Australian Broker Call

Macquarie rates AFG as Neutral (3) -

Macquarie raises its target for Australian Finance Group to $1.54 from $1.46 to reflect positive earnings changes after 2Q results, and a small increase in multiple to incorporate an increase in AFG Home Loan share.

By comparison to the previous corresponding period, total lodgement activity was up 5.3%, including a 32.3% rise in AFG Home Loan
activity. Product share for the latter increased to 7.3% of all flow in the 2Q versus 5.8% and 5% for 2Q23 and 1Q24, respectively.

The Neutral rating is maintained and the target rises to $1.54 from $1.46.

Target price is $1.54 Current Price is $1.64 Difference: minus $0.1 (current price is over target).
If AFG meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates ALD as Outperform (1) -

Following Ampol's 4Q results, Macquarie assesses Convenience Retail, Fuels & Infrastructure and Z Energy all appear to be performing strongly. A minor Lytton refinery outage resulted in 4Q results missing the analyst's forecast.

Management guided to a full year replacement cost operating profit (RCOP) EBIT "slightly ahead" of 2022's $1,269m. 

Despite a share price rally in the 4Q last year, Macquarie retains its Outperform rating, supported by a sustainably attractive dividend yield including repeatable special dividends annually. The target lifts by 0.3% to $38.15 on minor earnings upgrades in 2024-25.

Target price is $38.15 Current Price is $35.07 Difference: $3.08
If ALD meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $35.76, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

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

Morgan Stanley anticipates a muted market reaction to Ampol's 4Q update, which revealed a Lytton Refiner Margin (LRM) of US$10.52/bbl, down -11% on the previous corresponding period. This outcome was a -34% miss versus the consensus forecast.

Refinery production also missed consensus by -9% due to an unplanned outage at year's end, explains the broker.

Based on management's FY23 replacement cost operating profit (RCOP) group earnings (EBIT) guidance of $1,270 (consensus $1,307), the analysts believe Q4 accounted for at least $257m of the total.

Target $35.48. Equal-weight rating. Industry view is Attractive.

FY23 results are due on February 19.

Target price is $35.48 Current Price is $35.07 Difference: $0.41
If ALD meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $35.76, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

UBS rates ALD as Neutral (3) -

While the 2Q Lytton Refiner Margin (LRM) of US$10.52/bbl was a -15% miss compared to the forecast by UBS, due to an unplanned outage at the refinery, Convenience Retail beat expectations.

The broker explains resilient fuel margins and higher retail fuel volumes for Convenience Retail helped offset ongoing headwinds for tobacco sales.

The analysts see great prospects for a special dividend announcement (forecast 50cps) at February's full year results, as well as a 70% payout of ordinary dividends from NPAT.

The target rises to $34.40 from $33.90. Neutral.

Target price is $34.40 Current Price is $35.07 Difference: minus $0.67 (current price is over target).
If ALD meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $35.76, suggesting upside of 3.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 0.3

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

Bell Potter rates APM as Hold (3) -

Following APM Human Services International's trading update, Bell Potter lowers its FY24-26 EPS forecasts by -32%, -29% and -11%, respectively, and the target falls to $1.50 from $1.90. 

Following the AGM profit warning on November 10, management has provided more detailed expectations for 1H results. Unfortunately, the expectation for underlying earnings (EBITDA) was a -19% miss against the broker's estimate.

The company anticipates a 1H group earnings margin of 13%, which Bell Potter compares to the 23% achieved post IPO/FY22.

While there was around 20% share price upside to this target (at the time of the analyst's research) the Hold rating is kept due to uncertainty around current trading and debt levels, along with the level of dividends.

Target price is $1.50 Current Price is $0.79 Difference: $0.715
If APM meets the Bell Potter target it will return approximately 91% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 155.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Ord Minnett rates APM as Buy (1) -

Ord Minnett has cut its near-term earnings expectations for APM Human Services International by -29% over the next two years, in response to current headwinds.

The broker expects abnormally low unemployment levels will likely drive depressed client flows and placement fees near-term, and expects recent North American contract wins and acquisitions will not prove as profitable as previously expected.

Despite this, longer-term estimates are unchanged. Buy. Target price decreases to $2.40 from $2.70.

Target price is $2.40 Current Price is $0.79 Difference: $1.615
If APM meets the Ord Minnett target it will return approximately 206% (excluding dividends, fees and charges).

Current consensus price target is $1.94, suggesting upside of 155.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates ASX as Neutral (3) -

While there are currently several reasons to buy shares in ASX, Citi remains Hold-rated due to uncertainty over the cost outlook, while any improvement in interest rate leverage still seems to be some time away.

