read through of results from overseas peers revealed to Citi growth in both China Label and China cross-border e-commerce channels, which are typically lower margin for Australian infant formula players.

Competitor Danone's results indicated overall infant nutrition is back to growth in 2Q21, after a negative 1Q21, but the company indicated the lower birth rate is starting to weigh on category growth in China.

Citi upgrades a2 Milk to Neutral from Sell after the recent share price fall. It's felt the current share price is fairly factoring-in both upside and downside risks. The broker retains its $6.05 target price.

Target price is $6.05 Current Price is $5.86 Difference: $0.19
If A2M meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.43, suggesting upside of 6.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

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

Market Sentiment: -0.1

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

Credit Suisse rates AUB as Outperform (1) -

Credit Suisse expects FY21 net profit of $55.9m and a final dividend of $0.38 when the company reports on August 26. The company will report BizCover and ExpressCover separately in the second half.

Given the strength of the first half and a lack of any real deceleration in the third quarter, the broker assumes any risk that exists to guidance is to the upside and retains an Outperform rating and $20 target.

Target price is $20.00 Current Price is $23.05 Difference: minus $3.05 (current price is over target).
If AUB meets the Credit Suisse target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.70, suggesting downside of -5.6% (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

Morgans rates BBT as Add (1) -

According to Morgans, BlueBet Holdings delivered a pleasing fourth quarter update, that was in-line with expectations. There was strong growth in key operational metrics, and net win margins were considered held at healthy levels.

While FY21 turnover and active customers were pre-released, net revenue came in 2% above prospectus. Management noted it was on-track to deliver a record monthly net win in July, driven by the industry’s ongoing migration to the online channel.

Morgans is attracted by the company’s opportunity to increase its Australian market share, and the significant long-term growth potential from its US market entry. The broker lifts its price target to $2.44 from $2.03 and retains its Add rating.

Target price is $2.44 Current Price is $2.23 Difference: $0.21
If BBT meets the Morgans target it will return approximately 9% (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

Citi rates BEN as Neutral (3) -

The re-emergence of lockdowns has created some uncertainty regarding the capital return plans of the banking sector, Citi asserts. The broker expects Bendigo & Adelaide Bank's revenue growth will accelerate to 5.5% driven by strong housing loan growth.

A 23.5c final dividend is anticipated, taking the FY21 pay-out ratio to 56%. Citi retains a Neutral High Risk rating with an $11.10 target. The bank will report its results on August 16.

Target price is $11.10 Current Price is $10.33 Difference: $0.77
If BEN meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $10.42, suggesting downside of -1.1% (ex-dividends)

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

Morgan Stanley rates BRG as Overweight (1) -

Morgan Stanley believes the global demand backdrop continues to be strong, providing upside risk to Breville Group's conservative revenue growth guidance of 12% in second half FY21.

While supply chain constraints are a key risk, the broker thinks Breville can grow revenue faster over the medium term, given the group is reinvesting profits and earlier in its lifecycle.

Overweight rating. Target price $35. Industry: In-line.

Target price is $35.00 Current Price is $32.25 Difference: $2.75
If BRG meets the Morgan Stanley target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $32.93, suggesting downside of -0.8% (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 BUB as Sell (5) -

Despite assessing a positive quarterly update, Citi lowers forecast profit for FY21-23 by -$5m-$11m, due to a slower-than-previously-expected recovery from closed international borders. Also, lower gross margins from bulk ingredient sales and inventory provisions are expected.

Fourth quarter gross sales declined by -2% relative to the previous corresponding period. The broker considers this a significant improvement compared to the third quarter (-40%),  driven by improving momentum in China cross-border e-commerce and corporate daigou.

Citi retains its Sell rating and lowers its target price to $0.33 from $0.35.

Target price is $0.33 Current Price is $0.45 Difference: minus $0.12 (current price is over target).
If BUB meets the Citi target it will return approximately minus 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Citi rates CBA as Neutral (3) -

Citi believes, after six months of successful recovery, uncertainty surrounding the latest lockdown in Sydney has potential to de-rail capital-return plans from the banks.

The broker expects Commonwealth Bank will lead the sector with a $5bn off-market buyback at the upcoming results on August 11 but a more modest $2bn on-market buyback is a potential outcome that cannot be ignored.

Citi expects a final dividend of $1.95 on a 73% pay-out. Neutral rating and $96.75 target maintained.

