Australian Broker Call

Morgans rates AVN as Add (1) -

The company has completed the internalisation of its management, funded by new securities and debt from existing facilities. Morgans had not factored in the proposed transaction to forecasts and now adjusts its numbers accordingly.

FY19 guidance for funds from operations is now 18.4c. The broker notes the portfolio is weighted towards metro properties with a weighted average lease expiry of four years. Income is supported by leases to a diverse range of tenants.

Morgans maintains an Add rating and reduces the target to $2.28 from $2.34.

Target price is $2.28 Current Price is $2.05 Difference: $0.23
If AVN meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.21, suggesting upside of 7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

UBS rates CAR as Buy (1) -

Facebook is set to launch a car dealership inventory listing service in Australia, grouping together several Australian on-line auto listing services. One of these is Carsales.

The broker does not believe Facebook poses too much of a threat. Carsales will not show all of its inventory on Facebook and history suggests horizontal services (offering a group of platforms) tend to lack the same depth of data and detail as pure vertical services such as Carsales. Carsales will remain "contextually more relevant", the broker believes.

Buy and $13.50 target retained.

Target price is $13.50 Current Price is $11.93 Difference: $1.57
If CAR meets the UBS target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $15.52, suggesting upside of 30.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.9

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

Credit Suisse rates CSL as Outperform (1) -

Credit Suisse assesses the earnings potential in the transplant market and believes there is a significant opportunity for CSL's C1-INH Berinert.  A phase 3 trial, with estimated completion in 2023, is being conducted for the added indication of treating antibody-mediated rejection in renal transplants.

If used as a treatment option, the broker estimates it could add up to US$80m to revenue at full ramp up in FY24. On a blue sky scenario, if achieving 80% market share, the broker estimates up to 3% accretion to earnings per share.

Credit Suisse maintains an Outperform rating and considers the stock undervalued. Target is $230.

Target price is $230.00 Current Price is $192.70 Difference: $37.3
If CSL meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $213.83, suggesting upside of 11.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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 CTX as Resume Coverage with Hold (3) -

Deutsche Bank resumes coverage with a Hold rating and $29 target. The broker observes the company is embarking on the second stage of its transformation, having converted Kurnell, with the retail operations being reviewed in order to capture more non-fuel sales through the new format.

Deutsche Bank believes there is opportunity to expand retail earnings but the sales uplift required to achieve the company's target is optimistic and there is additional risk around corporatising franchise sites.

Target price is $29.00 Current Price is $26.93 Difference: $2.07
If CTX meets the Deutsche Bank target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $32.01, suggesting upside of 18.8% (ex-dividends)

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Macquarie rates CTX as Outperform (1) -

Woolworths ((WOW)) will divest its petrol division to EG Group. Macquarie believes the divestment is modestly negative for Caltex in terms of both valuation and industry structure.

Nevertheless, the broker believes the valuation remains compelling because of a defensive core business and high-quality assets.

Outperform rating. Target is $34.

Target price is $34.00 Current Price is $26.93 Difference: $7.07
If CTX meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $32.01, suggesting upside of 18.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Deutsche Bank rates DXS as Hold (3) -

Dexus, which currently owns three office assets in Perth, believes the office market there has bottomed and is forecasting 2-4% effective rental growth. Assumptions are supported by limited office supply until 2023 and a recovery in mining employment.

Deutsche Bank highlights the company's belief that valuation gains exist going forward, as assets are currently being sold at 30% below replacement cost.

Hold rating and $10.50 target maintained.

Target price is $10.50 Current Price is $10.16 Difference: $0.34
If DXS meets the Deutsche Bank target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $10.62, suggesting upside of 4.5% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

Credit Suisse rates FAR as Outperform (1) -

The Samo-1 well in The Gambia was unsuccessful, with the main target horizons water bearing. While a disappointing outcome Credit Suisse is shocked by the share price response.

The broker suggests that, at these levels, if the market will not recognise the value in the SNE project, which is progressing towards an investment decision, and FAR is an inexpensive avenue to obtain exposure to the project, then another party could well do so.

Credit Suisse remains comfortable that the result from Samo-1 is far from a "game changer" and the sell-off creates an opportunity for those investors willing to take a longer term view.

Outperform rating and $0.14 target maintained.

Target price is $0.14 Current Price is $0.08 Difference: $0.06
If FAR meets the Credit Suisse target it will return approximately 75% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgan Stanley rates FAR as Overweight (1) -

The company's Samo-1 well has been unsuccessful. Morgan Stanley notes the market reacted strongly to the announcement and presumes the negative reaction centred on the fear of an equity raising over coming months at lower prices.