On top of these negatives, there is the ongoing ASIC investigation, notes the broker. EPS forecasts across FY24-26 are lowered by -1%, yet the $64 target is retained. Hold.

Current positives include the potential peak for interest rates and prospects for a recovery in the listing market, explains the analyst.

Target price is $64.00 Current Price is $64.23 Difference: minus $0.23 (current price is over target).
If ASX meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $61.03, suggesting downside of -6.0% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Macquarie rates AWC as Neutral (3) -

In a positive for Alumina Ltd, Alcoa World Alumina and Chemicals' (AWAC) 4Q production was an 8% beat against Macquarie's forecast, while the average alumina price for third-party sales was 7% higher than the broker's estimate.

The curtailment of Kwinana in 2024 should aide in reducing cash costs and improve margins, suggests Macquarie. No dividends are expected for the 2H of 2023.

The analyst expects management's 2024 guidance will  be provided with the 2023 financial results on February 27.

The Neutral rating and $1.10 target price are unchanged.

Target price is $1.10 Current Price is $0.98 Difference: $0.125
If AWC meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.13, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Morgan Stanley rates AWC as Overweight (1) -

Following an update by Alcoa in the US, Morgan Stanley notes 2023 production for the AWAC JV was in line with the broker's forecast but a slight miss against management's guidance.

Realised prices for the 2H beat forecasts by the analyst and consensus by 2%, likely due to timing, while Q4 costs were - 4% lower compared to the 3Q (as expected).

Morgan Stanley forecasts no dividend for the 2H of 2023.

The Overweight rating for Alumina Ltd is maintained and the target rises to $1.10 from 90c. Industry View: Attractive.

While near-term volume growth is negative, a return to profitability and removal of unprofitable tonnes from the market (Kwinana curtailment) are positive medium-term drivers, suggests the broker.

Target price is $1.10 Current Price is $0.98 Difference: $0.125
If AWC meets the Morgan Stanley target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.13, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Macquarie rates BHP as Outperform (1) -

BHP Group's 2Q operational result revealed production for iron ore and copper in line with Macquarie 's forecasts, while weak met coal production was offset by a beat for Energy coal.

A strong performance at NSW Energy coal (NSWEC) was offset by weakness at the BHP Mitsubishi Alliance (BMA),  where guidance has now been downgraded, notes the broker.

In a key highlight, according to the analyst, the Oz Mineral assets have been integrated six months ahead of schedule. Less positively, an impairment announcement is expected for the Nickel West operations due to weak prices and an oversupplied nickel market.

Near-term strong iron ore prices present upside risk to Macquarie's forecasts for the dividend payout ratio. A 55% payout is assumed for the upcoming interim dividend.

The target falls to $49 from $50 and the Outperform rating is unchanged.

Target price is $49.00 Current Price is $45.73 Difference: $3.27
If BHP meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $46.75, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

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

BHP Group's 2Q production was in line with Morgan Stanley's expectations but both net debt and spending on the Samarco joint venture in Brazil were higher than consensus forecasts.

WA iron ore production beat forecasts by the broker and consensus by 1%, while total copper production were misses of -3% and -2%, respectively, driven largely by Escondida and partially offset by a good performance at Spence.

FY24 production guidance was unchanged apart from a downgrade at BMA which now excludes Blackwater and Daunia due to the recent sale.

Target $44.50. Equal-weight. Industry view: Attractive.

Target price is $44.50 Current Price is $45.73 Difference: minus $1.23 (current price is over target).
If BHP 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 $46.75, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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) -

Second quarter sales from BHP Group were in line with Ord Minnett's expectations, and the company largely reiterated full year guidance aside from reducing met coal production and increasing met coal costs.

The company's West Australian iron ore operations remain the primary earnings driver, and with first half sales reaching roughly 127m metric tonnes the operations remain on track to meet Ord Minnett's expected 255m metric tonnes for the full year.

BHP Group's copper division also reported a strong quarter, with sales 9% higher than the broker had expected. The Hold rating and target price of $43.00 are retained.

Target price is $43.00 Current Price is $45.73 Difference: minus $2.73 (current price is over target).
If BHP meets the Ord Minnett target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $46.75, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

UBS rates BHP as Neutral (3) -

UBS identifies only small negatives within BHP Group's 2Q production report and lowers its target to $46 from $48 after reducing FY24-26 EPS forecasts by -1%, -5% and -5%, respectively. Rio Tinto ((RIO)) is preferred over BHP.

Management cut metallurgical coal (BMA) production guidance aggressively, highlights the broker, due to ongoing issues, and lifted unit costs. Guidances for all other divisions were left unchanged.

The Neutral rating is unchanged.

