Australian Broker Call
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October 01, 2019
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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.
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Today's Upgrades and Downgrades
FMG - | FORTESCUE | Downgrade to Underperform from Neutral | Credit Suisse |
NUF - | NUFARM | Upgrade to Outperform from Neutral | Macquarie |
Credit Suisse rates BHP as Neutral (3) -
Credit Suisse has reviewed forecasts for bulk commodities and, significantly for BHP Group, has reduced 2020 iron ore price estimates by -6%, metallurgical coal price estimates by -15% and thermal coal estimates by -18%.
Neutral rating maintained. Target is reduced to $37 from $40.
Target price is $37.00 Current Price is $37.00 Difference: $0
If BHP meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $37.78, suggesting upside of 2.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 156.27 cents and EPS of 311.12 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 323.6, implying annual growth of N/A. Current consensus DPS estimate is 215.7, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 11.4. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 112.23 cents and EPS of 221.62 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 268.8, implying annual growth of -16.9%. Current consensus DPS estimate is 175.3, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 13.8. |
This company reports in USD. 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
Overnight Price: $3.72
UBS rates CGC as Buy (1) -
Wholesale prices remain weak and mushrooms are particularly soft, UBS observes. The broker had expected some improvement in mushroom pricing by now and assesses some risks exist in terms of the company's guidance.
The December quarter is now critically important. UBS retains a Buy rating because the earnings outlook for 2020-23 is strong and, following three downgrades, sentiment has turned negative.
Nevertheless, the broker envisages few catalysts until the market is confident that 2019 guidance will be met. Target is $5.20.
Target price is $5.20 Current Price is $3.72 Difference: $1.48
If CGC meets the UBS target it will return approximately 40% (excluding dividends, fees and charges).
Current consensus price target is $4.14, suggesting upside of 11.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
UBS forecasts a full year FY19 dividend of 11.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.0, implying annual growth of -52.7%. Current consensus DPS estimate is 9.5, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 23.3. |
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 14.00 cents and EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.4, implying annual growth of 21.2%. Current consensus DPS estimate is 11.4, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 19.2. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CLQ CLEAN TEQ HOLDINGS LIMITED
New Battery Elements
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Overnight Price: $0.31
Macquarie rates CLQ as No Rating (-1) -
Macquarie notes CleanTeq's front-end design and engineering process is still behind schedule and a delay is expected.
The broker is currently restricted from making a recommendation.
Current Price is $0.31. Target price not assessed.
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.90 cents. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.70 cents. |
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.32
Credit Suisse rates CRN as Outperform (1) -
Credit Suisse has reviewed forecasts for bulk commodities, reducing near-term metallurgical coal price estimates by -27% for the fourth quarter of 2019 and by -15% for 2020.
Despite the softness, there are no concerns over the company's balance sheet and it has the flexibility to deal with a prolonged market downturn, in the broker's view.
Credit Suisse maintains an Outperform rating and reduces the target to $4.00 from $4.60.
Target price is $4.00 Current Price is $2.32 Difference: $1.68
If CRN meets the Credit Suisse target it will return approximately 72% (excluding dividends, fees and charges).
Current consensus price target is $3.30, suggesting upside of 42.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 66.91 cents and EPS of 47.35 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 50.0, implying annual growth of N/A. Current consensus DPS estimate is 77.0, implying a prospective dividend yield of 33.2%. Current consensus EPS estimate suggests the PER is 4.6. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 17.74 cents and EPS of 28.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.6, implying annual growth of -46.8%. Current consensus DPS estimate is 19.0, implying a prospective dividend yield of 8.2%. Current consensus EPS estimate suggests the PER is 8.7. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $8.75
Credit Suisse rates FMG as Downgrade to Underperform from Neutral (5) -
Credit Suisse has downgraded iron ore forecasts for the second half of 2020 by -12% and for 2021 by -13%. The broker downgrades to Underperform from Neutral, given the recent share price strength.
However, this is largely a call on the commodity outlook, as it will be difficult for the stock to outperform in a falling price environment.
That said, the company has shown a willingness to return funds to shareholders and there are two projects driving organic growth, Credit Suisse acknowledges. Target is reduced to $7.50 from $8.00.
Target price is $7.50 Current Price is $8.75 Difference: minus $1.25 (current price is over target).
