Australian Broker Call
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June 06, 2024
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
GMD - | Genesis Minerals | Upgrade to Accumulate from Hold | Ord Minnett |
LOV - | Lovisa Holdings | Upgrade to Outperform from Neutral | Macquarie |
NST - | Northern Star Resources | Downgrade to Hold from Accumulate | Ord Minnett |
SFR - | Sandfire Resources | Downgrade to Hold from Accumulate | Ord Minnett |
Overnight Price: $0.90
Bell Potter rates A4N as Speculative Buy (1) -
Alpha HPA reported the release of the HPA First Project Stage 2 final Definiftive Feasability Study and the board's final investment decision as well as completing a $175m equity placement supporting the project funding.
Bell Potter points to production capacity of 10,430tpa and annualised EBITDA of $255-403m, with the project expected to be commissioned by mid-2026.
The broker also notes Alpha HPA is developing a downstream synthetic sapphire glass subsidiary and adjusts earnings for the update.
Speculative Buy rating. Target price raised to $2 from $1.95.
Target price is $2.00 Current Price is $0.90 Difference: $1.105
If A4N meets the Bell Potter target it will return approximately 123% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 1.70 cents. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of 8.40 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ARB ARB CORPORATION LIMITED
Automobiles & Components
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Overnight Price: $38.60
Ord Minnett rates ARB as Buy (1) -
Based on the ongoing strength in new vehicle sales, especially in the 4WD and SUV segments, and a robust order book, up 5.1% in May and 12.2% for the first five months of 2024, Ord Minnett is confident on the outlook for ARB Corp in the 2H24.
The broker highlighted management's expansion plans, which include increasing the number of stores in Australia and further growth in international markets.
Buy rating and $44 target maintained.
Target price is $44.00 Current Price is $38.60 Difference: $5.4
If ARB meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $40.58, suggesting upside of 6.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 69.50 cents and EPS of 130.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 127.9, implying annual growth of 18.5%. Current consensus DPS estimate is 68.4, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 29.9. |
Forecast for FY25:
Ord Minnett forecasts a full year FY25 dividend of 78.00 cents and EPS of 141.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 140.8, implying annual growth of 10.1%. Current consensus DPS estimate is 75.6, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 27.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.20
Bell Potter rates COE as Hold (3) -
At the Cooper Energy investor briefing, management emphasised ongoing efforts to enhance production at the Orbost facility and tap into strong demand in the southeast coast gas markets, Bell Potter reports.
Bell Potter notes the company's growth strategy includes the Otway East Coast Supply Project, which aims to increase production.
Management also highlighted plans to expand its role in energy peaking markets and explore renewable energy and carbon capture initiatives.
The broker asserted questions remain about the alignment with joint venture partner Mitsui and the expected capital cost for the East Coast Supply Project.
Bell Potter retains a Hold rating and 21c target price. No changes made to the analyst's earnings forecasts.
Target price is $0.21 Current Price is $0.20 Difference: $0.01
If COE meets the Bell Potter target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $0.27, suggesting upside of 35.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 0.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 33.3. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of 0.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1.2, implying annual growth of 100.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 16.7. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $26.68
UBS rates CPU as Buy (1) -
UBS refreshes earnings forecasts for Computershare due to higher interest rates/bond yields and strong indications of higher activity, notably in the US and EU markets.
Global corporate transaction volumes have increased 23% over the past six months, the broker observes, with robust M&A activity offsetting weaker IPO volumes, which suggests strong 2H24 fee growth for Computershare.
The broker calculates every 10% rise in corporate actions equates to circa $35m in annual revenues.
The recent BNY Canada acquisition and the early sale of Mortgage Services have been incorporated into the latest earnings forecasts from UBS. EPS estimates are lifted 1% in FY24 and 7.8% in FY25.
The target is lifted to $32 from $31, with a Buy rating.