Target price is $46.00 Current Price is $45.73 Difference: $0.27
If BHP meets the UBS target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $46.75, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Macquarie rates DRR as Neutral (3) -

Deterra Royalties' 2Q production from Mining Area C beat Macquarie's forecast by 5%. Volume is expected to increase as South Flank ramps up to 80mtpa by the end of FY24.

A key near-term catalyst, according to the analyst, is the 2Q FY24 royalty payment of $66.3m (the broker's estimate).

Macquarie's forecasts are little changed and the Neutral rating and $4.80 target price retained.

Target price is $4.80 Current Price is $5.08 Difference: minus $0.28 (current price is over target).
If DRR meets the Macquarie target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.91, suggesting downside of -5.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.2

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

Ord Minnett rates EML as Hold (3) -

Given EML Payments' decision to immediately liquidate its Irish credit card distributor subsidiary PFS Card Services Ireland (PCSIL), Ord Minnett has lifted its target price on the stock.

According to the broker, not only would retaining PCSIL have proven more value-destructive, but the closure of the business will also significantly reduce overheads and losses, mitigate risk of client losses in other products, and free up management.

Cash costs related to the wind down are expected to total around -$20m. The Hold rating is retained and the target price increases to $1.00 from 80 cents.

Target price is $1.00 Current Price is $0.91 Difference: $0.09
If EML meets the Ord Minnett target it will return approximately 10% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Citi rates IAG as Buy (1) -

Back on January 4, Insurance Australia Group confirmed its January 1 renewal for reinsurance protection.

Citi observes the CAT reinsurance renewal was broadly consistent with industry expectations for pricing. It's felt the group is much better positioned than a year ago with the FY24 CAT allowance now looking more reasonable.

The Buy rating is maintained and the target is increased to $6.60 from $6.50 after allowing for the reinsurance update and after making mark-to-market adjustments. 

Target price is $6.60 Current Price is $5.75 Difference: $0.85
If IAG meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $5.98, suggesting upside of 3.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates IFL as Neutral (3) -

Citi expects a "reasonably positive" 1H result for Insignia Financial as market strength in the 2Q helps lift funds under management and administration (FUMA). It's also thought progress is being made on cost-out, along with upside from recent divestments.

However, as is often the case with a departing CEO, the broker sees significant risk that expectations will be re-based. It's also thought integration challenges remain.

The target rises to $2.15 from $2.10, while the Neutral rating is maintained.

Target price is $2.15 Current Price is $2.17 Difference: minus $0.02 (current price is over target).
If IFL meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.44, suggesting upside of 12.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Citi rates JHX as Buy (1) -

With starts from James Hardie Industries in the December quarter up 23% year-on-year, Citi sees limited risk of the company not meeting market expectations of 6% volume growth over the first half. 

The broker also points out the stock has already re-rated to partly price this in, but still finds reasonable value at the current price, particularly if an upgrade cycle for the repair and remodel segment emerges.

The Buy rating and target price of $55.30 are retained.

Target price is $55.30 Current Price is $55.39 Difference: minus $0.09 (current price is over target).
If JHX meets the Citi target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $54.54, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

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

Citi rates LNK as Neutral (3) -

In a somewhat delayed reaction, Citi raises its target for Link Administration to $2.20 from $1.40 to broadly align with the scheme implementation deed with Mitsubishi UFJ whereby Mitsubishi will acquire 100% of Link shares.

The Link board has unanimously recommended shareholders vote in favour.

Also, in the interim since the broker's last research update, the company has signed a memorandum of understanding (MoU) with AusSuper to extend its contract to 2028.

The Neutral rating is unchanged. Link is scheduled to release its 1H FY24 result on February 20.

Target price is $2.20 Current Price is $2.20 Difference: $0
If LNK meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $1.85, suggesting downside of -16.3% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates MGX as Outperform (1) -

Macquarie believes Mount Gibson Iron is set to achieve FY24 guidance following the release of 2Q operational results. Shipments beat the broker's forecast by 22% and realised prices of $128/t were in line.

As expected by the analyst, cash and investments increased by 39% quarter-on-quarter. More negatively, costs of $62/t were -22% worse-than-forecast, and are expected to rise modestly over FY24, driven by a higher strip ratio.

The Outperform rating and 55c target are maintained.

Target price is $0.55 Current Price is $0.54 Difference: $0.015
If MGX meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates NHF as Buy (1) -

With the latest NDIS Review Report calling for the introduction of "navigators", scepticism around nib Holdings' NDIS strategy has increased amid claims navigators will impact on the current responsibilities of Plan Managers, and potentially on the level of demand for plan managers and the price charged per patient.

