Australian Broker Call

Macquarie rates AGL as Underperform (5) -

Macquarie anticipates electricity prices have reached a peak, especially as more power generation is acquired.

The company has formalised the development of Barker Inlet at around 210MW and, as these services come on line, it will progressively retire four Torrens A units or 480MW from July 2019.

Macquarie retains an Underperform rating and $24.30 target.

Target price is $24.30 Current Price is $24.96 Difference: minus $0.66 (current price is over target).
If AGL meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.99, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates AGL as Hold (3) -

The company has announced the development of a new gas-fired plant at Barker Inlet in South Australia. First generation is expected in the March quarter 2019.

Ord Minnett finds it difficult to judge whether the supply response is enough to address reliability issues for electricity and therefore, for the next few months, government policy changes remain a substantial risk for the company.

This leaves the broker maintaining a Hold rating. Target is reduced to $28.00 from $28.50.

Target price is $28.00 Current Price is $24.96 Difference: $3.04
If AGL meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $26.99, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

UBS rates AGL as Buy (1) -

The company has approved the construction of the Barker Inlet power station adjacent to the Torrens Island power station, in South Australia.

Barker Inlet is expected to be on line by early 2019. AGL will proceed with the closure of the four units at Torrens A while the Torrens B station will remain in operation.

UBS believes the cost savings on gas alone justifies the investment as more efficient generation could save $48m per annum on gas use.

UBS retains a Buy rating and $29.50 target.

Target price is $29.50 Current Price is $24.96 Difference: $4.54
If AGL meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $26.99, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Credit Suisse rates AMC as Neutral (3) -

The euro has strengthened by around 10% against the US dollar. Credit Suisse calculates the company generates around 35% of its revenue in euro and reports in US dollars.

The broker remains positively disposed towards the stock although it is considered to be trading near fair value. The company has guided to expect a strong second half in flexibles and benefits from the restructuring program and the acquisition of Alusa.

Credit Suisse upgrades FY18 and FY19 forecasts for earnings per share by around 3.5%.  Target is raised to $15.70 from $15.10. Neutral retained.

Target price is $15.70 Current Price is $15.95 Difference: minus $0.25 (current price is over target).
If AMC meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.66, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.3

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

Deutsche Bank rates ANZ as Hold (3) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Hold rating retained. Target price drops to $30 from $32.70.

Target price is $30.00 Current Price is $27.54 Difference: $2.46
If ANZ meets the Deutsche Bank target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $30.56, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.2

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

Macquarie rates APA as Neutral (3) -

Final recommendations have been released for a new framework for gas pipelines.  The recommendations are broadly in line with those outlined in the draft.

Macquarie observes the final recommendation provides another blow for the company, and largely solidifies the earnings headwinds associated with increased pricing transparency and disclosure.

The company's alternative grid pricing proposals have been rejected. Macquarie did not find the outcome surprising but notes it highlights the sensitivity of the share price to ongoing regulatory announcements.

Neutral rating retained. Target is reduced to $9.00 from $9.61.

Target price is $9.00 Current Price is $9.26 Difference: minus $0.26 (current price is over target).
If APA meets the Macquarie target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.08, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Deutsche Bank rates BEN as Upgrade to Hold from Sell (3) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Bendigo and Adelaide Bank is the sole recipient of an upgrade in rating; to Hold from Sell, following share price weakness.

Target price is $10.40 Current Price is $10.35 Difference: $0.05
If BEN meets the Deutsche Bank target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $11.01, suggesting upside of 4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.7

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

UBS rates BLD as Buy (1) -

UBS remains comfortable that the up cycle in Australian construction materials will have a longer tail and extend through FY19. This expectation is underpinned by spending on roads, highways and bridges, which should offset softness from residential construction.

Overall the broker expects concrete demand to rise slightly and New South Wales will benefit the most, given buoyant demand in Sydney.