Target price is $32.00 Current Price is $26.68 Difference: $5.32
If CPU meets the UBS target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $29.14, suggesting upside of 8.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
UBS forecasts a full year FY24 EPS of 179.74 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 175.7, implying annual growth of N/A. Current consensus DPS estimate is 84.0, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 15.3. |
Forecast for FY25:
UBS forecasts a full year FY25 EPS of 193.45 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 192.7, implying annual growth of 9.7%. Current consensus DPS estimate is 89.8, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 14.0. |
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
Overnight Price: $1.57
Macquarie rates FCL as Outperform (1) -
Macquarie observes an upgrade to comparable company Guidewire's guidance for FY24 implies a continued positive outlook for Fineos Corp.
Sustained cash flow is expected and the catalysts for the company will now be new contract wins. The Outperform rating and $2.22 target are unchanged.
Target price is $2.22 Current Price is $1.57 Difference: $0.65
If FCL meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.96 cents. |
Forecast for FY25:
Macquarie forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 1.16 cents. |
This company reports in EUR. 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
Overnight Price: $1.18
Morgans rates GDF as Add (1) -
Garda Property has updated FY24 guidance amid increased income from its lending and the impact of the ongoing buyback.
The payout ratio for the distribution is now expected to be 99% compared with 105% previously although guidance of 6.3 cents is unchanged. This implies a yield of 5.4%.
Morgans notes asset sales have been a key focus, with the company exiting all Melbourne office properties. Proceeds have been applied to debt reduction, while improved balance sheet capacity will be available for Brisbane industrial projects.
The Add rating and $1.65 target are unchanged.
Target price is $1.65 Current Price is $1.18 Difference: $0.47
If GDF meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 6.30 cents and EPS of 6.30 cents. |
Forecast for FY25:
Morgans forecasts a full year FY25 dividend of 6.40 cents and EPS of 6.40 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.83
Ord Minnett rates GMD as Upgrade to Accumulate from Hold (2) -
Post a rally of 19% in the gold price and 15% in the copper price year-to-date, Ord Minnett reassesses the outlook for gold and copper miners.
The analyst highlights a "disproportionate" rise in copper equities compared to gold, outperforming by 29%, which has opened up an opportunity in terms of value in some gold stocks.
Ord Minnett upgrades Genesis Minerals to Accumulate from Hold.
Target price is $1.85 Current Price is $1.83 Difference: $0.02
If GMD meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $2.06, suggesting upside of 6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 0.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.0, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 48.3. |
Forecast for FY25:
Ord Minnett forecasts a full year FY25 dividend of 0.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.2, implying annual growth of 105.0%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 23.5. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
JHX JAMES HARDIE INDUSTRIES PLC
Building Products & Services
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Overnight Price: $46.34
UBS rates JHX as Buy (1) -
UBS notes a decline in the market share for fibre cement in the US, the first on record. The main driver, in the broker's opinion, is regional strength in the southern states for "tract" builders where brick has a dominant share.
While the headline is disappointing, the data are backward looking and regional factors were the larger drivers of the change, the broker explains.
James Hardie is focused on contractors and contractor share has grown while the north-east data reveal a positive outlook for when the renovations market recovers, UBS comments. Buy rating and $60 target maintained.
Target price is $60.00 Current Price is $46.34 Difference: $13.66
If JHX meets the UBS target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $55.48, suggesting upside of 20.2% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY25:
UBS forecasts a full year FY25 dividend of 0.00 cents and EPS of 243.72 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 238.9, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 19.3. |
Forecast for FY26:
UBS forecasts a full year FY26 dividend of 147.75 cents and EPS of 292.46 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 284.4, implying annual growth of 19.0%. Current consensus DPS estimate is 36.4, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 16.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $30.53
Macquarie rates LOV as Upgrade to Outperform from Neutral (1) -
Macquarie continues to base its investment view on the strength of Lovisa Holdings' store roll-out and revenue growth.