Target price is $96.75 Current Price is $99.65 Difference: minus $2.9 (current price is over target).
If CBA 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 $89.54, suggesting downside of -11.8% (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

Citi rates CSL as Neutral (3) -

After a read through on CSL's peer Grifols, Citi makes no changes to its forecasts for CSL. It's expected that as plasma collections recover to pre-pandemic levels, the market will focus on the strong underlying demand.

The analyst's FY23 EPS forecast is around 10% ahead of consensus, and at the unchanged $310 target price, it's estimated the stock would trade on an FY23 PE of 32x. This is in-line with historical averages. Citi retains its Neutral rating.

Target price is $310.00 Current Price is $288.91 Difference: $21.09
If CSL meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $302.01, suggesting upside of 2.7% (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

Morgans rates HRL as Add (1) -

While the FY21 result exceeded guidance and Morgans’ forecast, the level of planned investment was greater than expected. Consequently, the broker lowers its FY22 and FY23 earnings (EBITDA) forecasts -11% and -8%, respectively.

Although this will delay the resumption of the return of operating leverage until FY24, management is creating a stronger company over the medium-term, points out the broker. There’s also considered potential to unlock further value upon execution of a software growth strategy.

Morgans lowers its target price to $0.15 from 0.16 and maintains its Add rating.

Target price is $0.15 Current Price is $0.12 Difference: $0.03
If HRL meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Ord Minnett rates IRE as Accumulate (2) -

The company expects its growth strategies in the UK and the superannuation and investment infrastructure will provide net profit of $120m.

The first half update is broadly in line with Ord Minnett's expectations and this confirms a second half skew that is required to achieve FY21 figures.

The company has also disclosed a series of highly conditional indicative bids from private equity at $14.80-15.50 a share. These have been rejected but discussions are continuing. Ord Minnett retains an Accumulate rating and raises the target to $14.50 from $11.27.

Target price is $14.50 Current Price is $14.05 Difference: $0.45
If IRE meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $13.82, suggesting upside of 0.2% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates JHG as Neutral (3) -

June quarter earnings per share of US$1.16 was ahead of Credit Suisse estimates. This was largely driven by performance fees. Outflows continued albeit at a lower rate.

While management is optimistic about further improvement, the broker does not share the same level of enthusiasm as there are pockets of weak fund performance. Neutral maintained. Target is raised to $57.50 from $51.00.

Target price is $57.50 Current Price is $57.76 Difference: minus $0.26 (current price is over target).
If JHG meets the Credit Suisse target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $56.58, suggesting downside of -0.8% (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: 0.3

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

Citi rates MIN as Neutral (3) -

Citi increases its near-term earnings forecasts for higher mark-market iron ore and spodumene prices. In addition, higher multiples are assigned to account for the high-growth lithium business, and less volatile mining services earnings.

Overall, this increases the broker's target price for Mineral Resources to $65 from $51. The Neutral rating is maintained. The company reported June quarter iron ore production 5% ahead of the broker's estimate. 

In mining services, FY21 volumes increased 20% versus the previous corresponding period. The broker expects a continued strong performance of the business with internal volume growth on the Wodgina restart and Wonmunna ramp-up.

Target price is $65.00 Current Price is $63.01 Difference: $1.99
If MIN meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $60.04, suggesting downside of -0.1% (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 MIN as Underweight (5) -

At current levels, Morgan Stanley believes Mineral Resources is pricing in 100% unrisked value for its unapproved Ashburton and South West Creek developments.

The broker also believes the market is ignoring project execution risk and the potential for ongoing elevated low-grade iron ore discounts.

Updates to the broker's model for the June quarter drive changes to earnings per share estimates for FY21, FY22, and FY23 by 0.1%, 8.4%, and 8.6% respectively.

Underweight rating retained and the target increases to $49.70 from $45. Industry view: Attractive.

Target price is $49.70 Current Price is $63.01 Difference: minus $13.31 (current price is over target).
If MIN meets the Morgan Stanley target it will return approximately minus 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $60.04, suggesting downside of -0.1% (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

Ord Minnett rates MIN as Hold (3) -

Iron ore production and shipments were in line with forecasts in the June quarter. An achieved price of US$178/t was weaker than Ord Minnett expected, partially because of a lower lump portion at Yilgarn.

Mount Marion spodumene sales were higher than forecast and materially exceeded production estimates. Ord Minnett maintains a Hold rating and raises the target to $66 from $65.