The broker reduces FY17 estimates for  EBIT by -2% and FY18 by -6% to reflect higher amortisation post the acquisition of Headwaters. Buy rating retained. Target rises to $7.50 from $6.90.

Target price is $7.50 Current Price is $6.82 Difference: $0.68
If BLD meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $7.05, suggesting upside of 4.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.7

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

Deutsche Bank rates BOQ as Hold (3) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Target price falls to $11.10 from $11.90. Hold rating retained.

Target price is $11.10 Current Price is $10.73 Difference: $0.37
If BOQ meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $11.60, suggesting upside of 6.9% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Deutsche Bank rates CBA as Hold (3) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Target price drops to $80.80 from $83.80. Hold rating retained.

Target price is $80.80 Current Price is $78.50 Difference: $2.3
If CBA meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $80.35, suggesting upside of 1.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

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

UBS now believes the company can sustain around 11% volume growth for plasma to FY25 to meet the robust end-product demand globally.

The broker finds it increasingly apparent that competitor Shire will pursue a less capital intensive brand & price strategy. This confirms a  long-term structural advantage to CSL.

The broker upgrades to Buy from Neutral and raises the target to $145.00 from $132.15.

Target price is $145.00 Current Price is $131.28 Difference: $13.72
If CSL meets the UBS target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $135.05, suggesting downside of -0.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Market Sentiment: 0.8

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

Morgan Stanley rates CTX as Downgrade to Underweight from Equal-weight (5) -

Morgan Stanley believes consumption of premium petrol across Australia has peaked and is now declining and lower volumes are likely to lead to price-based competition across retailers, particularly for premium fuels.

Moreover, the Australian consumer is under pressure and this is likely to affect premium fuel volumes further, and there is a global movement under way to cleaner fuels.

The broker also notes a growing probability that the Australian government will ban regular unleaded and impose lower sulphur limits on all fuel types.

The broker believes investors will price Caltex on an underlying basis excluding the Woolworths ((WOW)) supply contract and downgrades to Underweight from Equal-weight.  Target is reduced to $27.00 from  $32.60. In-Line industry view.

Target price is $27.00 Current Price is $33.04 Difference: minus $6.04 (current price is over target).
If CTX meets the Morgan Stanley target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $33.16, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Deutsche Bank rates CWY as Buy (1) -

The analysts note positive momentum is continuing with Deutsche Bank analysts pointing out the Brisbane council post collections contract provides the company with long term recurring earnings with minimal capital commitment.

The contract is viewed as a positive step in management's continuing effort to improve earnings quality and returns. On the back of this contract, the price target has lifted to $1.50 from $1.25. Buy rating retained, while estimates have been left untouched.

Target price is $1.50 Current Price is $1.39 Difference: $0.11
If CWY meets the Deutsche Bank target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.25, suggesting downside of -10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Morgans rates CWY as Hold (3) -

Cleanaway has won the contract for waste/recycling post-collection from Brisbane City Council. While a positive, the earnings impact is small, the broker notes, and the company missed out on the far more lucrative collection contract.

The broker retains a Hold rating on share price strength while noting there is plenty of upside were the stock to re-rate to the PE multiples of US peers. Target rises to $1.31 from $1.30.

Target price is $1.31 Current Price is $1.39 Difference: minus $0.08 (current price is over target).
If CWY meets the Morgans target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.25, suggesting downside of -10.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Credit Suisse rates FMG as Outperform (1) -

Credit Suisse observes the price pressure on iron ore in the March quarter is expected to extend through the June quarter and beyond.

Port stocks remained elevated and market commentary suggests large discounts on lower grade products continue. The broker finds calling an end to the trend for higher grade ores is difficult.

The broker still forecasts a return to around 85% price realisation in the long term for the company's products and any change to this assumption would be material for valuation. Outperform rating and $6.50 target retained.