If FMG meets the Credit Suisse target it will return approximately minus 14% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $8.10, suggesting downside of -7.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 124.63 cents and EPS of 191.79 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 188.5, implying annual growth of N/A. Current consensus DPS estimate is 142.3, implying a prospective dividend yield of 16.3%. Current consensus EPS estimate suggests the PER is 4.6. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 64.64 cents and EPS of 100.87 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 109.0, implying annual growth of -42.2%. Current consensus DPS estimate is 63.6, implying a prospective dividend yield of 7.3%. Current consensus EPS estimate suggests the PER is 8.0. |
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
Overnight Price: $2.20
Credit Suisse rates NHC as Outperform (1) -
Credit Suisse has reduced near-term thermal coal forecasts by -15-20% out until the end of 2021. This drives earnings downgrades of -25-35% for the next two fiscal years.
The issue is how long cheap gas persists and how long tonnage from Russia has an impact, as this is more than offsetting US and Colombian rationalisation.
Credit Suisse maintains an Outperform rating and reduces the target to $2.70 from $3.00.
Target price is $2.70 Current Price is $2.20 Difference: $0.5
If NHC meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $2.58, suggesting upside of 17.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 12.00 cents and EPS of 20.43 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.1, implying annual growth of -20.6%. Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 10.9. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 12.00 cents and EPS of 14.87 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.4, implying annual growth of -23.4%. Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 14.3. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.96
Citi rates NST as Buy (1) -
With a mill expansion on the table and the prospect of reserve growth from Goodpastor, Citi has high expectations for Pogo. The main catalysts will be achieving development run rates and further resource updates.
Buy rating maintained. Target is raised to $13.70 from $13.30.
Target price is $13.70 Current Price is $10.96 Difference: $2.74
If NST meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $11.69, suggesting upside of 6.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Citi forecasts a full year FY20 dividend of 19.00 cents and EPS of 89.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 62.2, implying annual growth of 154.9%. Current consensus DPS estimate is 16.8, implying a prospective dividend yield of 1.5%. Current consensus EPS estimate suggests the PER is 17.6. |
Forecast for FY21:
Citi forecasts a full year FY21 dividend of 21.00 cents and EPS of 102.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 75.1, implying annual growth of 20.7%. Current consensus DPS estimate is 19.2, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 14.6. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $6.50
Credit Suisse rates NUF as Outperform (1) -
The company has been able to divest its South American business at an attractive price, removing the financing risk. A lower leverage target should appeal to a market that requires management to focus on operations, Credit Suisse assesses.
The broker notes FY20 will be about targeting structural improvements in earnings amid hopes of improved seasonal conditions in Australia and Europe in the second half. Outperform rating maintained. Target is raised to $8.30 from $8.24.
Target price is $8.30 Current Price is $6.50 Difference: $1.8
If NUF meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $6.48, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 7.00 cents and EPS of 20.02 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of 295.9%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 10.00 cents and EPS of 33.82 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 26.3%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates NUF as Upgrade to Outperform from Neutral (1) -
No surprises from the Nufarm FY19 result given the company kept the market well-informed. The surprise came with the sale of the LatAm business, which had been soaking up 33% of working capital while representing 28% of earnings, suffering negative cash flow for the last five years and exposed currency risk, at what Macquarie describes as a "good price".
Significantly, the sale reduces debt to a comfortable level at this difficult time. The broker has subtracted LatAm earnings forecasts but lifted its target to $6.56 from $5.30, noting the stock trades at an enterprise value discount to global peers and the market is ascribing no value to Omega-3. The sale also increases Nufarm's leverage to improved seasonal conditions in Australia. Upgrade to Outperform.
Target price is $6.56 Current Price is $6.50 Difference: $0.06
If NUF meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $6.48, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 6.60 cents and EPS of 32.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of 295.9%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 11.60 cents and EPS of 46.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 26.3%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates NUF as Overweight (1) -
FY19 results were in line with Morgan Stanley's expectations. The broker welcomes the sale of the South American business at an attractive multiple as it simplifies Nufarm and provides repair for the balance sheet.
With gearing reduced, the company is better placed to withstand difficult seasonal conditions. The broker reiterates an Overweight rating and Cautious industry view. Target is raised to $7.20 from $6.80.
Target price is $7.20 Current Price is $6.50 Difference: $0.7
If NUF meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $6.48, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 9.00 cents and EPS of 29.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of 295.9%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 12.00 cents and EPS of 38.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 26.3%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates NUF as Hold (3) -
Morgans assesses the sale of the South American business to Sumitomo has overshadowed the FY19 result. The sale is expected to improve cash flow and, importantly, it restores the balance sheet to conservative levels.
