Australian Broker Call
June 23, 2017
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 01:48 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| AWC - | ALUMINA | Upgrade to Hold from Sell | Deutsche Bank |
| DXS - | DEXUS PROPERTY | Downgrade to Sell from Neutral | UBS |
| ILU - | ILUKA RESOURCES | Upgrade to Outperform from Neutral | Credit Suisse |
| NST - | NORTHERN STAR | Downgrade to Sell from Hold | Deutsche Bank |
| ORE - | OROCOBRE | Downgrade to Neutral from Buy | Citi |
| WBC - | WESTPAC BANKING | Upgrade to Outperform from Neutral | Credit Suisse |
Deutsche Bank rates AMC as Buy (1) -
Deutsche Bank observes, while the rigid plastic specialty containers division is relatively small it has grown rapidly and is one of the company's key segments for growth.
Amcor has a 15% market share in North America and just 5% of the global market. Growth opportunities the broker flags include conversion to plastic from glass, additional bolt-on acquisitions and new geographies.
Buy and $17.35 target retained.
Target price is $17.35 Current Price is $16.52 Difference: $0.83
If AMC meets the Deutsche Bank target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $16.10, suggesting downside of -2.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 57.05 cents and EPS of 79.61 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 78.0, implying annual growth of N/A. Current consensus DPS estimate is 59.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.2. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 63.69 cents and EPS of 88.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.9, implying annual growth of 12.7%. Current consensus DPS estimate is 64.8, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 18.9. |
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
Ord Minnett rates AMC as Hold (3) -
In the wake of Amcor's US Investor Tour, Ord Minnett analysts point out it is their assessment earnings growth in the years ahead will be driven by integration of acquisitions and delivery of synergies, on top of benefits from restructuring initiatives, particularly the Flexibles division. Hold rating retained. Target price $15.20 (unchanged).
Target price is $15.20 Current Price is $16.52 Difference: minus $1.32 (current price is over target).
If AMC meets the Ord Minnett target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $16.10, suggesting downside of -2.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 58.38 cents and EPS of 71.65 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 78.0, implying annual growth of N/A. Current consensus DPS estimate is 59.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 21.2. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 62.70 cents and EPS of 88.05 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.9, implying annual growth of 12.7%. Current consensus DPS estimate is 64.8, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 18.9. |
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
Deutsche Bank rates AWC as Upgrade to Hold from Sell (3) -
Deutsche Bank is upgrading aluminium and alumina price forecasts by 5% and 8% in 2017 respectively. Forecasts are upgraded by 8% and 7% respectively for 2018.
The broker notes the alumina market continues to swing to surplus from deficit and then back again with Chinese refinery re-starts and curtailments. Deutsche Bank believes US$290-310/t is the equilibrium price.
The broker upgrades to Hold from Sell and the target to $1.85 from $1.65.
Target price is $1.85 Current Price is $1.86 Difference: minus $0.01 (current price is over target).
If AWC meets the Deutsche Bank target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.83, suggesting downside of -4.4% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 9.29 cents and EPS of 9.29 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.4, implying annual growth of N/A. Current consensus DPS estimate is 13.6, implying a prospective dividend yield of 7.1%. Current consensus EPS estimate suggests the PER is 13.3. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 9.31 cents and EPS of 7.98 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 14.3, implying annual growth of -0.7%. Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 7.5%. Current consensus EPS estimate suggests the PER is 13.4. |
This company reports in USD. 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
Ord Minnett rates BHP as Hold (3) -
Looking forward towards the Olympic Dam copper mine site visit in late November, Ord Minnett analysts have grabbed the opportunity to reiterate their positive view both on the big South Australian mine as well as on the Big Australian that owns and operates it.
The stockbroker currently values Olympic Dam at US$2bn, which amounts to circa $0.50 per share, excluding expansions which are yet to be sanctioned by the BHP board. Hold rating retained. Target price $25.
Target price is $25.00 Current Price is $22.15 Difference: $2.85
If BHP meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $27.39, suggesting upside of 22.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 140.11 cents and EPS of 222.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 196.7, implying annual growth of N/A. Current consensus DPS estimate is 123.0, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 11.4. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 131.35 cents and EPS of 220.38 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 177.2, implying annual growth of -9.9%. Current consensus DPS estimate is 107.6, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 12.6. |
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
Deutsche Bank rates BSL as Hold (3) -
Deutsche Bank upgrades US steel spreads for FY18 and FY19 by 22% and 18% respectively. The broker now forecasts FY18 operating earnings for BlueScope of $1255m, up 15%, and a return on invested capital of 21%.