Target price is $6.50 Current Price is $4.74 Difference: $1.76
If FMG meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $6.28, suggesting upside of 33.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

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

Citi rates GMG as Neutral (3) -

Citi analysts report the main push back they have been receiving from property specialists when it comes to opinion on Goodman Group shares is the shares look really, really expensive.

Taking a generalist view, however, the analysts compare the stock against the rest of the market and conclude, on a non-property oriented approach, the shares actually look OK.

Their view is thus the shares do not look overly expensive, as long as growth continues to be achieved. Citi analysts suggest it is still opportune to put in place a pair trading strategy involving underweight Westfield ((WFD)) and overweight Goodman. Target unchanged at $7.74. Neutral.

Target price is $7.74 Current Price is $8.45 Difference: minus $0.71 (current price is over target).
If GMG meets the Citi target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.06, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Deutsche Bank rates GMG as Hold (3) -

Goodman Group continues performing strongly and management has again confirmed guidance for the current financial year. Deutsche Bank analysts, however, cannot get past what looks like an elevated valuation and thus they stick to a Hold rating.

The price target has actually lost 1c to $8.53. Estimates have dropped slightly on lower forecasts for growth in Funds under Management (FuM).

Target price is $8.53 Current Price is $8.45 Difference: $0.08
If GMG meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.06, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Macquarie rates GMG as Outperform (1) -

Macquarie observes the update from the company affirms its consistency. There was no significant positive news and nothing of concern.

 The broker does not believe the stock is cheap but the certainty of near-term earnings, options on the balance sheet and potential upside from urban renewal projects suggests the stock will continue to outperform its peers.

Outperform retained. Target rises to $8.52 from $7.71.

Target price is $8.52 Current Price is $8.45 Difference: $0.07
If GMG meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $8.06, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Morgan Stanley rates GMG as Overweight (1) -

There were no new catalysts to get excited about, Morgan Stanley observes from the quarterly update, and the company appears in good shape to deliver superior growth in the next few years.

Against a backdrop of a deteriorating news in many other parts of the sector and market the broker believes this is not a bad thing.

Overweight and $8.20 target retained. Industry view is Cautious.

Target price is $8.20 Current Price is $8.45 Difference: minus $0.25 (current price is over target).
If GMG meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.06, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Ord Minnett rates GMG as Downgrade to Lighten from Hold (4) -

Ord Minnett observes the operating performance was solid in the third quarter. Development yields are increasing and work in progress stated at $3.5bn.

 Despite the good numbers, Ord Minnett downgrades to Lighten from Hold on valuation grounds as the stock is trading on a forward price/earnings ratio of 19.7x.

Historically,  the broker observes stock traded at a price/earnings discount versus the sector but the recent strong run has meant the relationship has inverted to a premium, and in the last 12 months the stock has recorded a total shareholder return of 21% versus the sector's gain of just 2%. Target is raised to $7.80 from $7.60.

Target price is $7.80 Current Price is $8.45 Difference: minus $0.65 (current price is over target).
If GMG 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 $8.06, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

UBS rates GMG as Neutral (3) -

UBS observes the current underlying business trends are sound but these have not matched the stock's performance. The long-term  outlook for logistics assets remains strong and the broker acknowledges the company opts for quality.

Europe continues to experience the bulk of development commencements and the broker notes development yields are robust at 7.7% as leasing demand remains sound.

The company anticipates the disposal of  ABPP in coming months. With no debt to retire, in order to offset the earnings impact and clean up the capital structure, the broker expects the company will look to redeem the hybrids. Neutral rating and $7.68 target retained.

Target price is $7.68 Current Price is $8.45 Difference: minus $0.77 (current price is over target).
If GMG meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.06, suggesting downside of -3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Morgans rates MFG as Add (1) -

May data show Magellan's funds under management have risen 12.2% year to date, mostly due to fund performance but with inflows net positive. The core funds are tracking 200 basis points above benchmarks YTD, the broker notes.

