Australian Broker Call

Morgans rates AGL as Downgrade to Hold from Add (3) -

A drop in European electricity demand is a sign of what's ahead in Australia. Morgans expects demand to remain resilient in essential retail and heavy industries but bad debts are expected to grow among retail customers. Spot prices are now significantly weaker.

The balance sheets of both AGL Energy and Origin Energy are strong, the broker notes, but cash flow will be challenging for Origin in FY21.

AGL downgraded to Hold from Add. Target falls to $17.39 from $18.35.

Target price is $17.39 Current Price is $17.66 Difference: minus $0.27 (current price is over target).
If AGL meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $18.12, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

UBS rates AGL as Upgrade to Neutral from Sell (3) -

UBS upgrades to Neutral from Sell, believing the share price is now at fair value. The broker considers the balance sheet enviable along with the dividend yield.

The fundamental concern is that the stock is over-exposed to falling wholesale electricity prices while securing value-accretive growth is challenged. Target is reduced to $18.00 from $18.80.

Target price is $18.00 Current Price is $17.66 Difference: $0.34
If AGL meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $18.12, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.4

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

Credit Suisse rates BAP as Outperform (1) -

Bapcor has underperformed recently, given the concerns around shut-downs and the associated impact on the balance sheet.

Credit Suisse observes the company has multiple options on its balance sheet which limits gearing to 2.6x FY20 operating earnings (EBITDA).

The broker retains an Outperform rating and reduces the target to $5.85 from $7.50.

Target price is $5.85 Current Price is $4.36 Difference: $1.49
If BAP meets the Credit Suisse target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $6.83, suggesting upside of 56.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 1.0

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

Macquarie rates BXB as Upgrade to Outperform from Neutral (1) -

Consumable product volumes are being supported by panic buying, benefiting pallet volumes, although there are higher costs Macquarie notes.

Given the company's highly defensive end-product exposure, the broker expects earnings should be resilient during a global recession. Profit estimates are marginally increased for FY20/21.

Rating is upgraded to Outperform from Neutral and the target raised to $12.90 from $12.50.

Target price is $12.90 Current Price is $11.61 Difference: $1.29
If BXB meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $12.64, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Ord Minnett rates CTX as Upgrade to Accumulate from Hold (2) -

Ord Minnett upgrades to Accumulate from Hold, having reviewed earnings estimates for the oil refining stocks. Restrictions on international air travel and a significant reduction in domestic flights should dramatically reduce demand for jet fuel.

Meanwhile, retail fuel margins have been very strong in February and March, a positive. Ord Minnett prefers Caltex Australia versus Viva Energy ((VEA)) as the latter's product mix is a headwind and there is limited potential for cost savings. Target is reduced to $26.50 from $30.00.

Target price is $26.50 Current Price is $23.02 Difference: $3.48
If CTX meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $30.93, suggesting upside of 34.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Morgans rates DMP as Downgrade to Hold from Add (3) -

It's a case of pros and cons for fast food chains at this time, Morgans notes, as an increase in home delivery demand is offset by a drop-off in store pick-ups, pantry loading and a lack of footy on TV to drive demand. Store closures in France and NZ add to the issues for Domino's Pizza, and an update shows slowing sales.

The broker does not see a significant earnings hit, but is mindful that the stock fell only -8% in March compared to -21% for the index, thus there is a risk of earnings disappointment. All will revert quickly on the other side, but for now the broker pulls back to Hold from Add and awaits further updates. Target falls to $57.19 from $58.67.

Target price is $57.19 Current Price is $51.45 Difference: $5.74
If DMP meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $56.04, suggesting upside of 8.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Credit Suisse rates EVN as Outperform (1) -

There was no disruption to production from the crisis over the March quarter. Guidance in FY20 is for 725,000 ounces at $940-990/oz, which excludes unexpected contribution from Red Lake.

The guidance and the current gold price support a robust outlook, Credit Suisse maintains. The broker retains an Outperform rating and $4.60 target.

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

Current consensus price target is $4.18, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates EVN as Hold (3) -

The company has maintained guidance and announced completion of the Red Lake acquisition. FY20 production guidance is 725,000 ounces at an all-in sustaining cost of $940-990/oz.