Despite the positive momentum, the broker retains a Hold rating on valuation. Target is raised to $11.50 from $10.50.
Target price is $11.50 Current Price is $12.05 Difference: minus $0.55 (current price is over target).
If BSL meets the Deutsche Bank target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.68, suggesting upside of 10.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 16.00 cents and EPS of 124.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 123.5, implying annual growth of 99.0%. Current consensus DPS estimate is 9.7, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 10.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 40.00 cents and EPS of 132.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 120.6, implying annual growth of -2.3%. Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 10.2. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates CTX as Buy (1) -
Caltex has guided to first half net profit of $290-310m, above Citi's estimate. The broker is yet to find evidence that a decline in premium petrol volumes, in isolation, is having an adverse effect on the company's margins and believes it is premature to sound a warning on premium fuels.
The broker also believes the market is yet to give the company the benefit of the doubt on replacing lost contract earnings from Woolworths ((WOW)) business. Buy rating retained. Target is reduced to $36.11 from $36.74.
Target price is $36.11 Current Price is $31.11 Difference: $5
If CTX meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $33.12, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 135.00 cents and EPS of 234.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 225.5, implying annual growth of -2.6%. Current consensus DPS estimate is 116.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 142.00 cents and EPS of 237.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.0, implying annual growth of -1.1%. Current consensus DPS estimate is 114.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates CTX as Outperform (1) -
Caltex has guided to $290-310m in first half net profit. The mix is slightly different to what Credit Suisse assumed.
The broker notes premium volumes may be softening slightly but finds it hard to envisage an environment where margins are not compensating.
Outperform rating and $39.70 target maintained.
Target price is $39.70 Current Price is $31.11 Difference: $8.59
If CTX meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $33.12, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 115.00 cents and EPS of 230.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 225.5, implying annual growth of -2.6%. Current consensus DPS estimate is 116.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 107.00 cents and EPS of 213.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.0, implying annual growth of -1.1%. Current consensus DPS estimate is 114.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates CTX as Buy (1) -
First half earnings guidance is in line with Deutsche Bank's forecasts, for net profit of $290-310m. This guidance range represents 14-22% growth in first half levels, the broker observes.
Deutsche Bank retains a Buy rating and $35.40 target.
Target price is $35.40 Current Price is $31.11 Difference: $4.29
If CTX meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $33.12, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 EPS of 237.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 225.5, implying annual growth of -2.6%. Current consensus DPS estimate is 116.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 EPS of 265.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.0, implying annual growth of -1.1%. Current consensus DPS estimate is 114.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates CTX as Underweight (5) -
The company's first half net profit guidance is slightly below Morgan Stanley's forecasts but the company has confirmed the broker's suspicions regarding early trends on premium gasoline consumption. For the first time Caltex has reported declines in premium gasoline sales.
The broker believes margin performance from premium fuels is critical to the company's long-term earnings performance.. Net profit guidance is $290-310m while marketing and supply EBIT is guided to $360-375m.
Underweight rating and $27 target retained. In-Line industry view.
Target price is $27.00 Current Price is $31.11 Difference: minus $4.11 (current price is over target).
If CTX meets the Morgan Stanley target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $33.12, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 117.00 cents and EPS of 234.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 225.5, implying annual growth of -2.6%. Current consensus DPS estimate is 116.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 101.00 cents and EPS of 201.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.0, implying annual growth of -1.1%. Current consensus DPS estimate is 114.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates CTX as Lighten (4) -
Caltex's market update implied profit guidance above expectations, but also higher than projected corporate costs and net debt, comment the analysts. They stick to their view there's no valuation support, in particular against a background of capital intensive operations and high debt.
Ord Minnett is also not sure management will be able to offset the loss of the Woolworths ((WOW)) petrol volumes. Target price rises to $28 (was $27.50) while rating remains Lighten.
Target price is $28.00 Current Price is $31.11 Difference: minus $3.11 (current price is over target).