The broker sees upside risk supported by a rebound in the Global Equities Fund YTD, and has also adjusted for higher expected performance fees. Target rises to $27.80 from $26.80. With PE tracking well under the stock's long term average, the broker retains Add.

Target price is $27.80 Current Price is $26.86 Difference: $0.94
If MFG meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $26.80, suggesting downside of -1.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.8

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

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

Morgans has trimmed its target for Mac Atlas to $5.98 from $6.05 to reflect the performance fee the broker expects Mac Atlas to owe Macquarie Group ((MQG)) for this financial year.

Otherwise, a co-investor in the APRR has announced it will exit its 31.2% stake. Mac Atlas has sixty days to decide whether or not and how much of the stake it might acquire. A capital raising may be required, Morgans notes. Given a lot of uncertainty, the broker pulls back to Hold.

Target price is $5.98 Current Price is $5.96 Difference: $0.02
If MQA meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $5.57, suggesting downside of -4.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Deutsche Bank rates MQG as Hold (3) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Target price reduces to $90.30 from $96.20. Hold rating left untouched.

Target price is $90.30 Current Price is $86.75 Difference: $3.55
If MQG meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $87.79, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.1

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

Deutsche Bank rates NAB as Buy (1) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Target falls to $32.40 from $34.30. Buy rating retained.

Target price is $32.40 Current Price is $29.35 Difference: $3.05
If NAB meets the Deutsche Bank target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $31.56, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.1

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

Citi rates RCG as Buy (1) -

Looking at the USA, Citi analysts note casual athletic footwear has experienced its second consecutive month of low single digit growth. This was preceded by five months of uninterrupted declines.

Could a turnaround be in the making? The analysts observe many components of RCG Corp are still doing it tough, but then the valuation of the shares has now sunk to -40% below the ASX300's valuation whereas historically a 1% premium used to be normal.

Buy rating retained, alongside a 88c price target. No changes have been made to forecasts.

Target price is $0.88 Current Price is $0.60 Difference: $0.28
If RCG meets the Citi target it will return approximately 47% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.5

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

Morgans rates REG as Hold (3) -

Issues at Regis' Darwin facility have led the Dept of Health to impose sanctions. Regis acquired the facility two years ago and ensures management is working hard to fix the issues, the broker reports.

Meanwhile, the broker has reduced its resident fee revenue growth assumption, having previously assumed fee growth could offset cuts to govt subsidies. Earnings forecasts for FY18-19 have been trimmed. Target falls to $4.54 from $4.99. Hold retained.

Target price is $4.54 Current Price is $4.17 Difference: $0.37
If REG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $4.80, suggesting upside of 15.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.3

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

Deutsche Bank rates SGM as Hold (3) -

The company held an Investor Day in the USA and Deutsche Bank analysts witnessed how management reiterated its target to achieve a FY18 Return on Capital of at least 10%. This is higher than their own projections.

Somewhat jokingly, the analysts do note Sims management couldn't give any closure whether this target will be achieved in the beginning, middle or end of FY18. Hold rating retained on valuation. Target lifts to $12.81 from $12.79.

Target price is $12.81 Current Price is $13.37 Difference: minus $0.56 (current price is over target).
If SGM meets the Deutsche Bank target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.31, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.4

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

Credit Suisse rates STO as Upgrade to Outperform from Neutral (1) -

With oil at the lower end of its trading range and much weakness priced into the stock since the Australian domestic gas security mechanism was first floated, Credit Suisse envisages some short-term upside for the stock.

The mechanism may hurt Santos but the broker believes much of this hurt has been priced in. Acknowledging a brave call, the broker upgrades to Outperform from Neutral. Target is $3.80.

Target price is $3.80 Current Price is $3.17 Difference: $0.63
If STO meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $4.33, suggesting upside of 34.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY17:

Forecast for FY18:

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 VOC as Hold (3) -

Deutsche Bank is taking the view that both TPG Telecom ((TPG)) and Telstra ((TLS)) stand to benefit from the present situation at Vocus. Whatever the outcome from current private equity courting, suggest the analysts, it will distract management at Vocus.