This excludes unexpected contribution from Red Lake. Ord Minnett retains a Hold rating and $3.70 target.

Target price is $3.70 Current Price is $4.11 Difference: minus $0.41 (current price is over target).
If EVN meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.18, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

UBS rates EVN as Buy (1) -

Management has reiterated guidance for FY20. The Red Lake acquisition has been completed and, while the timing of the asset acquisition is not ideal because of mobility restrictions in Canada and Australia, UBS believes only low expectations for this asset are priced in.

The valuation is considered attractive and a Buy rating and $4.80 target are maintained.

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

Current consensus price target is $4.18, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Macquarie rates GUD as Neutral (3) -

Macquarie revises forecasts to allow for the impact of coronavirus on the automotive trade industry. While demand is solid to date, vehicle movements and trade demand have declined significantly in Australasia.

Macquarie considers the automotive trade industry an essential service that will rebound quickly once lock-down rules are relaxed.

The broker believes the company's facilities are also sufficient to withstand an extended period of restrictions. Neutral maintained. Target is reduced to $9.50 from $11.80.

Target price is $9.50 Current Price is $9.54 Difference: minus $0.04 (current price is over target).
If GUD meets the Macquarie target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.52, suggesting upside of 10.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Morgans rates HPI as Hold (3) -

Hotel Property Investments' pub and accommodation assets are majority leased to a JV between Coles ((COL)) and KKR. Pubs are closed but bottle shops are still operating, but given the uncertainty of the duration of shutdowns the broker expects a significant earnings impact on tenants.

The company has gearing of 38% and an indirect cost ratio of 3.5x versus covenant requirement of 2x, the broker notes. Target falls to $2.58 from $3.36, Hold retained.

Target price is $2.58 Current Price is $2.19 Difference: $0.39
If HPI meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgan Stanley rates IEL as Overweight (1) -

The company has added debt facilities of $150m and will raise $190m in new equity, which will create a $430m liquidity buffer, along with existing reserves.

Morgan Stanley assesses this development comes with dilution of -7% but is a sensible trade-off, given the current environment.

The broker reduces student placement volume forecasts to reflect that enrolments from the July semester onward in Australia may be pushed out.

The main difference in assumptions now is the lock-down in India, which the broker estimates accounts for close to 40% of student placement and IELTS volumes.

Morgan Stanley considers the business critical to the functioning of higher education systems domestically, and increasingly abroad, and retains an Overweight rating. Industry view is In-Line. Target is reduced to $17.50 from $18.50.

Target price is $17.50 Current Price is $14.71 Difference: $2.79
If IEL meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $18.35, suggesting upside of 24.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

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

IDP Education was travelling along fine at the beginning of the year before the wheels fell off in March, a trading update revealed. This has prompted a $240m capital raising and debt refinancing. Morgans has cut earnings per share forecast by over -40% and does not expect a full recovery until FY22.

The broker notes, nonetheless, the nature of IDP's business means it may recover faster than expected, and a strengthened balance sheet will make the company better positioned, operating as a large global player with limited competition. Target falls to $15.07 from $24.49. Upgrade to Add from Hold.

Target price is $15.07 Current Price is $14.71 Difference: $0.36
If IEL meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $18.35, suggesting upside of 24.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Ord Minnett rates IEL as Upgrade to Buy from Accumulate (1) -

The company has raised $240m, and increased the size of its debt facility by $150m. There is also a series of cost reduction initiatives announced.

The coronavirus crisis is likely to cause a material disruption to the business but Ord Minnett asserts structural drivers underpinning international student mobility have not changed.

With enhanced capital flexibility and a strong long-term outlook the broker upgrades to Buy from Accumulate. Target is reduced to $16.98 from $22.34.

Target price is $16.98 Current Price is $14.71 Difference: $2.27
If IEL meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $18.35, suggesting upside of 24.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

Morgans rates IFN as Add (1) -

A drop in European electricity demand is a sign of what's ahead in Australia. Morgans expects demand to remain resilient in essential retail and heavy industries but bad debts are expected to grow among retail customers.