If CTX 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 $33.12, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 108.00 cents and EPS of 196.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 225.5, implying annual growth of -2.6%. Current consensus DPS estimate is 116.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 120.00 cents and EPS of 218.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.0, implying annual growth of -1.1%. Current consensus DPS estimate is 114.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates CTX as Buy (1) -
Caltex has released first half profit guidance, suggesting an underlying 19% increase on the previous first half and ahead of the broker's estimate. A strong performance at the Lytton refinery is the main driver, with supply & marketing falling short of the broker.
Caltex is working on a strategy to offset the loss of the Woolworths ((WOW)) fuel contract by year end. Meanwhile the broker retains Buy and a $33 target.
Target price is $33.00 Current Price is $31.11 Difference: $1.89
If CTX meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $33.12, suggesting upside of 5.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 109.00 cents and EPS of 218.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 225.5, implying annual growth of -2.6%. Current consensus DPS estimate is 116.7, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 102.00 cents and EPS of 204.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 223.0, implying annual growth of -1.1%. Current consensus DPS estimate is 114.1, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates DXS as Downgrade to Sell from Neutral (5) -
Dexus has raised $500m to buy 25% of the MLC centre, 100% of another Sydney office block and an industrial property in Melbourne. UBS is surprised at the MLC acquisition given Dexus usually shows more price discipline.
Dexus has outperformed the market by 10% and the REIT sector by 20% recently, UBS notes, largely due to being a REIT without exposure to retail. Cap rate compression over the last quarter is now largely priced in, hence the broker downgrades to Sell. Target unchanged at $9.57.
Target price is $9.57 Current Price is $10.03 Difference: minus $0.46 (current price is over target).
If DXS meets the UBS target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $9.22, suggesting downside of -7.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 44.50 cents and EPS of 63.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 59.3, implying annual growth of -54.4%. Current consensus DPS estimate is 45.1, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 16.9. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 47.20 cents and EPS of 65.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 60.0, implying annual growth of 1.2%. Current consensus DPS estimate is 46.8, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.7. |
Market Sentiment: -0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates FBU as Buy (1) -
Deutsche Bank makes changes to earnings forecasts following its quarterly currency review. As a result, FY17 forecast net profit increases marginally to NZ$389m.
Buy rating retained. Target rises to NZ$9.91 from NZ$9.90.
Current Price is $7.44. Target price not assessed.
Current consensus price target is $9.00, suggesting upside of 20.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 39.68 cents and EPS of 52.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 51.2, implying annual growth of N/A. Current consensus DPS estimate is 38.4, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 14.6. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 42.51 cents and EPS of 60.46 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 61.9, implying annual growth of 20.9%. Current consensus DPS estimate is 41.0, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 12.1. |
This company reports in NZD. 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
Citi rates FXL as Neutral (3) -
The company's strategy briefing provided few insights for Citi. While strong receivables and cost reduction expectations were set for 2-3 years time the broker believes there was insufficient information on execution.
Neutral retained. Target is lowered to $1.78 from $2.47.
Target price is $1.78 Current Price is $1.65 Difference: $0.13
If FXL meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $2.17, suggesting upside of 30.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 8.50 cents and EPS of 24.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.8, implying annual growth of 71.0%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 6.7. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 9.00 cents and EPS of 25.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.9, implying annual growth of 4.4%. Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 6.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates FXL as Buy (1) -
The company has outlined an ambition to triple its earnings in Australian cards and double its commercial book, although details are sparse Deutsche Bank observes.
The company has highlighted good volumes and traction in receivables over FY17. Nevertheless, the broker notes trading in Certegy is weak with margin compression flagged for FY18.
Deutsche Bank retains a Buy rating and reduces the target to $2.30 from $2.60.
Target price is $2.30 Current Price is $1.65 Difference: $0.65
If FXL meets the Deutsche Bank target it will return approximately 39% (excluding dividends, fees and charges).
Current consensus price target is $2.17, suggesting upside of 30.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 8.00 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.8, implying annual growth of 71.0%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 6.7. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 10.00 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.9, implying annual growth of 4.4%. Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 6.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates FXL as Neutral (3) -
At its investor day, Flexigroup outlined plans to lift its annual profit run rate in Oz card receivables to $35m from $10m, double Oz commercial receivables and grow NZ receivables. Yet FY18 will be a year of investment, and thus execution is now required, the broker warns.