Earnings expansion is expected over the next five years, supported by operating leverage and reduced LTI incentive payments (the current CEO has earned $51.1m in LTI performance payments).
A change at the executive level is not expected to impact revenue and store growth. Revenue growth has outpaced store openings over the past five years, with a compound rate of 22.4%, and is expected to continue to FY28.
Macquarie upgrades to Outperform from Neutral and raises the target to $33.70 from $26.90.
Target price is $33.70 Current Price is $30.53 Difference: $3.17
If LOV meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $31.01, suggesting downside of -1.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 74.30 cents and EPS of 76.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.7, implying annual growth of 19.7%. Current consensus DPS estimate is 72.2, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 41.5. |
Forecast for FY25:
Macquarie forecasts a full year FY25 dividend of 87.80 cents and EPS of 101.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.8, implying annual growth of 33.2%. Current consensus DPS estimate is 83.8, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 31.2. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MIN MINERAL RESOURCES LIMITED
Mining Sector Contracting
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Overnight Price: $69.55
Citi rates MIN as Buy (1) -
Mineral Resources has initiated a sell down of 49% of the Onslow Haul Road for $1.3bn to Morgan Stanley Infrastructure Partners, which is slightly better than Citi had expected. The broker considers this a vote of confidence in the project.
While the deal is subject to review by the Foreign Investment Review Board, the broker notes MSIP has had previous stakes in Australian domiciled assets. Buy rating and $79 target retained.
Target price is $79.00 Current Price is $69.55 Difference: $9.45
If MIN meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $74.29, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 20.00 cents and EPS of 84.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 119.0, implying annual growth of -6.6%. Current consensus DPS estimate is 21.8, implying a prospective dividend yield of 0.3%. Current consensus EPS estimate suggests the PER is 58.0. |
Forecast for FY25:
Citi forecasts a full year FY25 dividend of 0.00 cents and EPS of 50.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 291.7, implying annual growth of 145.1%. Current consensus DPS estimate is 116.4, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 23.7. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates MIN as Outperform (1) -
Macquarie envisages some downside over the medium term for the Mineral Resources iron ore commodity basket, although is constructive regarding lithium.
The company has executed a 49% sell down of its Onslow Haul Road for $1.3bn to Morgan Stanley Infrastructure Partners. The broker considers this a fair valuation, although was unimpressed the sell down went beyond 39.7%.
The company has indicated capital recycling may fund the gas business or other high-returning projects. The target is reduced to $75 from $78 on a weaker earnings outlook. Outperform maintained.
Target price is $75.00 Current Price is $69.55 Difference: $5.45
If MIN meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $74.29, suggesting upside of 7.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 40.00 cents and EPS of 112.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 119.0, implying annual growth of -6.6%. Current consensus DPS estimate is 21.8, implying a prospective dividend yield of 0.3%. Current consensus EPS estimate suggests the PER is 58.0. |
Forecast for FY25:
Macquarie forecasts a full year FY25 dividend of 198.00 cents and EPS of 531.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 291.7, implying annual growth of 145.1%. Current consensus DPS estimate is 116.4, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 23.7. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NST NORTHERN STAR RESOURCES LIMITED
Gold & Silver
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Overnight Price: $14.35
Ord Minnett rates NST as Downgrade to Hold from Accumulate (3) -
Post a rally of 19% in the gold price and 15% in the copper price year-to-date, Ord Minnett reassesses the outlook for gold and copper miners.
The analyst highlights a "disproportionate" rise in copper equities compared to gold, outperforming by 29%, which has opened up an opportunity in terms of value in some gold stocks.
Ord Minnett downgrades Northern Star Resources to Hold from Accumulate.