The broker considers the pullback an opportunity, given the inherent value in the SNE discovery. Overweight retained. Target is $0.14. Industry view is Attractive.

Target price is $0.14 Current Price is $0.08 Difference: $0.06
If FAR meets the Morgan Stanley target it will return approximately 75% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates JHX as Buy (1) -

Citi believes the sell-off after the second quarter results is overdone. US housing markets may have struck a soft patch but momentum is recovering and margin should be restored in the second half.

Weather disruptions, US elections and rising interest rates were cited as likely factors that slowed activity. The company has reduced FY19 net profit guidance to US $280-320m, down by -6% at the mid point.

Citi maintains a Buy rating and reduces the target to $21 from $25.

Target price is $21.00 Current Price is $16.80 Difference: $4.2
If JHX meets the Citi target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $21.37, suggesting upside of 27.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.9

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

Macquarie rates JHX as Outperform (1) -

Second quarter results were below Macquarie's expectations. The Fermacell integration continues to perform and aggregate one-off costs are now at the lower end of prior guidance. North America's performance was weaker than expected and cost pressures are expected to weigh.

FY19 net profit guidance has been lowered to US$280-320m. As a result Macquarie lowers expectations by -6% for FY19 and -6.6% for FY20 net profit. This is based on lower margins but also more moderate market growth forecasts.

Macquarie believes the stock has over-reacted to the result and maintains an Outperform rating. Target is reduced to $23.40 from $26.65.

Target price is $23.40 Current Price is $16.80 Difference: $6.6
If JHX meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).

Current consensus price target is $21.37, suggesting upside of 27.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.9

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

Macquarie rates KLA as Outperform (1) -

Macquarie is increasingly confident in the production from the Fosterville mine as well as the potential reserve growth. The company is considered a top pick for its high-quality mines and organic growth. Fosterville is in southern Victoria.

The broker continues to believe improvements in grade, driven by the bonanza Swan lode, will lead to increased low-cost production of more than 40,000ozpa in 2020.

Macquarie maintains an Outperform rating with a $37 target.

Target price is $37.00 Current Price is $27.00 Difference: $10
If KLA meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Citi rates LLC as Downgrade to Neutral from Buy (3) -

Lend Lease has announced a $350m after-tax provision for engineering projects. Citi lowers forecasts for FY19 earnings per share by -40% to reflect the downgrade. FY20 estimates are lowered by -14%.

The broker is not sure the worst is behind the company, noting the engineering track record of Lend Lease is abysmal, with a loss of -$500m over the past five years.

The broker reiterates a view that engineering should be spun off and any path to a recovery in the share price is now dependent on the company divesting the division in one form or another.

Rating is downgraded to Neutral from Buy. Target is reduced to $15.06 from $22.36.

Target price is $15.06 Current Price is $13.37 Difference: $1.69
If LLC meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $17.74, suggesting upside of 32.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Macquarie rates LLC as Downgrade to Neutral from Outperform (3) -

The company has announced a $350m post-tax provision relating to engineering projects. Macquarie is disappointed with the outcome, which proves Lend Lease has not resolved the issues at NorthConnex.

Given the uncertainty in engineering and despite the good medium-term prospects in global urban regeneration Macquarie downgrades to Neutral from Outperform. This is the third provision that has been taken for NorthConnex, the broker suspects.

The total impairment predominantly relates to projects that were previously identified, nevertheless, with major tunnelling projects still to be completed, the market will now assign a higher risk premium to these earnings, Macquarie points out. Target is reduced to $15.08 from $21.81.

Target price is $15.08 Current Price is $13.37 Difference: $1.71
If LLC meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $17.74, suggesting upside of 32.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Morgan Stanley rates LLC as Overweight (1) -

Lend Lease has identified further underperformance in its engineering business, resulting in an additional $350m in provisions in the first half result.

Morgan Stanley is particularly concerned about the the quantum of the provision, as it is more than double the engineering and services business loss in FY18.

Overweight. Target is $23.05. Industry view is Cautious.

Target price is $23.05 Current Price is $13.37 Difference: $9.68
If LLC meets the Morgan Stanley target it will return approximately 72% (excluding dividends, fees and charges).

Current consensus price target is $17.74, suggesting upside of 32.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Ord Minnett rates LLC as Hold (3) -

Lend Lease will take a $350m impairment charge in its first half accounts for the engineering & services division from a small number of projects that have been previously identified.

In Ord Minnett's view, the implications extend beyond the impairment, given a potential sale of the engineering & services business and the dilution to dividends associated with an exit. There is also upward pressure on gearing.