Spot prices are now significantly weaker. The balance sheets of both AGL Energy and Origin Energy are strong, the broker notes, but cash flow will be challenging for Origin in FY21.

Infigen Energy has a much lower share of retail customers compared to the Big Two and wind farms have longer term contracts at fixed prices, the broker notes. Lower spot prices will nevertheless lower revenues. Target falls to 71c from 80c, Add retained.

Target price is $0.71 Current Price is $0.45 Difference: $0.26
If IFN meets the Morgans target it will return approximately 58% (excluding dividends, fees and charges).

Current consensus price target is $0.74, suggesting upside of 64.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.7

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

Macquarie rates IGO as Outperform (1) -

Macquarie assesses the discovery of massive nickel-copper sulphide by Legend Mining ((LEG)) has enhanced the potential for additional discoveries on the Fraser Range. This highlights the strategic value of IGO's dominant landholding.

The broker believes extending the life of Nova can deliver a material uplift in value. Meanwhile, the operating performance is strong and a beat on production guidance at Nova in FY20 is still possible.

Outperform rating maintained. Target is $5.90.

Target price is $5.90 Current Price is $4.34 Difference: $1.56
If IGO meets the Macquarie target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $5.57, suggesting upside of 28.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Macquarie rates JHG as Outperform (1) -

While the improvement in retail flows has probably unwound in recent weeks, Macquarie still envisages material upside for the business at current levels.

Moreover, the dividend yield of 9.5% and a 3.5% accretive buyback for every US$100m provides valuation support.

The broker finds no issues on the balance sheet and retains an Outperform rating. Target is reduced to $33.00 from $42.80.

Target price is $33.00 Current Price is $23.50 Difference: $9.5
If JHG meets the Macquarie target it will return approximately 40% (excluding dividends, fees and charges).

Current consensus price target is $38.19, suggesting upside of 62.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.5

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

Morgan Stanley rates JIN as Overweight (1) -

The company's trading update suggests a very conservative fourth quarter is being factored in, as Morgan Stanley suspects there will be accelerated online adoption of lotteries.

Target is $16. Overweight rating. Industry view is In-Line.

Target price is $16.00 Current Price is $9.65 Difference: $6.35
If JIN meets the Morgan Stanley target it will return approximately 66% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Morgans rates JIN as Hold (3) -

A trading update from Jumbo Interactive included earnings guidance below expectation, although the company does have a track record of being conservative, the broker notes.

Jumbo has a strong balance sheet and considerable cash holdings, putting it in good stead in the current environment, suggest the analysts.

The company should benefit from to the shift to digital, not just at the moment but structurally, but the broker remains cautious on ticket sales at this time. Target falls to $9.62 from $12.54, Hold retained.

Target price is $9.62 Current Price is $9.65 Difference: minus $0.03 (current price is over target).
If JIN meets the Morgans target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates MFG as Upgrade to Neutral from Underperform (3) -

Macquarie continues to believe Magellan Financial is the highest quality fund manager on the ASX. However, following the recent rally and perceived flight to quality, the stock is considered fairly valued.

Marking to market reduces funds under management by -12% in February and March. Rating is upgraded to Neutral from Underperform and the target reduced to $50 from $60.

Target price is $50.00 Current Price is $45.99 Difference: $4.01
If MFG meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $44.80, suggesting downside of -2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Morgan Stanley rates NWS as Underweight (5) -

Morgan Stanley considers the exit of inserts/coupons is an incremental positive, expecting the growth trajectory of the remaining business should be improved.

The question now is whether there are further asset sales and if capital management is on the cards.

Underweight rating and US$10.75 target maintained. Industry view: Attractive.

Current Price is $13.87. Target price not assessed.

Current consensus price target is $24.42, suggesting upside of 76.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.5

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

UBS rates NWS as Buy (1) -

News Corp has announced the sale of its News America Marketing business for US$175-235m cash, with an option to retain up to 15% equity.

While the magnitude of this deal is small in the broader context of the business, UBS considers it "qualitatively positive".