Were the company to end up under new private equity ownership, the current CEO will leave, say the analysts, which will also benefit TPG and Telstra. Because Vocus has already proved an aggressive competitor, there would be no change under new ownership.

No changes made to Hold rating but price target was lifted to $3.50 (was $2.23), equal to the indicative offer from KKR. Interestingly, the analysts calculate the $3.50 bid equals a negative internal rate of return for KKR of -8%.

Target price is $3.50 Current Price is $3.48 Difference: $0.02
If VOC meets the Deutsche Bank target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Macquarie rates VOC as Neutral (3) -

The company has received a preliminary, indicative and non-binding proposal from KKR at $3.50 a share. The offer price appears reasonable in the context of the last close in general market valuations, in Macquarie's opinion, albeit not a huge premium and well below recent trading levels.

Macquarie upgrades the target to $3.60 from $3.00, reflecting on a risk-weighted basis the possibility of a higher offer by KKR, or the emergence of an additional bidder. Fundamental valuation is unchanged. Neutral rating retained.

Target price is $3.60 Current Price is $3.48 Difference: $0.12
If VOC meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Morgans rates VOC as Upgrade to Hold from Reduce (3) -

KKR's $3.50 bid for Vocus is preliminary, indicative, non-binding, and comes with no less than 13 exit clauses. There is therefore no guarantee the bid will proceed, Morgans notes.

The market has nevertheless priced in success, and even if nothing happens, Morgans sees little further downside risk to earnings from here. Target increased to $3.50 from $1.97 to match the bid. Upgrade to Hold.

Target price is $3.50 Current Price is $3.48 Difference: $0.02
If VOC meets the Morgans target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.14, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Ord Minnett rates VOC as Hold (3) -

The company has received a non-binding offer of $3.50 a share from private equity firm KKR, valuing it at an enterprise value to operating earnings multiple of around 8.5x.

Ord Minnett expects the board to seriously consider the offer, given the loss of confidence in management after the -23% reduction in profit guidance a month ago. The broker would also not rule out the possibility of another bidder emerging. Hold rating maintained. Target is $3.30.

Target price is $3.30 Current Price is $3.48 Difference: minus $0.18 (current price is over target).
If VOC meets the Ord Minnett target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.14, suggesting downside of -11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.0

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

Deutsche Bank rates WBC as Buy (1) -

Deutsche Bank's sector update is all about "mitigation" with the analysts taking the view the major banks should be able to offset the negative impact from the government's levy by half, reducing the impact to -1-2% per annum.

On this basis, Deutsche Bank suggests all bad news has been priced in, plus some. Top picks in the sector remain National Australia Bank and Westpac. Target falls to $33.50 from $35.60. Buy rating retained.

Target price is $33.50 Current Price is $29.71 Difference: $3.79
If WBC meets the Deutsche Bank target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $33.08, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: 0.1

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

Citi rates WES as Sell (5) -

Citi analysts have adopted the view Wesfarmers is now in a downward cycle, with pressure on Coles and UK expansion suffering losses.

Earnings estimates have been lowered. Sell rating retained. Price target falls to $38.10 from $41. Citi analysts anticipate dividend support will kick in at lower share prices.

Target price is $38.10 Current Price is $40.23 Difference: minus $2.13 (current price is over target).
If WES meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Credit Suisse rates WES as Neutral (3) -

Credit Suisse does not envisage any particular opportunities to adjust valuation until the company has turned around its under-performing businesses.

The broker believes a period of declining supermarket margins is unavoidable and there is a substantial risk of a downward spiral of destructive price-based competition through FY18.

While the UK pilot stores for Bunnings appear to be in line with management's expectations more time and a track record are needed before the broker will include the expansion as a likely contributor to profit.