Target price is $66.00 Current Price is $63.01 Difference: $2.99
If MIN meets the Ord Minnett target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $60.04, suggesting downside of -0.1% (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

Macquarie rates NAB as Outperform (1) -

National Australia Bank will buy back up to $2.5bn on-market. Macquarie assesses this announcement further reaffirms a level of comfort from the regulator regarding bank capital that allows for buybacks to proceed despite the current economic uncertainty.

The quantum is marginally ahead of what the broker anticipated yet in total the bank is expected to return around $5.5bn over the next three years. Outperform maintained. Target is steady at $28.

Target price is $28.00 Current Price is $25.93 Difference: $2.07
If NAB meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in September.

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

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

National Australia Bank will commence a $2.5bn on-market buyback in mid-to-late August, which will reduce the share count by -3%.

Morgan Stanley expects further buybacks in 2022-23, as the bank will "continue to assess various options to return capital" and the finalisation of APRA's new capital framework will provide "improved clarity to consider further capital management initiatives".

Equal-weight rating, $27.20 target price, and industry view: In-Line.

Target price is $27.20 Current Price is $25.93 Difference: $1.27
If NAB meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates NAB as Upgrade to Add from Hold (1) -

Morgans upgrades its rating to Add from Hold in light of recent share price weakness, and after the bank announced an on-market buyback of up to $2.5bn of shares. 

The broker sees potential for further capital management, especially after management said it “will continue to assess various options to return capital to shareholders.”

The analyst believes this should boost investor confidence in the strength of major bank balance sheets, as well as boost confidence in the asset quality outlook for the sector. Morgans retains its $27.50 target price.

Target price is $27.50 Current Price is $25.93 Difference: $1.57
If NAB meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in September.

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

Ord Minnett rates NAB as Hold (3) -

National Australia Bank will conduct a $2.5bn on-market buyback from mid-late August. While a little earlier than Ord Minnett expected, $4.5bn in buybacks is already incorporated in forecasts.

The broker had expected the bank would wait until its results in November given the uncertainty around whether AUSTRAC will impose a penalty for anti-money laundering breaches.

Post the buyback, the broker assesses the March 2021 pro forma common equity tier one (CET1) ratio should still be strong at 12.15%. Hold rating and $27.80 target maintained.

Target price is $27.80 Current Price is $25.93 Difference: $1.87
If NAB meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $27.38, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in September.

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

Morgans rates NVX as Add (1) -

Fourth quarter results for Novonix showed Morgans significantly higher cash receipts from customers and smaller spend on administration costs. 

However, given delays in completing the Samsung quality audit and initial 500t contract, the analyst defers a previously-assumed sales ramp-up of anode material in FY22. The broker lowers its target price to $3.34 from $3.70 and retains its Speculative Buy rating.

Morgans still thinks the company is well placed to meet growing North American demand for battery anodes. There’s also considered potential upside from some compelling technology (DPMG) that has been developed internally, to reduce the costs of producing battery cathodes.  

Target price is $3.34 Current Price is $2.58 Difference: $0.76
If NVX meets the Morgans 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: 1.0

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

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

Production in the June quarter was in line with forecasts. New guidance for FY22 energy markets operating earnings (EBITDA) of $450-600m is lower than Credit Suisse estimated, while FY23 at $600-850m is ahead of estimates.

The broker argues a FY22 free cash flow yield of 17.2% and dividend yield of 6.1% while reasonable does not stand out in terms of value.

Utilities are expected to continue facing difficult conditions although Credit Suisse suspects FY22 will be the trough. Rating is upgraded to Outperform from Neutral and the target raised to $4.80 from $4.50.

Target price is $4.80 Current Price is $4.11 Difference: $0.69
If ORG meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting upside of 16.2% (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 ORG as Outperform (1) -

The main positive Macquarie took from the fourth quarter result was APLNG, where production was 173PJ taking it to 701PJ for the year. Yet this is where it stops as Origin Energy has brought $670m in liabilities back onto the balance sheet.

Energy market earnings forecasts in FY22 are also at the lower end of the broker's expectations. Hence, pressure continues on the balance sheet although Macquarie anticipates the cash being generated from APLNG should enable the company to meet its target of 2-3x net debt/EBITDA.

Outperform rating and $5.08 target retained.