FY20 outlook commentary was weaker than the broker expected, because of the drought in Australia, supply issues and increased competition.
Hold rating maintained. Target is raised to $5.48 from $5.25.
Target price is $5.48 Current Price is $6.50 Difference: minus $1.02 (current price is over target).
If NUF meets the Morgans target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $6.48, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 9.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of 295.9%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 11.00 cents and EPS of 40.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 26.3%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates NUF as Hold (3) -
FY19 operating earnings were in line with guidance and slightly ahead of Ord Minnett's forecasts. The company also announced the sale of its South American crop protection and seed treatment operations to Sumitomo for $1.19bn.
The broker asserts Nufarm has decisively addressed its vulnerable capital position and investors can now focus on the fundamentals.
Ord Minnett retains a Hold rating and increases the target to $5.35 from $4.90. The broker would be interested to find out the timeline for when the dividend is likely to be reinstated.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $5.35 Current Price is $6.50 Difference: minus $1.15 (current price is over target).
If NUF meets the Ord Minnett target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $6.48, suggesting downside of -0.3% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY20:
Ord Minnett forecasts a full year FY20 EPS of 23.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.3, implying annual growth of 295.9%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 22.2. |
Forecast for FY21:
Ord Minnett forecasts a full year FY21 EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.0, implying annual growth of 26.3%. Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 17.6. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates OEL as Add (1) -
Morgans notes Otto Energy continues to transform its earnings, accumulating relatively smaller discoveries that remain meaningful from an earnings perspective. The FY19 result was broadly in line with estimates.
The broker suspects the market is watching for any debt financing being secured, to remove any remaining dilution risk. Add rating maintained. Target is raised to 15.6c from 14c.
Target price is $0.16 Current Price is $0.05 Difference: $0.106
If OEL meets the Morgans target it will return approximately 212% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Morgans forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.70 cents. |
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.85 cents. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.32
Macquarie rates PAN as Outperform (1) -
Panoramic has reported a -3% reduction in nickel reserves net of depletion and a -31% decrease in resources post the sale of the Lanfranchi project.
The broker retains Outperform and a 45c target as it awaits this month's quarterly production report.
Target price is $0.45 Current Price is $0.32 Difference: $0.13
If PAN meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.30 cents. |
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.00 cents and EPS of 4.60 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PDL PENDAL GROUP LIMITED
Wealth Management & Investments
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Overnight Price: $7.53
Macquarie rates PDL as Outperform (1) -
Pendal's net outflows accelerated in the Sep Q to -$1.0bn from -$0.4bn in the June Q, primarily from UK/Europe funds. However most of the damage was done in July, the broker notes, with improvement being seen thereafter.
The stock trades at a forward PE -21% below its five-year average and a -12% discount to listed fund managers thus the broker sees the scope for a re-rate if improvement continues. Outperform and $8.75 target retained.
Target price is $8.75 Current Price is $7.53 Difference: $1.22
If PDL meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $8.44, suggesting upside of 12.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Macquarie forecasts a full year FY19 dividend of 44.50 cents and EPS of 52.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.1, implying annual growth of -25.2%. Current consensus DPS estimate is 44.9, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY20:
Macquarie forecasts a full year FY20 dividend of 47.50 cents and EPS of 55.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 56.9, implying annual growth of 11.4%. Current consensus DPS estimate is 48.2, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $92.60
Credit Suisse rates RIO as Underperform (5) -
Credit Suisse has reviewed forecasts for bulk commodities. Iron ore forecasts are reduced by -6% and -13% for 2020 and 2021 respectively.
Credit Suisse maintains an Underperform rating, noting some material operating challenges are still to be navigated in iron ore and at Oyu Tolgoi. Target is reduced to $86 from $92.
Target price is $86.00 Current Price is $92.60 Difference: minus $6.6 (current price is over target).
If RIO meets the Credit Suisse target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $99.25, suggesting upside of 7.2% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 679.07 cents and EPS of 960.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1009.5, implying annual growth of N/A. Current consensus DPS estimate is 691.7, implying a prospective dividend yield of 7.5%. Current consensus EPS estimate suggests the PER is 9.2. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 515.70 cents and EPS of 875.12 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 942.1, implying annual growth of -6.7%. Current consensus DPS estimate is 602.3, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 9.8. |
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
Overnight Price: $2.66
Credit Suisse rates S32 as Outperform (1) -
Credit Suisse has reviewed forecasts for bulk commodities, reducing metallurgical coal price estimates by -11% for 2019 and by -15% for 2020.