Neutral rating retained. Target is raised to $42.95 from $42.86.

Target price is $42.95 Current Price is $40.23 Difference: $2.72
If WES meets the Credit Suisse target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Deutsche Bank rates WES as Sell (5) -

Deutsche Bank reports Woolworths' ((WOW)) resurgence and the need for heavy investment is putting pressure on Coles, which was once again highlighted at the Strategy Day, and no, none of it should come as a surprise.

The analysts have pared back their estimates, anticipating growth at Bunnings will slow down, at some point. Estimates have been reduced by -2-4% annually. Sell rating retained.

Interestingly, the analysts highlight they continue rating Woolworths as a Buy on the premise the war among supermarkets will not become irrational. Price target drops to $38 from $40.

Target price is $38.00 Current Price is $40.23 Difference: minus $2.23 (current price is over target).
If WES meets the Deutsche Bank target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Macquarie rates WES as Outperform (1) -

The company provided limited financial information at its strategy briefing but Macquarie obtained insights into the management's current focus and longer-term priorities.

The investment in price and service at Coles has made a bigger impact than previously expected and this suggests a decline in EBIT of at least -$200m in the second half. A restructuring program is being undertaken at Kmart and Target to optimise portfolios and this includes a reduction in Target stores and some re-branding to Kmart.

Macquarie believes the portfolio is high-quality and the balance sheet and cash flow enable a high dividend pay-out ratio. Outperform retained. Target is reduced to $43.55 from $45.00.

Target price is $43.55 Current Price is $40.23 Difference: $3.32
If WES meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Morgans rates WES as Hold (3) -

It is of no surprise that Wesfarmers intends to counter Woolworths' ((WOW)) resurgence thanks to price investment by returning fire. What does surprise the broker is just how much money will be spent to revive Coles' fortunes in an increasingly competitive environment.

The war threatens to be mutually destructive. Meanwhile, Bunnings UK & Ireland is not performing as well as hoped. The broker has cut forecast earnings and its target to $39.26 from $42.97. Hold retained.

Target price is $39.26 Current Price is $40.23 Difference: minus $0.97 (current price is over target).
If WES 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 $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Ord Minnett rates WES as Hold (3) -

The main negatives from the strategy update, as Ord Minnett observes, are the impact of the investment in price at Coles, losses in the UK business for Bunnings and the outlook for Target.

This is countered by strong performance  for Bunnings in Australasia  and the industrials division. Ord Minnett retains a Hold rating and reduces the target to $44 from $45.

Target price is $44.00 Current Price is $40.23 Difference: $3.77
If WES meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

UBS rates WES as Neutral (3) -

UBS has become more negative on the outlook for the company after its strategy update. Second half EBIT for Coles continues to decline as investment in price, service and availability has been stepped up significantly.

A return to profitability for Target is also likely to take longer than the broker expected while UK trading for Bunnings is below expectations. UBS lowers FY17-19 forecasts for earnings by -1-3%. Neutral retained. Target drops to $41.30 from $42.10.

Target price is $41.30 Current Price is $40.23 Difference: $1.07
If WES meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $40.40, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.3

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

Deutsche Bank rates WLD as Hold (3) -

Deutsche Bank views the $34.9m sale of the Ocean Outback as incrementally positive for Wellard in yet another step to fix the balance sheet during a time of cyclical weakness.

They also note the company realised a -30% discount to book value on the sale. A mix of changes to forecasts and valuations has been made and incorporated into refreshed projections.

Price target loses 1c to 21c. Hold rating retained. The analysts do warn investors management has indicated it is currently reviewing the carrying value of its assets; impairment charges should be expected at the upcoming interim results release.

Target price is $0.21 Current Price is $0.19 Difference: $0.025
If WLD meets the Deutsche Bank target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $0.18, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY17:

Forecast for FY18:

Market Sentiment: -0.5

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