Target price is $5.08 Current Price is $4.11 Difference: $0.97
If ORG meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting upside of 16.2% (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 ORG as Equal-weight (3) -

Origin Energy released energy markets (EM) earnings guidance of $450-600m for FY22 and $600-850m for FY23.

Origin left FY21 EM guidance of $940-1,020m unchanged, implying a fall of 46% year-on-year at the midpoint, which the company attributed to falling electricity prices and rising fuel costs which partially ease in FY23.

Morgan Stanley anticipates a negative reaction to Origin's EM guidance, which the broker also views as having a negative read-through to AGL Energy ((AGL)).

The Equal-weight rating and $4.88 target are maintained. Industry view: Cautious.

Target price is $4.88 Current Price is $4.11 Difference: $0.77
If ORG meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting upside of 16.2% (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

Morgans rates ORG as Add (1) -

Origin Energy is writing off around -$1.6bn (non-cash) from its generation fleet, and has guided for significantly lower Energy Markets earnings (EBITDA) in FY22. However, the strength of APLNG’s cashflows is also requiring it to book additional future tax charges.

The analyst explains the earnings (EBITDA) reduction is partially offset by reduced sustaining capital expectations, though the net effect is reduced forecast net cash flow of $285m.

The downgrade to Energy Markets is more than offset by higher assumed prices received by APLNG in the short-term, explains the broker. Morgans retains its Add rating, given the negative market reaction to the news though lowers its target to $5.29 from $5.79.

Target price is $5.29 Current Price is $4.11 Difference: $1.18
If ORG meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting upside of 16.2% (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 ORG as Downgrade to Hold from Buy (3) -

Production and sales in the June quarter were ahead of Ord Minnett's forecasts. FY22 and FY23 forecasts are for EBITDA of $450-600m and $600-850m, respectively.

Ord Minnett had been cautiously optimistic, given the recent strength in commodity prices, but had not anticipated the business would be affected by higher fuel costs to the extent it has.

The announcement marks a series of successive weak full year results and the broker finds it challenging to remain positive on the stock. Rating is downgraded to Hold from Buy and the target lowered to $4.60 from $5.45.

Target price is $4.60 Current Price is $4.11 Difference: $0.49
If ORG meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.94, suggesting upside of 16.2% (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 OSH as Equal-weight (3) -

Morgan Stanley believes the revised merger proposal Oil Search has received from Santos ((STO)) looks sensible for both sets of shareholders.

The revised proposal of 0.6275 new Santos shares for every Oil Search share held reflects a 19.7% premium - previously 12% - to Oil Search’s 24 June 2021 share price. This implies a share price of $4.52/share for Oil Search based on Santos’ share price of $7.20/share on 24 June 2021.

The broker notes since then Santos’ share price has decreased to $6.45 as of Friday 30 July 2021 close, which implies $4.05/share for Oil Search today.

Equal-weight. Target is $4.50. Industry view: Attractive.

Target price is $4.50 Current Price is $3.81 Difference: $0.69
If OSH meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $4.57, suggesting upside of 14.1% (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: 0.5

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

Morgan Stanley rates OZL as Overweight (1) -

With the share price reflecting Morgan Stanley's expectations and with the stock now largely being driven by copper price, the broker has downgraded OZ Minerals to Equal-weight from Overweight.

The broker forecasts a 7.1x EV/earnings in calendar year 2022 which is slightly higher than OZ Minerals' three-year average of 6.5x indicating the stock is close to fair value.

The strong second-quarter result and increased guidance lift the broker's calendar year 2021 and calendar year 2022 earnings per share estimates.

Overweight rating. Target price is $25.40. Industry view: Attractive.

Target price is $25.40 Current Price is $23.18 Difference: $2.22
If OZL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $24.20, suggesting upside of 5.3% (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

Morgan Stanley rates RMS as Overweight (1) -

Morgan Stanley believes a substantial 27% increase in life of mine (LOM) production at a low LOM all-in cost - $1440-1560/oz, lower in earlier years - as Ramelius Resources pushes mine life towards a decade.

The broker notes long-life baseload ore increases visibility and investability with the opportunity to continually add high-grade sweeteners over the life of the mine.

Ramelius expects further exploration of high-grade ore could add to baseload and potentially maintain production over 250,000/oz p.a from FY26 onwards.

Overweight maintained with a target price increasing to $2.30 from $2.20. Industry View: Attractive.