Target price is $15.60 Current Price is $14.35 Difference: $1.25
If NST meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $15.97, suggesting upside of 9.8% (ex-dividends)
Forecast for FY24:
Current consensus EPS estimate is 49.1, implying annual growth of -3.3%. Current consensus DPS estimate is 32.4, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 29.6. |
Forecast for FY25:
Current consensus EPS estimate is 103.3, implying annual growth of 110.4%. Current consensus DPS estimate is 44.3, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.44
Ord Minnett rates RED as Buy (1) -
Post a rally of 19% in the gold price and 15% in the copper price year-to-date, Ord Minnett reassesses the outlook for gold and copper miners.
The analyst highlights a "disproportionate" rise in copper equities compared to gold, outperforming by 29%, which has opened up an opportunity in terms of value in some gold stocks.
Red 5 is added to the conviction list for Ord Minnett and Ramelius Resources ((RMS)) is removed after a 28% rise since its additon to the list.
Target price is $0.46 Current Price is $0.44 Difference: $0.025
If RED meets the Ord Minnett target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 0.00 cents. |
Forecast for FY25:
Ord Minnett forecasts a full year FY25 dividend of 0.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.94
Ord Minnett rates RMS as Buy (1) -
Post a rally of 19% in the gold price and 15% in the copper price year-to-date, Ord Minnett reassesses the outlook for gold and copper miners.
The analyst highlights a "disproportionate" rise in copper equities compared to gold, outperforming by 29%, which has opened up an opportunity in terms of value in some gold stocks.
Ramelius Resources is removed from the conviction list for Ord Minnett and Red 5 ((RED)) is added..
Target price is $2.30 Current Price is $1.94 Difference: $0.365
If RMS meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $2.21, suggesting upside of 12.8% (ex-dividends)
Forecast for FY24:
Current consensus EPS estimate is 18.2, implying annual growth of 161.9%. Current consensus DPS estimate is 3.0, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 10.8. |
Forecast for FY25:
Current consensus EPS estimate is 19.8, implying annual growth of 8.8%. Current consensus DPS estimate is 2.5, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 9.9. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $23.78
Ord Minnett rates SEK as Lighten (4) -
Ord Minnett updates its target price for Seek to $20 from $19 post the company announcement to divest the Latin American businesses, which the analyst hopes will translate into stronger management focus and execution in the core markets.
The transaction, worth US$85m, is anticipated towards the end of June, with the expected proceeds used to retire debt which Ord Minnett assesses as too high for such a cyclical type of business.
Lighten.
Target price is $19.00 Current Price is $23.78 Difference: minus $4.78 (current price is over target).
If SEK meets the Ord Minnett target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $27.10, suggesting upside of 16.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 23.00 cents and EPS of 29.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 48.2, implying annual growth of -83.3%. Current consensus DPS estimate is 37.5, implying a prospective dividend yield of 1.6%. Current consensus EPS estimate suggests the PER is 48.1. |
Forecast for FY25:
Ord Minnett forecasts a full year FY25 dividend of 38.00 cents and EPS of 47.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 68.6, implying annual growth of 42.3%. Current consensus DPS estimate is 52.0, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 33.8. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.86
Ord Minnett rates SFR as Downgrade to Hold from Accumulate (3) -
Post a rally of 19% in the gold price and 15% in the copper price year-to-date, Ord Minnett reassesses the outlook for gold and copper miners.
The analyst highlights a "disproportionate" rise in copper equities compared to gold, outperforming by 29%, which has opened up an opportunity in terms of value in some gold stocks.
Ord Minnett downgrades Sandfire Resources to Hold from Accumulate.
Target price is $10.00 Current Price is $8.86 Difference: $1.14
If SFR meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $9.37, suggesting upside of 3.3% (ex-dividends)
Forecast for FY24:
Current consensus EPS estimate is -0.7, implying annual growth of N/A. Current consensus DPS estimate is 1.1, implying a prospective dividend yield of 0.1%. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY25:
Current consensus EPS estimate is 62.1, implying annual growth of N/A. Current consensus DPS estimate is 11.6, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 14.6. |
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
TPW TEMPLE & WEBSTER GROUP LIMITED
Furniture & Renovation
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Overnight Price: $9.47
Citi rates TPW as Buy (1) -
Citi expects margins for Temple & Webster will increase to 5% in FY26 with the main drivers being operating leverage from employee expenses and a stepping down of marketing expenditure.