The broker is comfortable with the longer-term value in the stock but embedded growth will take some time to materialise and current coal markets are likely to make the economics of Eagle Downs challenging.
Outperform maintained. Target is reduced to $3.20 from $3.30.
Target price is $3.20 Current Price is $2.66 Difference: $0.54
If S32 meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $3.10, suggesting upside of 16.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 8.41 cents and EPS of 21.11 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.8, implying annual growth of N/A. Current consensus DPS estimate is 10.5, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 12.8. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 9.04 cents and EPS of 22.59 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.4, implying annual growth of 22.1%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 10.5. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.15
UBS rates SGM as Sell (5) -
Sims Metal has indicated Turkish scrap prices are now so low that, for some of its metal suppliers, there is no incentive to collect and deliver materials to the yards.
The company has not outlined explicit volume targets for the first half but UBS notes some reports are suggesting input volumes are down -20% in the US and -50% in the UK. Volumes are also falling in Australia.
On non-ferrous prices, the broker suspects low prices are likely to persist as China continues to withdraw and global automotive demand remains soft.
FY20 estimates for net profit are reduced by -46%. UBS also considers the first half dividend is at risk. Sell rating maintained. Target is reduced to $8.30 from $9.90.
Target price is $8.30 Current Price is $10.15 Difference: minus $1.85 (current price is over target).
If SGM meets the UBS target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.33, suggesting upside of 1.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 14.00 cents and EPS of 46.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.2, implying annual growth of -19.8%. Current consensus DPS estimate is 25.8, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 16.9. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 33.00 cents and EPS of 65.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 79.4, implying annual growth of 31.9%. Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 3.3%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $29.74
Credit Suisse rates WBC as Outperform (1) -
Credit Suisse observes a recovery in the housing market is starting to gain momentum. This will amplify the need for capital and the broker estimates that for every additional 1% per annum growth in Australian housing credit Westpac requires $177m of capital.
The broker forecasts a $2bn capital raising via a partially underwritten dividend reinvestment plan along with a reduction to the half-year dividend to $0.84 per share. This would bring the CET1 ratio to 11% throughout the forecast horizon.
Credit Suisse maintains an Outperform rating and $30.55 target.
Target price is $30.55 Current Price is $29.74 Difference: $0.81
If WBC meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $28.96, suggesting downside of -2.6% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY19:
Credit Suisse forecasts a full year FY19 dividend of 178.00 cents and EPS of 203.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 203.6, implying annual growth of -13.8%. Current consensus DPS estimate is 183.3, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 168.00 cents and EPS of 230.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 221.0, implying annual growth of 8.5%. Current consensus DPS estimate is 178.7, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 13.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $10.52
Morgan Stanley rates WEB as Equal-weight (3) -
Morgan Stanley reduces estimates for operating earnings (EBITDA) by -6-7% for FY20. This reflects adjustments for Thomas Cook and Amoma, both having permanently ceased operations. The broker notes a significant hit in terms of receivables, which will be written down to zero.
Given the company has historically guided conservatively, the broker does not anticipate a significant positive impulse from the AGM. Equal-weight rating maintained. Target is reduced to $12.40 from $13.80. Industry View is In-Line.
Target price is $12.40 Current Price is $10.52 Difference: $1.88
If WEB meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $14.20, suggesting upside of 35.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Morgan Stanley forecasts a full year FY20 dividend of 33.40 cents and EPS of 74.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 64.6, implying annual growth of 37.4%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 16.3. |
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 37.40 cents and EPS of 83.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 80.5, implying annual growth of 24.6%. Current consensus DPS estimate is 31.0, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 13.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.15
Credit Suisse rates WHC as Outperform (1) -
Credit Suisse has reduced near-term thermal coal forecasts by -15-20% out until the end of 2021. This drives earnings downgrades for Whitehaven Coal of -50% for the next two fiscal years.
The issue is how long cheap gas persists and how long tonnage from Russia has an impact, as this is more than offsetting US and Colombian rationalisation.
The broker maintains an Outperform rating and reduces the target to $4.10 from $4.40.