The strategy appears sound but it will come at a cost, point out the analysts. The broker retains Neutral and a $2.17 target.
Target price is $2.17 Current Price is $1.65 Difference: $0.52
If FXL meets the UBS target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $2.17, suggesting upside of 30.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 7.50 cents and EPS of 24.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.8, implying annual growth of 71.0%. Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 6.7. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 9.50 cents and EPS of 26.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.9, implying annual growth of 4.4%. Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 6.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IDR as Neutral (3) -
Macquarie has considered the implications of mergers, given speculation in regards to 360 Capital's ((TGP)) intentions for its 18.2% interest.
Beyond this, recent trading updates suggest some positive momentum on leasing, reflected in asset valuations. Yet, with further expiries in the second half and FY18, the broker believes occupancy risks remain.
All up, the stock is trading above the "going concern" target and Macquarie retains a Neutral rating. Target is raised to $2.26 from $2.04.
Target price is $2.26 Current Price is $2.39 Difference: minus $0.13 (current price is over target).
If IDR meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.24, suggesting downside of -6.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 16.00 cents and EPS of 15.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.1, implying annual growth of -32.7%. Current consensus DPS estimate is 16.0, implying a prospective dividend yield of 6.7%. Current consensus EPS estimate suggests the PER is 14.0. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 16.20 cents and EPS of 15.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.2, implying annual growth of 0.6%. Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 6.8%. Current consensus EPS estimate suggests the PER is 14.0. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates ILU as Upgrade to Outperform from Neutral (1) -
Credit Suisse believes the recent share price softness presents a buying opportunity. The broker finds no reason why the strong first quarter will not carry through to the second.
The decision to re-start Jacinta Ambrosia on the back of a tight zircon market provides further confidence. The company has indicated that, if Balranald does proceed, it will be pursued with a staged approach.
Credit Suisse upgrades to Outperform from Neutral. Target is $9.40.
Target price is $9.40 Current Price is $8.09 Difference: $1.31
If ILU meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $8.45, suggesting downside of -0.8% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of 19.28 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of N/A. Current consensus DPS estimate is 5.3, implying a prospective dividend yield of 0.6%. Current consensus EPS estimate suggests the PER is 56.0. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 0.00 cents and EPS of 74.83 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 47.7, implying annual growth of 213.8%. Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 17.8. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates ILU as Overweight (1) -
Iluka has flagged a delay to commercial production at Balranald, to 2021 versus Morgan Stanley's estimated 2019. This means the company takes a non-cash write-down for the Hamilton mineral separation plant, which will be put on care and maintenance.
The re-start of Jacinta Ambrosia is earlier than anticipated, slated for January 2018 versus the broker's estimates for June 2018. This earlier start is on the back of strong market fundamentals.
Overweight rating and Attractive industry view retained. Target is $9.30.
Target price is $9.30 Current Price is $8.09 Difference: $1.21
If ILU meets the Morgan Stanley target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $8.45, suggesting downside of -0.8% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 14.00 cents and EPS of 10.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.2, implying annual growth of N/A. Current consensus DPS estimate is 5.3, implying a prospective dividend yield of 0.6%. Current consensus EPS estimate suggests the PER is 56.0. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 13.00 cents and EPS of 37.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 47.7, implying annual growth of 213.8%. Current consensus DPS estimate is 10.6, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 17.8. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates INA as Add (1) -
The company has reiterated FY17 guidance for $30m in EBIT. Morgans removes the Capricorn Coast acquisition from estimates, and factors in some higher portfolio costs.
Despite a step down in FY18 forecasts the broker believes its prior estimates were readily achievable had the company not walked form the Queensland acquisition.
Add rating retained. Target is reduced to $3.00 from $3.04.
Target price is $3.00 Current Price is $2.69 Difference: $0.31
If INA meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 10.20 cents and EPS of 12.68 cents. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 10.60 cents and EPS of 15.17 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates MND as Sell (5) -
The company has been awarded a $600m contract from Woodside ((WPL)) to provide asset maintenance services at the gas production facilities in Western Australia. The contract is for five years and has a further two 1-year extension options.
Deutsche Bank believes the contract highlights the company's ability to diversify into oil & gas maintenance along with its strong relationship with customers. Target is raised to $8.95 from $8.90 and a Sell rating is retained on valuation.