The broker believes the business has limited capacity to absorb another major impairment without affecting the available capital for development. Ord Minnett calculates the cost of capital to hold the stock is high, given the risks.

Hold rating maintained. Target is reduced to $16.00 from $18.50.

Target price is $16.00 Current Price is $13.37 Difference: $2.63
If LLC meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $17.74, suggesting upside of 32.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.2

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

Macquarie rates PNL as Outperform (1) -

Macquarie observes the development of the Poplar Grove coal project is on track as the company has reiterated its target for first coal in December.

Additional offtake agreements have enabled Paringa Resources to pre-sell all of 2019 production and a majority of 2020 production.

Macquarie maintains an Outperform rating and $0.30 target.

Target price is $0.30 Current Price is $0.21 Difference: $0.09
If PNL meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 1.0

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

Citi rates PRY as Downgrade to Neutral from Buy (3) -

Citi suspects FY19 net profit will be down on the prior year. At a macro level, the broker notes Medicare statistics for the September quarter were soft and the company has also found an issue in October with its payroll system which resulted in medical centre staff being underpaid for the last seven years with a -$18m underpayment likely to be paid out in cash.

The Dorevitch Fair Work Commission determination has also indicated a post-tax impact on underlying net profit guidance of -$4.5m. The company hopes to offset this through cost reductions.

Guidance is expected to be updated at the AGM on November 22. Citi downgrades to Neutral from Buy and reduces the target to $2.90 from $3.20.

Target price is $2.90 Current Price is $2.65 Difference: $0.25
If PRY meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.99, suggesting upside of 13.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.3

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

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

The company has reported a -5.5% fall in funds under management for October. Negative market movements drove the decline despite a modest outperformance in the international fund and Asia fund.

Inflows were slightly positive and largely from the retail channel. Factoring in the weaker market movements Credit Suisse downgrades earnings by -6% for FY19 and -8% for FY20-21.

Rating is downgraded to Underperform from Neutral as the weak fund performance is likely to hamper flows. Target is reduced to $5.00 from $5.25.

Target price is $5.00 Current Price is $5.07 Difference: minus $0.07 (current price is over target).
If PTM meets the Credit Suisse target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.22, suggesting upside of 2.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.5

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

Macquarie rates QBE as Outperform (1) -

Macquarie assesses offshore results and the company's US crop performance. The broker concludes that re-pricing is slightly more positive than expected and US crop performance is somewhat better than long-term averages.

While a number of mid-size catastrophe losses have occurred, the reinsurance cover is expected to be sufficient. Outperform rating maintained. Target is raised to $12.50 from $11.90.

Target price is $12.50 Current Price is $11.52 Difference: $0.98
If QBE meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $12.18, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

UBS rates QBE as Buy (1) -

The broker has reviewed Sep Q earnings results of QBE's US peers and found nothing untoward. Pricing momentum has slowed but is still running at a similar level to the first half and cost ratios have improved.

Buy and $12.20 target retained.

Target price is $12.20 Current Price is $11.52 Difference: $0.68
If QBE meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $12.18, suggesting upside of 5.8% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

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

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

Morgan Stanley incorporates the Capio acquisition into forecasts and believes the transaction will be accretive to earnings per share earlier than the company has guided. However the Australian private health contracting environment and regulatory risks dampen the broker's conviction.

The broker considers Capio strategically sound, and there are synergies, but the major debate exists in Australia where low single-digit growth in hospital volumes continues. The valuation is not considered compelling and the broker retains an Equal-weight rating. Target is raised to $59 from $56. Industry view is In-Line.

Target price is $59.00 Current Price is $56.98 Difference: $2.02
If RHC meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $58.87, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

UBS rates RHC as Neutral (3) -

Ramsay's NHS volumes in the UK fell -2% year on year in September, netting to 1.4% rolling 12-month growth. NHS referrals represent some 80% of Ramsay's UK admissions, the broker notes. The numbers suggest Ramsay is outperforming peers, but overall growth is challenging.

The broker makes no changes ahead of the company's AGM next week. Neutral and $54 target retained.

Target price is $54.00 Current Price is $56.98 Difference: minus $2.98 (current price is over target).
If RHC 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 $58.87, suggesting upside of 3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.3

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

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

The Australian Securities and Investments Commission has submitted a recommendation to the Hayne Royal Commission recommending the removal of commissions for all insurance products.

Ord Minnett calculates, if this recommendation ultimately worked its way into legislation, it would have an adverse effect on Steadfast. The submission intends to fix problems related to products that provide little or no value to consumers such as add-on insurance products and it is still too early to know if the recommendations will be accepted or become policy.