Target price is $4.10 Current Price is $3.15 Difference: $0.95
If WHC meets the Credit Suisse target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $3.96, suggesting upside of 25.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY20:
Credit Suisse forecasts a full year FY20 dividend of 12.92 cents and EPS of 17.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.2, implying annual growth of -60.4%. Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 14.9. |
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 8.60 cents and EPS of 17.21 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.7, implying annual growth of 7.1%. Current consensus DPS estimate is 11.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 13.9. |
Market Sentiment: 0.6
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 | |
BHP | BHP | $37.00 | Credit Suisse | 37.00 | 40.00 | -7.50% |
CRN | CORONADO GLOBAL RESOURCES | $2.32 | Credit Suisse | 4.00 | 4.60 | -13.04% |
FMG | FORTESCUE | $8.75 | Credit Suisse | 7.50 | 8.00 | -6.25% |
NHC | NEW HOPE CORP | $2.20 | Credit Suisse | 2.70 | 3.00 | -10.00% |
NST | NORTHERN STAR | $10.96 | Citi | 13.70 | 13.30 | 3.01% |
NUF | NUFARM | $6.50 | Credit Suisse | 8.30 | 8.24 | 0.73% |
Macquarie | 6.56 | 5.30 | 23.77% | |||
Morgan Stanley | 7.20 | 6.80 | 5.88% | |||
Morgans | 5.48 | 5.25 | 4.38% | |||
Ord Minnett | 5.35 | 4.90 | 9.18% | |||
OEL | OTTO ENERGY | $0.05 | Morgans | 0.16 | 0.14 | 8.33% |
RIO | RIO TINTO | $92.60 | Credit Suisse | 86.00 | 92.00 | -6.52% |
S32 | SOUTH32 | $2.66 | Credit Suisse | 3.20 | 3.30 | -3.03% |
SGM | SIMS METAL MANAGEMENT | $10.15 | UBS | 8.30 | 9.90 | -16.16% |
WEB | WEBJET | $10.52 | Morgan Stanley | 12.40 | 13.80 | -10.14% |
WHC | WHITEHAVEN COAL | $3.15 | Credit Suisse | 4.10 | 4.40 | -6.82% |
Summaries
BHP | BHP | Neutral - Credit Suisse | Overnight Price $37.00 |
CGC | COSTA GROUP | Buy - UBS | Overnight Price $3.72 |
CLQ | CLEAN TEQ HOLDINGS | No Rating - Macquarie | Overnight Price $0.31 |
CRN | CORONADO GLOBAL RESOURCES | Outperform - Credit Suisse | Overnight Price $2.32 |
FMG | FORTESCUE | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $8.75 |
NHC | NEW HOPE CORP | Outperform - Credit Suisse | Overnight Price $2.20 |
NST | NORTHERN STAR | Buy - Citi | Overnight Price $10.96 |
NUF | NUFARM | Outperform - Credit Suisse | Overnight Price $6.50 |
Upgrade to Outperform from Neutral - Macquarie | Overnight Price $6.50 | ||
Overweight - Morgan Stanley | Overnight Price $6.50 | ||
Hold - Morgans | Overnight Price $6.50 | ||
Hold - Ord Minnett | Overnight Price $6.50 | ||
OEL | OTTO ENERGY | Add - Morgans | Overnight Price $0.05 |
PAN | PANORAMIC RESOURCES | Outperform - Macquarie | Overnight Price $0.32 |
PDL | PENDAL GROUP | Outperform - Macquarie | Overnight Price $7.53 |
RIO | RIO TINTO | Underperform - Credit Suisse | Overnight Price $92.60 |
S32 | SOUTH32 | Outperform - Credit Suisse | Overnight Price $2.66 |
SGM | SIMS METAL MANAGEMENT | Sell - UBS | Overnight Price $10.15 |
WBC | WESTPAC BANKING | Outperform - Credit Suisse | Overnight Price $29.74 |
WEB | WEBJET | Equal-weight - Morgan Stanley | Overnight Price $10.52 |
WHC | WHITEHAVEN COAL | Outperform - Credit Suisse | Overnight Price $3.15 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 13 |
3. Hold | 4 |
5. Sell | 3 |
Tuesday 01 October 2019
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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
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This document is provided for informational purposes only. It does not
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base their work on information believed to be reliable and accurate, though
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should contact their personal adviser before making any investment decision.
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