Target price is $8.95 Current Price is $13.72 Difference: minus $4.77 (current price is over target).
If MND meets the Deutsche Bank target it will return approximately minus 35% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $9.78, suggesting downside of -29.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 52.00 cents and EPS of 62.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 62.7, implying annual growth of -12.6%. Current consensus DPS estimate is 52.5, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 22.1. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 54.00 cents and EPS of 68.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.8, implying annual growth of -7.8%. Current consensus DPS estimate is 48.5, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 24.0. |
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates NST as Downgrade to Sell from Hold (5) -
Deutsche Bank downgrades mining sector earnings in 2017 by an average -3-4%. The broker downgrades Northern Star to Sell from Hold on valuation. Target is raised to $4.30 from $4.10.
Target price is $4.30 Current Price is $4.85 Difference: minus $0.55 (current price is over target).
If NST meets the Deutsche Bank target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.47, suggesting downside of -6.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 7.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 32.4, implying annual growth of 28.6%. Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 12.00 cents and EPS of 47.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 48.9, implying annual growth of 50.9%. Current consensus DPS estimate is 12.2, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 9.7. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates ORE as Downgrade to Neutral from Buy (3) -
Citi downgrades to Neutral, High Risk on the back of the recent share price performance.
The company has downgraded FY17 production guidance to 11,700-800 tonnes of lithium carbonate equivalent from earlier guidance of around 12,300t, following adverse weather conditions at Olaroz.
The broker believes the announcement will have limited impact on valuation and that the company has sufficient cash to complete the necessary optimisation and stabilise phase one production. Target is $3.90.
Target price is $3.90 Current Price is $3.56 Difference: $0.34
If ORE meets the Citi target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $4.35, suggesting upside of 29.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 0.00 cents and EPS of 8.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.7, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 38.6. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 0.00 cents and EPS of 16.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 16.6, implying annual growth of 90.8%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 20.2. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates RMD as Buy (1) -
Channel checks suggest ResMed's new mask is quietly taking market share, the broker notes, although there is some conversion to the new mask in the established patient pool.
An emerging trend is the use of memory foam in masks which ResMed advises should be replenished every month, at a cost to health insurers. Meanwhile, feedback suggests US diagnosis of sleep apnoea continues to grow at around 6-8%.
Buy and US$78.47 target retained.
Current Price is $10.33. Target price not assessed.
Current consensus price target is $9.90, suggesting downside of -3.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 17.51 cents and EPS of 34.76 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.5, implying annual growth of N/A. Current consensus DPS estimate is 17.7, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 29.0. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 19.55 cents and EPS of 42.16 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.3, implying annual growth of 13.5%. Current consensus DPS estimate is 19.0, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 25.6. |
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
Deutsche Bank rates SGM as Hold (3) -
Demand for bulk commodities remains constructive although Deutsche Bank observes iron ore and scrap prices are likely to fall on swing supply.
Prices are then expected to recover from the second half of FY18 as supply exits the market.
The broker revises forecasts for Sims' FY17 net profit down by -2%. Hold rating retained. Target rises to $12.86 from $12.81.
Target price is $12.86 Current Price is $13.21 Difference: minus $0.35 (current price is over target).
If SGM meets the Deutsche Bank target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $13.39, suggesting downside of -1.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 37.00 cents and EPS of 58.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 70.4, implying annual growth of 31.1%. Current consensus DPS estimate is 39.7, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 19.4. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 32.00 cents and EPS of 74.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.4, implying annual growth of 18.5%. Current consensus DPS estimate is 42.0, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 16.4. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates VCX as Accumulate (2) -
Vicinity Centres has announced CEO Angus McNaughton will retire at the end of 2017 and Ord Minnett finds the news "a little disruptive". No major decisions should be expected until a new CEO has been found, suggest the analysts. They also believe this will be a highly sought-after position. Accumulate. Target $3.20.