Ord Minnett does not change earnings forecasts for Steadfast but increases its discount rate on valuation. The broker downgrades to Hold from Accumulate and reduces the target to $2.88 from $3.35.

Target price is $2.88 Current Price is $2.90 Difference: minus $0.02 (current price is over target).
If SDF meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.31, suggesting upside of 14.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.7

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

Ord Minnett rates TCL as Buy (1) -

Lend Lease ((LLC)), in flagging a $350m charge against its engineering & services division, has identified, among other problematic projects, NorthConnex, in which Transurban has a 50% interest. Lend Lease has simply indicated lower productivity in the post-tunnelling phases at NorthConnex.

The fact Transurban has not updated on this project suggests to Ord Minnett that any cost over-runs must be within contingencies. The broker would be surprised if the share price is materially affected by the development although, if it were, recommends investors take advantage of the opportunity.

Ord Minnett maintains a Buy rating and $13.25 target.

Target price is $13.25 Current Price is $11.57 Difference: $1.68
If TCL meets the Ord Minnett target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $12.29, suggesting upside of 6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.5

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

Citi rates WOW as Buy (1) -

The petrol business has been divested for $1.73bn to EG Group. Citi believes the transaction will pave the way for a possible $1.5-2bn capital return, potentially as early as August 2019.

The broker expects around -6% dilution to FY20 earnings per share from the sale. Buy rating and $33 target maintained.

Target price is $33.00 Current Price is $29.85 Difference: $3.15
If WOW meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $29.04, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Deutsche Bank rates WOW as Hold (3) -

Deutsche Bank suggests the sale of the petrol business is a good outcome, given the tough conditions. The price achieved is only slightly below the original deal struck with BP.

There are other benefits for Woolworths because the fuel discount offer and rewards will continue and Woolworths will benefit from wholesale supply.

Deutsche Bank expects an opportunity will be forthcoming to distribute capital and release some of the franking credit balance. Buy rating and $31 target maintained.

Target price is $31.00 Current Price is $29.85 Difference: $1.15
If WOW meets the Deutsche Bank target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $29.04, suggesting downside of -2.7% (ex-dividends)

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgan Stanley rates WOW as Underweight (5) -

Woolworths will sell its petrol business to EG Group for $1.73bn. With stranded overhead costs of $10m and annual costs of funding the future 4c per litre discount of $35m, Morgan Stanley believes Woolworths stands to lose $170m in operating earnings after the sale.

The broker calculates the sale to be -3.5% dilutive to FY19 earnings per share. Still, Morgan Stanley believes there is a high probability of capital management, particular given the franking credit balance.

Target is $23. Underweight rating. Industry view: Cautious.

Target price is $23.00 Current Price is $29.85 Difference: minus $6.85 (current price is over target).
If WOW meets the Morgan Stanley target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.04, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Morgans rates WOW as Hold (3) -

Woolworths will sell its petrol business to EG Group for $1.73bn. Morgans makes no changes to forecasts, given the transaction is still subject to FIRB approval. No competition issues are expected, given EG Group does not currently operate in Australia.

The broker considers the deal positive for Woolworths and the price fair. There is now significant flexibility on the balance sheet with the prospect of further capital management.

Morgans maintains a Hold rating and raises the target to $29.06 from $27.64.

Target price is $29.06 Current Price is $29.85 Difference: minus $0.79 (current price is over target).
If WOW meets the Morgans target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $29.04, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

Ord Minnett rates WOW as Hold (3) -

Woolworths will sell its petrol business to EG Group for $1.73bn. Given the difference in the trading multiple for Woolworths versus the transaction multiple, Ord Minnett suggests dilution to earnings per share is not surprising.

There is a prospect, nonetheless, of a multiple re-rating from a change in business mix and, to some extent, capital management. The broker considers the latter factored into the share price and retains a Hold rating and $30 target.

Target price is $30.00 Current Price is $29.85 Difference: $0.15
If WOW meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $29.04, suggesting downside of -2.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: -0.1

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

UBS rates XRO as Neutral (3) -

Xero's first half revenue result was in line with the broker, after lower subscriptions were offset by higher average revenue per unit. FY revenue guidance was reaffirmed but the broker thinks this looks light based on intended price increases.

The broker expects improved subscriber growth in the second half and has lifted its revenue forecast to above the guidance range. The company is on track for cash flow break even in the half. Target rises to $47.00 from $45.50, Neutral retained.

Target price is $47.00 Current Price is $40.60 Difference: $6.4
If XRO meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $44.30, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY19:

Forecast for FY20:

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

Market Sentiment: 0.1

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