The NAM business has no significant synergies with the rest of the News Corp stable and the analysts suggest it removes a structurally-challenged business at a time of extreme uncertainty.

Buy rating maintained. Target is reduced to $23.40 from $24.00.

Target price is $23.40 Current Price is $13.87 Difference: $9.53
If NWS meets the UBS target it will return approximately 69% (excluding dividends, fees and charges).

Current consensus price target is $24.42, suggesting upside of 76.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.5

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

Morgans rates ORG as Hold (3) -

A drop in European electricity demand is a sign of what's ahead in Australia. Morgans expects demand to remain resilient in essential retail and heavy industries but bad debts are expected to grow among retail customers. Spot prices are now significantly weaker.

The balance sheets of both AGL Energy and Origin Energy are strong, the broker notes, but cash flow will be challenging for Origin in FY21.

Hold retained for Origin. Target falls to $4.75 from $6.12.

Target price is $4.75 Current Price is $4.80 Difference: minus $0.05 (current price is over target).
If ORG meets the Morgans target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.48, suggesting upside of 35.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Credit Suisse rates PDL as Upgrade to Neutral from Underperform (3) -

Credit Suisse lowers estimates for earnings by -11% in FY20, -25% FY21 and -25% in FY22. This is driven by lower funds under management from the drop in equity markets and an assumption that markets will remain flat for the remainder of 2020.

The broker estimates that only around 5% of JO Hambro retail is outperforming over one year and only 50% over three and five years as of the end of February 2020.

As the share price is down -44% over the last three months, and having downgraded estimates, the broker is more comfortable with its earnings forecasts.

Target is reduced to $4.90 from $6.60 and the rating upgraded to Neutral from Underperform.

Target price is $4.90 Current Price is $4.66 Difference: $0.24
If PDL meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $6.44, suggesting upside of 38.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates PDL as Upgrade to Outperform from Neutral (1) -

Following recent market movements, Macquarie reviews the impact on Pendal Group. The relative performance is improving and, following a recent de-rating, the stock is now trading around -27% below the five-year average.

Macquarie considers this an attractive entry point and upgrades to Outperform from Neutral. Target is reduced to $6.00 from $8.75.

Target price is $6.00 Current Price is $4.66 Difference: $1.34
If PDL meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $6.44, suggesting upside of 38.1% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.5

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

Macquarie rates PPT as Upgrade to Neutral from Underperform (3) -

Following recent market movements, Macquarie reviews the impact on Perpetual. The relative equities performance is improving and fixed income has moderated.

The broker has no issues with the balance sheet and does not expect Perpetual to pursue any additional offshore acquisitions in the current environment.

Macquarie considers the valuation more appealing now and upgrades to Neutral from Underperform. Target is reduced to $27.50 from $40.00.

Target price is $27.50 Current Price is $25.52 Difference: $1.98
If PPT meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $38.37, suggesting upside of 50.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.0

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

Macquarie rates PTM as Underperform (5) -

Macquarie expects outflows to remain elevated, given the mature customer base. The broker marks to market, which reduces funds under management by -9% for February and March.

Although downside protection is starting to deliver relative outperformance the broker's preferences lie elsewhere and an Underperform rating is maintained. Target is reduced to $3.15 from $4.00.

Target price is $3.15 Current Price is $3.23 Difference: minus $0.08 (current price is over target).
If PTM meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.88, suggesting downside of -10.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.8

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

Credit Suisse rates QAN as Downgrade to Underperform from Neutral (5) -

Credit Suisse forecasts Qantas to gain a $290m benefit from the federal government's JobKeeper subsidies. However, the longer the shut-down, the more difficult and costly the re-start will be, in the broker's view.

Credit Suisse pushes out expectations for a full recovery to FY23. Cash flow is expected to be steered towards balance sheet repair and fleet renewal once the crisis is over. Rating is lowered to Underperform from Neutral. Target is $2.20.

Target price is $2.20 Current Price is $3.22 Difference: minus $1.02 (current price is over target).
If QAN meets the Credit Suisse target it will return approximately minus 32% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.62, suggesting upside of 43.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Morgans rates RBL as Downgrade to Reduce from Add (5) -

Redbubbles' sales growth has slowed and become more volatile due to the increasing toll on consumer finances. The company had $31m in cash at the end of March, Morgans notes, and has taken steps to reduce costs. Guidance for becoming cash flow positive has nevertheless been withdrawn.