The broker assumes there is a certain level of marketing expenditure at which further spending no longer yields a satisfactory return.
Longer term forecasts, on the other hand, are adjusted for a more gradual increase in profitability, and while the broker concludes the business is executing well, it needs to keep on performing. Buy rating retained. Target is reduced to $11 from $12.
Target price is $11.00 Current Price is $9.47 Difference: $1.53
If TPW meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $11.45, suggesting upside of 19.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 3.8, implying annual growth of -44.3%. Current consensus DPS estimate is 0.1, implying a prospective dividend yield of 0.0%. Current consensus EPS estimate suggests the PER is 251.8. |
Forecast for FY25:
Citi forecasts a full year FY25 dividend of 0.00 cents and EPS of 4.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.7, implying annual growth of 76.3%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 142.8. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $11.99
Macquarie rates TWE as Outperform (1) -
Macquarie envisages significant growth opportunities in both the US and China for Treasury Wine Estates over the short to medium term.
The company has reaffirmed guidance for mid to high single-digit growth over FY24 and will split Treasury Americas into luxury and premium portfolios with Macquarie expecting the opportunity exists in leveraging the Penfolds model.
DAOU is expected to drive growth with management rolling out a strategy for the brand that will focus on expanding the US distribution. Outperform rating retained. Target is unchanged at $13.80.
Target price is $13.80 Current Price is $11.99 Difference: $1.81
If TWE meets the Macquarie target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $13.54, suggesting upside of 12.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 36.80 cents and EPS of 53.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.6, implying annual growth of 50.7%. Current consensus DPS estimate is 35.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 22.9. |
Forecast for FY25:
Macquarie forecasts a full year FY25 dividend of 42.80 cents and EPS of 61.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.9, implying annual growth of 21.5%. Current consensus DPS estimate is 42.6, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 18.9. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates TWE as Overweight (1) -
Treasury Wine Estates has provided an update on FY24 guidance which allays any concerns around the stability of the US premium wine portfolio, Morgan Stanley ascertains.
Destocking is largely expected to have run its course. Cost synergies for DAOU will be driven by the utilisation of the existing bottling and winery assets, with the majority of that brand's growth to come from volume and distribution outside of California.
The broker assesses the US$20m in cost synergies are "very achievable". Overweight rating and $14.50 target price retained. Industry view: In-line.
Target price is $14.50 Current Price is $11.99 Difference: $2.51
If TWE meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $13.54, suggesting upside of 12.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Morgan Stanley forecasts a full year FY24 dividend of 34.20 cents and EPS of 53.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.6, implying annual growth of 50.7%. Current consensus DPS estimate is 35.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 22.9. |
Forecast for FY25:
Morgan Stanley forecasts a full year FY25 dividend of 44.00 cents and EPS of 65.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.9, implying annual growth of 21.5%. Current consensus DPS estimate is 42.6, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 18.9. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates TWE as Buy (1) -
UBS concluded from the recent Treasury Wine Estates Investor Day at the DAOU's Raso Robles winery, management will continue to focus on the Americas' luxury repositioning and the continued growth of Penfolds in China.
Management sees a stablisation in the US wine industry, reports the broker, despite some ongoing de-stocking and envisages no further acquisitions.
The broker notes Treasury Wine Estates has not successfully leveraged the Penfolds distribution network to grow other brands, but management expects more success for DAOU and BV in the future.
Buy rating retained with a $15 target price. No changes to earnings forecast.
