Australian Broker Call

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:

Forecast for FY25:

Market Sentiment: 1.0

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

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:

Forecast for FY25:

Market Sentiment: 0.4

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

Bell Potter rates 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:

Forecast for FY25:

Market Sentiment: 0.7

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

UBS rates 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:

Forecast for FY25:

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

Market Sentiment: 0.8

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

Macquarie rates 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:

Forecast for FY25:

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

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:

Forecast for FY25:

Market Sentiment: 1.0

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

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:

Forecast for FY25:

Market Sentiment: 0.9

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

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:

Forecast for FY26:

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

Market Sentiment: 0.6

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

Macquarie rates 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:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates 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:

Forecast for FY25:

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:

Forecast for FY25:

Market Sentiment: 0.4

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

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:

Forecast for FY25:

Market Sentiment: 0.4

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

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:

Forecast for FY25:

Market Sentiment: 1.0

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

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:

Forecast for FY25:

Market Sentiment: 0.7

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

Ord Minnett rates 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:

Forecast for FY25:

Market Sentiment: 0.6

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

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:

Forecast for FY25:

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

Market Sentiment: 0.0

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

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:

Forecast for FY25:

Market Sentiment: 0.6

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

Macquarie rates 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:

Forecast for FY25:

Market Sentiment: 0.7

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

Morgan Stanley rates 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:

Forecast for FY25:

Market Sentiment: 0.7

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

UBS rates 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:

Forecast for FY25:

Market Sentiment: 0.7

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

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:

Forecast for FY26:

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