The broker cuts forecasts and now anticipates a capital raising in the second half of 2020. Target falls to 50c from $1.53, double-downgrade to Reduce from Add.

Target price is $0.50 Current Price is $0.57 Difference: minus $0.07 (current price is over target).
If RBL meets the Morgans target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -1.0

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

Macquarie rates REG as Underperform (5) -

Macquarie assesses heightened pressures on the aged care sector with increased risk to working capital in order to fund outgoing Refundable Accommodation Deposits if occupancy and incoming RAD tightens.

This means debt will be needed to fund RAD. Underperform rating maintained. Target is reduced to $1.09 from $1.77 and estimates for earnings per share are cut by -38%, -90% and -29% for FY20, FY21 and FY22 respectively.

Target price is $1.09 Current Price is $1.33 Difference: minus $0.24 (current price is over target).
If REG meets the Macquarie target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.81, suggesting upside of 36.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Morgans rates REG as Hold (3) -

Regis Healthcare has withdrawn guidance, deferred its interim dividend until September and paused further development. The broker notes the company's debt position is reasonable and sufficient to see Regis through the uncertainty.

Target falls to $1.95 from $2.18, Hold retained.

Target price is $1.95 Current Price is $1.33 Difference: $0.62
If REG meets the Morgans target it will return approximately 47% (excluding dividends, fees and charges).

Current consensus price target is $1.81, suggesting upside of 36.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

Morgan Stanley rates SCG as Underweight (5) -

Scentre Group has increased its undrawn liquidity and has $3.1bn available now. This suggests to Morgan Stanley there are sufficient funds to get through debt maturities until December 2021.

In the near term is the uncertainty around the extent of rent relief that may have to be provided to tenants. The company is yet to formally respond with rent relief and Morgan Stanley expects this could involve a mixture of deferrals and cuts.

Target is $3.11. Underweight. Industry view: In Line.

Target price is $3.11 Current Price is $1.71 Difference: $1.4
If SCG meets the Morgan Stanley target it will return approximately 82% (excluding dividends, fees and charges).

Current consensus price target is $2.74, suggesting upside of 60.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.3

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

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

Ord Minnett reviews its forecasts, resulting in further reductions to estimates, albeit partially offset by a higher contribution from coronavirus testing.

The broker expects the business will recover rapidly when the lock-down is lifted but remains wary about the market underestimating the hit to earnings in the short term.

Rating is downgraded to Hold from Accumulate and the target is lowered to $27.50 from $28.50.

Target price is $27.50 Current Price is $23.30 Difference: $4.2
If SHL meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $27.70, suggesting upside of 18.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.4

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

Credit Suisse rates SYD as Downgrade to Underperform from Neutral (5) -

Credit Suisse expects international passengers will be down -70% and domestic down -58% in 2020.

A slower recovery is expected after the crisis, with the broker now expecting full passenger recovery will be delayed until 2023 for domestic and 2024 for international.

No dividend is expected in 2020. Credit Suisse assumes Sydney Airport grants some level of rent relief to tenants, or tenants default.

Rating is downgraded to Underperform from Neutral. Target is reduced to $4.50 from $5.00.

Target price is $4.50 Current Price is $5.41 Difference: minus $0.91 (current price is over target).
If SYD meets the Credit Suisse target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.72, suggesting upside of 24.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Citi rates TCL as Sell (5) -

The latest market update showed traffic is declining on Transurban's toll roads with the closing week of March signalling an acceleration in the negative trend. Citi analysts add they believe declines in revenues are possibly larger than the falls in traffic numbers.

No surprise, given the covid-19 context, Transurban has now withdrawn dividend guidance for H2. The company now expects to pay dividends in-line with free cash flow but excluding capital releases. Previously, point out the analysts, dividends were paid out 100% including capital releases.

Citi analysts point out if this becomes the new dividend policy for longer, consensus dividend forecasts will see significant reset at a lower level. Sell rating retained. Target price tumbles to $10.15 (from $12.03 in February).