Target price is $3.20 Current Price is $2.76 Difference: $0.44
If VCX meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $2.95, suggesting upside of 7.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Ord Minnett forecasts a full year FY17 dividend of 18.10 cents and EPS of 18.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.3, implying annual growth of -24.6%. Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 15.0. |
Forecast for FY18:
Ord Minnett forecasts a full year FY18 dividend of 18.90 cents and EPS of 19.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 18.9, implying annual growth of 3.3%. Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 14.5. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates WBC as Upgrade to Outperform from Neutral (1) -
Credit Suisse upgrades to Outperform from Neutral, based on the relative value and potential catalysts in APRA's upcoming capital announcements as well as the latest round of mortgage re-pricing.
The latter is considered to be firming up the company's near-term net interest margin outlook. Target is $34.
Target price is $34.00 Current Price is $30.19 Difference: $3.81
If WBC meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $33.08, suggesting upside of 9.4% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 188.00 cents and EPS of 240.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 237.2, implying annual growth of 5.6%. Current consensus DPS estimate is 188.0, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 12.7. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 188.00 cents and EPS of 245.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 243.4, implying annual growth of 2.6%. Current consensus DPS estimate is 188.9, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 12.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Summaries
| AMC - | AMCOR | Buy - Deutsche Bank | Overnight Price $16.52 |
| Hold - Ord Minnett | Overnight Price $16.52 | ||
| AWC - | ALUMINA | Upgrade to Hold from Sell - Deutsche Bank | Overnight Price $1.86 |
| BHP - | BHP BILLITON | Hold - Ord Minnett | Overnight Price $22.15 |
| BSL - | BLUESCOPE STEEL | Hold - Deutsche Bank | Overnight Price $12.05 |
| CTX - | CALTEX AUSTRALIA | Buy - Citi | Overnight Price $31.11 |
| Outperform - Credit Suisse | Overnight Price $31.11 | ||
| Buy - Deutsche Bank | Overnight Price $31.11 | ||
| Underweight - Morgan Stanley | Overnight Price $31.11 | ||
| Lighten - Ord Minnett | Overnight Price $31.11 | ||
| Buy - UBS | Overnight Price $31.11 | ||
| DXS - | DEXUS PROPERTY | Downgrade to Sell from Neutral - UBS | Overnight Price $10.03 |
| FBU - | FLETCHER BUILDING | Buy - Deutsche Bank | Overnight Price $7.44 |
| FXL - | FLEXIGROUP | Neutral - Citi | Overnight Price $1.65 |
| Buy - Deutsche Bank | Overnight Price $1.65 | ||
| Neutral - UBS | Overnight Price $1.65 | ||
| IDR - | INDUSTRIA REIT | Neutral - Macquarie | Overnight Price $2.39 |
| ILU - | ILUKA RESOURCES | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $8.09 |
| Overweight - Morgan Stanley | Overnight Price $8.09 | ||
| INA - | INGENIA COMMUNITIES GROUP | Add - Morgans | Overnight Price $2.69 |
| MND - | MONADELPHOUS GROUP | Sell - Deutsche Bank | Overnight Price $13.72 |
| NST - | NORTHERN STAR | Downgrade to Sell from Hold - Deutsche Bank | Overnight Price $4.85 |
| ORE - | OROCOBRE | Downgrade to Neutral from Buy - Citi | Overnight Price $3.56 |
| RMD - | RESMED | Buy - UBS | Overnight Price $10.33 |
| SGM - | SIMS METAL MANAGEMENT | Hold - Deutsche Bank | Overnight Price $13.21 |
| VCX - | VICINITY CENTRES | Accumulate - Ord Minnett | Overnight Price $2.76 |
| WBC - | WESTPAC BANKING | Upgrade to Outperform from Neutral - Credit Suisse | Overnight Price $30.19 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 12 |
| 2. Accumulate | 1 |
| 3. Hold | 9 |
| 4. Reduce | 1 |
| 5. Sell | 4 |
Friday 23 June 2017
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Disclaimer:
The content of this information does in no way reflect the opinions of
FNArena, or of its journalists. In fact we don't have any opinion about
the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
and comment on. By doing so we believe we provide intelligent investors
with a valuable tool that helps them in making up their own minds, reading
market trends and getting a feel for what is happening beneath the surface.
This document is provided for informational purposes only. It does not
constitute an offer to sell or a solicitation to buy any security or other
financial instrument. FNArena employs very experienced journalists who
base their work on information believed to be reliable and accurate, though
no guarantee is given that the daily report is accurate or complete. Investors
should contact their personal adviser before making any investment decision.
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