Target price is $15.00 Current Price is $11.99 Difference: $3.01
If TWE meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $13.54, suggesting upside of 12.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
UBS forecasts a full year FY24 dividend of 35.00 cents and EPS of 54.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 52.6, implying annual growth of 50.7%. Current consensus DPS estimate is 35.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 22.9. |
Forecast for FY25:
UBS forecasts a full year FY25 dividend of 41.00 cents and EPS of 64.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.9, implying annual growth of 21.5%. Current consensus DPS estimate is 42.6, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 18.9. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $125.93
Citi rates XRO as Buy (1) -
Xero has announced price increases in New Zealand with the business edition pricing up 6%. Citi expects this to translate to an increase in ARPU of 6%.
Overall, the increase may signal a slight increase to the broker's forecast for second half FY25 ARPU, although this will depend on where the new subscriber mix comes into play. Buy. Target of $158.20 is unchanged.
Target price is $158.20 Current Price is $125.93 Difference: $32.27
If XRO meets the Citi target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $140.82, suggesting upside of 9.8% (ex-dividends)
Forecast for FY25:
Current consensus EPS estimate is 145.6, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 88.0. |
Forecast for FY26:
Current consensus EPS estimate is 193.7, implying annual growth of 33.0%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 0.1%. Current consensus EPS estimate suggests the PER is 66.2. |
This company reports in NZD. 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
Today's Price Target Changes
Company | Last Price | Broker | New Target | Prev Target | Change | |
A4N | Alpha HPA | $0.88 | Bell Potter | 2.00 | 1.95 | 2.56% |
CPU | Computershare | $26.94 | UBS | 32.00 | 31.00 | 3.23% |
LOV | Lovisa Holdings | $31.44 | Macquarie | 33.70 | 26.90 | 25.28% |
MIN | Mineral Resources | $69.00 | Macquarie | 75.00 | 78.00 | -3.85% |
TPW | Temple & Webster | $9.57 | Citi | 11.00 | 12.00 | -8.33% |
TWE | Treasury Wine Estates | $12.07 | UBS | 15.00 | 15.05 | -0.33% |
Summaries
A4N | Alpha HPA | Speculative Buy - Bell Potter | Overnight Price $0.90 |
ARB | ARB Corp | Buy - Ord Minnett | Overnight Price $38.60 |
COE | Cooper Energy | Hold - Bell Potter | Overnight Price $0.20 |
CPU | Computershare | Buy - UBS | Overnight Price $26.68 |
FCL | Fineos Corp | Outperform - Macquarie | Overnight Price $1.57 |
GDF | Garda Property | Add - Morgans | Overnight Price $1.18 |
GMD | Genesis Minerals | Upgrade to Accumulate from Hold - Ord Minnett | Overnight Price $1.83 |
JHX | James Hardie Industries | Buy - UBS | Overnight Price $46.34 |
LOV | Lovisa Holdings | Upgrade to Outperform from Neutral - Macquarie | Overnight Price $30.53 |
MIN | Mineral Resources | Buy - Citi | Overnight Price $69.55 |
Outperform - Macquarie | Overnight Price $69.55 | ||
NST | Northern Star Resources | Downgrade to Hold from Accumulate - Ord Minnett | Overnight Price $14.35 |
RED | Red 5 | Buy - Ord Minnett | Overnight Price $0.44 |
RMS | Ramelius Resources | Buy - Ord Minnett | Overnight Price $1.94 |
SEK | Seek | Lighten - Ord Minnett | Overnight Price $23.78 |
SFR | Sandfire Resources | Downgrade to Hold from Accumulate - Ord Minnett | Overnight Price $8.86 |
TPW | Temple & Webster | Buy - Citi | Overnight Price $9.47 |
TWE | Treasury Wine Estates | Outperform - Macquarie | Overnight Price $11.99 |
Overweight - Morgan Stanley | Overnight Price $11.99 | ||
Buy - UBS | Overnight Price $11.99 | ||
XRO | Xero | Buy - Citi | Overnight Price $125.93 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 16 |
2. Accumulate | 1 |
3. Hold | 3 |
4. Reduce | 1 |
Thursday 06 June 2024
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Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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