Target price is $10.15 Current Price is $11.92 Difference: minus $1.77 (current price is over target).
If TCL meets the Citi target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Credit Suisse rates TCL as Downgrade to Underperform from Neutral (5) -

Traffic deteriorated through March although heavy vehicle traffic was resilient. Credit Suisse forecasts a -40% decline in traffic over the next six months.

The broker notes the company's liquidity is sufficient, with unrestricted cash of $400m and undrawn credit facilities of $3.1bn. FY21 distribution estimates are reduced by -38%.

The broker suspects companies may become more risk averse after the crisis, which could lead to more conservative capital structures and cash being steered to strengthen balance sheets rather than restoring dividend pay-outs to historical levels.

Rating is downgraded to Underperform from Neutral and the target is $10.65.

Target price is $10.65 Current Price is $11.92 Difference: minus $1.27 (current price is over target).
If TCL meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Macquarie rates TCL as Outperform (1) -

March quarter traffic is down -4%, with the last week down -36%, indicative of the move to lock down in Australia. Macquarie assesses the revenue impact in North America is likely to be closer to -90% as cities there enter full lock-down.

Dividend policy appears to be headed back to cash flow from assets and there is potential in the broker's view for this to stay at more modest levels. The broker retains an Outperform rating with a $14.48 target.

Target price is $14.48 Current Price is $11.92 Difference: $2.56
If TCL meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

While there is uncertainty over near-term traffic outcomes the provisional data on Australian roads show declines are less than European peers and at the lower end of Morgan Stanley's scenarios.

The company's North American traffic declines are in line with peers. Second half distribution guidance is withdrawn and Transurban now expects to pay its second half distribution in line with free cash, excluding capital releases.

Equal-weight and $15.70 target retained. Industry view: Cautious.

Target price is $15.70 Current Price is $11.92 Difference: $3.78
If TCL meets the Morgan Stanley target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Morgans rates TCL as Hold (3) -

Traffic has dried up, leading Transurban to withdraw guidance. The dividend is now dependent on free cash flow ex of capital releases. The broker believes a 2.2% yield can be delivered over the next 12 months, while noting that will rapidly grow as traffic recovers.

The stock looks attractive at current levels but downside traffic risk remains, the broker warns, and thus the risk of asset distribution lock-up and a capital raising to support the company's credit rating. Target falls to $13.78 from $14.81, Hold retained.

Target price is $13.78 Current Price is $11.92 Difference: $1.86
If TCL meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

Ord Minnett rates TCL as Accumulate (2) -

The quarterly traffic update reflected recent weakness, in particular a sharp deterioration in late March. Guidance is also updated, with the company expecting to distribute free cash, excluding capital releases, for the second half of FY20.

Ord Minnett reduces dividend forecasts for the second half and FY21. The broker's revised forecasts also indicate debt serviceability has deteriorated further. Accumulate maintained. Target is reduced to $13.75 from $14.50.

Target price is $13.75 Current Price is $11.92 Difference: $1.83
If TCL meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates TCL as Upgrade to Buy from Neutral (1) -

UBS assumes a three-month shock to traffic, whereby Australian private vehicle traffic declines -50% and heavy vehicles -20%. This is slightly greater than the current rate, but more moderate than international anecdotes.

While the duration of the disruption is unclear, the broker points out traffic should be one of the first activities to recover.

The company has disclosed $3.5bn in liquidity against $2.9bn of capital expenditure requirements and debt refinancing to June 2021.

This suggests to the broker that the disruption in the bond market should be manageable. UBS upgrades to Buy from Neutral and reduces the target to $13.85 from $16.05.

Target price is $13.85 Current Price is $11.92 Difference: $1.93
If TCL meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $13.19, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates TLS as Buy (1) -

UBS now assumes Telstra cuts the dividend to $0.14, potentially from the second half of FY20. Long-term forecasts for earnings per share are unchanged at $0.18.

What appears less well understood, in the broker's view, is the impact the crisis and a weaker macro outlook will have on medium-term mobile revenue growth aspirations.