Target price is $2.30 Current Price is $1.71 Difference: $0.59
If RMS meets the Morgan Stanley target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting upside of 21.3% (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

Citi rates RSG as Neutral (3) -

Resolute Mining's third quarter gold production was -14% below Citi's estimate. Although management highlighted record mining rates at Syama Sulphide and milling at Syama Oxide, it wasn’t considered enough to offset lower grades.

The company trimmed guidance for the Syama Operations, while maintaining Mako guidance. The broker lowers its target price to $0.60 from $0.70 on the lower guidance and changed gold price assumptions. Citi retains its Neutral rating.

Target price is $0.60 Current Price is $0.54 Difference: $0.06
If RSG meets the Citi target it will return approximately 11% (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: 0.0

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

Credit Suisse rates SDF as Outperform (1) -

Ahead of the results on August 20, Credit Suisse is forecasting net profit before minorities of $151.3m and a final dividend of 6.5c. The company had upgraded guidance following an "excellent" third quarter and this suggests to the broker that activity is accelerating.

The broker continues to envisage upside risk from organic tailwinds, notwithstanding some cost catch up in the fourth quarter. Outperform rating and $4.60 target maintained.

Target price is $4.60 Current Price is $4.44 Difference: $0.16
If SDF meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.67, suggesting upside of 4.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.9

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

Macquarie rates SVW as Outperform (1) -

Macquarie notes Seven Group now has 70% ownership of Boral ((BLD)) and the offer is closed. The broker does not believe leverage will be a concern for the company as FY22 net debt/EBITDA is similar or better than prior to the takeover bid.

Macquarie considers the valuation attractive and retains an Outperform rating and $30.41 target.

Target price is $30.41 Current Price is $23.25 Difference: $7.16
If SVW meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $27.87, suggesting upside of 18.2% (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 TPG as Overweight (1) -

Morgan Stanley thinks just the possibility for a sale of either mobile towers or TPG Telecom's wider infrastucture assets could prove a positive catalyst for the stock. This comes after Telstra's ((TLS)) recent sale and leaseback of its mobile towers.

The analyst estimates a potential incremental positive. The company owns a significantly smaller mobile tower portfolio than Telstra though, importantly, does own substantially wider telco infrastructure assets.

The Overweight rating and target price $9.50 target are retained. Industry view: In-line.

Target price is $9.50 Current Price is $6.18 Difference: $3.32
If TPG meets the Morgan Stanley target it will return approximately 54% (excluding dividends, fees and charges).

Current consensus price target is $7.55, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in December.

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

Citi rates WBC as Buy (1) -

Citi believes Westpac is now more attractive, amid greater leverage to capital management, divestments and cost reductions.

The main risk is, with a lower-quality deposit-gathering franchise, the broker assesses Westpac has a greater reliance on wholesale funding.

Citi raises the target to $30 and maintains a Buy rating.

Target price is $30.00 Current Price is $24.52 Difference: $5.48
If WBC meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $28.37, suggesting upside of 13.3% (ex-dividends)

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 WPR as Underweight (5) -

Waypoint REIT's has just released details on various initiatives, including upward reval of its portfolio by $190m, backed by cap rate compressing 19bps to 5.37% and lifting net tangible asset NTA) to $2.75.

Also released were details of the investment of 31 non-core assets at 10% above book value for $114m - that's 4% of portfolio - and a $75m buy-back, up to $150m capital return, and share consolidation.

While Morgan Stanley believes the buyback suggests good discipline, the broker also suspects it implies limited growth strategies for the REIT.

While Morgan Stanley is not saying Waypoint should grow for the sake of growing, the broker notes companies recycling, rather than returning, capital are perhaps more attractive to equities investors.

Underweight rating with a target of $2.50. Industry view is In-Line.

Target price is $2.50 Current Price is $2.63 Difference: minus $0.13 (current price is over target).
If WPR meets the Morgan Stanley target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.81, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

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

Ord Minnett rates WPR as Buy (1) -

Waypoint REIT will sell 31 non-core assets at a 10% premium to the December 2020 carrying value. There are also $150m in capital management initiatives announced, including up to a $75m on-market buyback.

Ord Minnett considers the announcements a positive step, particularly the strong results achieved on non-core asset sales. Buy rating retained. Target rises to $3.00 from $2.95.

Target price is $3.00 Current Price is $2.63 Difference: $0.37
If WPR meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $2.81, suggesting upside of 6.3% (ex-dividends)

The company's fiscal year ends in December.

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