The timing of one-off NBN payments and franking could also create complications. The broker retains a Buy rating and $3.70 target.

Target price is $3.70 Current Price is $3.18 Difference: $0.52
If TLS meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $3.86, suggesting upside of 21.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.6

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

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

Nielsen data has indicated Treasury Wine's US sales surged in line with the market as consumers stocked pantries.

Although this may help in the short term, it is not expected to resolve the oversupply of commercial/bulk wine.

Equal-weight rating and Cautious industry view maintained. Target is $15.

Target price is $15.00 Current Price is $9.81 Difference: $5.19
If TWE meets the Morgan Stanley target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $12.43, suggesting upside of 26.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

UBS rates TWE as Buy (1) -

UBS reduces estimates for FY20-22 to reflect a longer and larger deterioration in US volumes and further weakness in Asia.

The broker notes there is no sign of re-acceleration in China as yet. Buy rating maintained. Target is reduced to $14.80 from $15.40.

Target price is $14.80 Current Price is $9.81 Difference: $4.99
If TWE meets the UBS target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $12.43, suggesting upside of 26.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.1

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

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

Ord Minnett reviews earnings estimates for the oil refining & marketing sector. The broker downgrades to Hold from Accumulate, despite recent share price weakness.

The company's product mix is considered a headwind and there is limited potential for cost savings. Hence, the broker prefers Caltex Australia ((CTX)). Target is reduced to $1.40 from $2.25.

Target price is $1.40 Current Price is $1.23 Difference: $0.17
If VEA meets the Ord Minnett target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 57.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.3

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

Morgan Stanley rates WEB as Underweight (5) -

The company has raised $275m, with proceeds to cover expenses in 2020, assuming a continuation of severe travel restrictions.

Morgan Stanley points out there is likely to be exposure to impaired receivables and unwinding working capital is likely to put the company back into net debt albeit with liquidity headroom.

Underweight rating maintained. Target is $10.00. Industry View is In-Line.

Target price is $10.00 Current Price is $2.80 Difference: $7.2
If WEB meets the Morgan Stanley target it will return approximately 257% (excluding dividends, fees and charges).

Current consensus price target is $10.70, suggesting upside of 282.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: 0.2

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

Macquarie rates WES as Outperform (1) -

Following the partial sell-down of the Coles stake, Macquarie has identified a number of companies that could be of interest to Wesfarmers. The broker believes the company is well-placed to capitalise on market disruption.

Of note, March credit card data show a 30% increase in expenditure on hardware, building and garden supplies which likely reflects the increased demand at Bunnings.

Macquarie assesses the diversified portfolio of essential businesses can ride out the crisis. Outperform and $40.20 target retained.

Target price is $40.20 Current Price is $36.05 Difference: $4.15
If WES meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $34.64, suggesting downside of -3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY20:

Forecast for FY21:

Market Sentiment: -0.1

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

Ord Minnett rates WPL as Hold (3) -

The decision to delay the sanctioning of large-scale growth projects is considered prudent. Ord Minnett assumes Scarborough begins production in 2024 and the Pluto train 2 is shelved indefinitely. Browse is expected to come on line in 2029.

The broker prefers other stocks in the sector and maintains a Hold rating. Target is raised to $26.50 from $24.00. The broker now envisages net debt peaks at US$3.5bn and gearing at 16% in 2026.

Target price is $26.50 Current Price is $19.63 Difference: $6.87
If WPL meets the Ord Minnett target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $24.61, suggesting upside of 25.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.7

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

Macquarie rates XRO as Outperform (1) -

The company is considered well-positioned, given business-critical software. Macquarie notes the core product offering is low-cost in both relative and absolute terms. There is also a strong balance sheet and liquidity.

The broker materially reduces subscription growth forecasts across the first half of FY21 but makes no revisions to FY20 numbers, given a March year end. Outperform maintained. Target is reduced to $80.50 from $83.50.

Target price is $80.50 Current Price is $66.33 Difference: $14.17
If XRO meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $73.92, suggesting upside of 11.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY20:

Forecast for FY21:

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

Market Sentiment: 0.2

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