While nib Holdings doubts the recommendation will eventuate, as Citi points out should the change be enacted it would take some time to play through. nib Holdings remains confident that plan management is an appropriate entry point into support coordination.

The Buy rating and target price of $8.35 are retained.

Target price is $8.35 Current Price is $7.67 Difference: $0.68
If NHF meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $8.28, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates NWH as Buy (1) -

NRW Holdings has today announced it has been named Preferred Proponent for the $225m Reid Highway Interchange project in Perth, which suggests to Citi only a limited risk the company will not gain the contract.

In initial thoughts, the broker suggests this outcome provides evidence of a progressive recovery in Civil revenue for NRW, with a potential annual contribution of $112.5m. This represents around 18% of the analyst's FY25 Civil revenue forecast.

Buy. Target $3.15.

Target price is $3.15 Current Price is $2.68 Difference: $0.47
If NWH meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $3.00, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates QBE as Buy (1) -

While crop yields have fared better than QBE Insurance's third quarter update had suggested, and may drive the insurer's crop combined operating ratio towards the lower end of its 93-97% range, Citi warns lower commodity pricing may mute gross written premium growth.

According to the broker, given its number two market position QBE Insurance should be outperforming the market, but it remains to be seen whether this will emerge.

The Buy rating and target price of $18.00 are retained.

Target price is $18.00 Current Price is $15.23 Difference: $2.77
If QBE meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $17.31, suggesting upside of 13.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

UBS rates RHC as Initiation of coverage with Neutral (3) -

UBS initiates coverage of Ramsay Health Care with a Neutral rating and $55 target price. It's felt key near-term downside risks are the outcomes of any (re)negotiations with health funds.

The analysts explain, the company is seeking to tweak its business mix to offset ongoing inflationary pressures in both Australia and the UK, as well as other cost saving initiatives.

Previously debt has been a concern among investors, but the recent sale of the company's Asian business for around $630m should provide some reassurance, in the broker opinion.

However, UBS believes consensus has introduced risk by building into the current share price management's guidance for a 2H EPS skew. It's recommended investors adopt a "wait and see" approach.

Target price is $55.00 Current Price is $49.39 Difference: $5.61
If RHC meets the UBS target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $56.31, suggesting upside of 13.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

UBS rates SSR as Buy (1) -

SSR Mining's gold equivalent production of 707koz beat the expectations of UBS and consensus for 680koz and 690koz, respectively,  

FY23 financial results are due on February 21, preceded by important (according to UBS) long-term production guidance on February 13. The latter will include key technical reports for Copler and Marigold, updated reserves and resources, and a five-year guidance outlook.

UBS forecasts three-year gold production of around 230kozpa from Copler and circa 200kozpa at Marigold.

The Buy rating is retained and the target price increases to $20.20 from $20.00.

Target price is $20.20 Current Price is $15.18 Difference: $5.02
If SSR meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates SUN as Buy (1) -

Citi believes Suncorp Group's top line remains promising for the first half, expecting strong rate rises over the last six months to bolster growth for each of the insurer's newly recut divisions.

The broker also anticipated a small favourable variance to Suncorp Group's catastrophe allowance for the half, which will likely be carried through to the second half.

According to the broker, Suncorp Group has taken the "purest view" to adoption of new AASB17 insurance standards of the listed domestic general insurers, resulting in some hard to forecast line items, and warns this could cause some difficulty in interpreting the first half result.

The Buy rating is retained and the target price increases to $15.55 from $15.40.

Target price is $15.55 Current Price is $13.98 Difference: $1.57
If SUN meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $15.42, suggesting upside of 9.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.8

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

Morgans rates TCL as Hold (3) -

Ahead of first half results due on February 8, Morgans alters its financial model for updated macro assumptions and makes adjustments for events during the 1H of FY24. The latter include debt raisings, capital releases and the distribution reinvestment plan.

In five year's time Morgans values the group at around $13.72/share. A cash yield of 4.9% over the next year is expected to grow at a 5% per annum compound annual growth rate (CAGR) across the subsequent four years.

The broker's target rises to $12.66 from $12.38 and the Hold rating is maintained.

Target price is $12.66 Current Price is $13.06 Difference: minus $0.4 (current price is over target).
If TCL 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 $14.06, suggesting upside of 7.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Morgan Stanley rates TWE as Overweight (1) -

Morgan Stanley increases its earnings forecasts for Treasury Wine Estates by 9% across FY25-26 to reflect the DAOU luxury wine brand acquisition (completed in December) and revised Penfolds assumptions.

While execution risk has increased (allowed for by a reduction in target to $13.75 from $14.35), the broker believes the valuation is approaching trough multiples, and an Overweight rating is maintained. Sector view is In-Line.

Target price is $13.75 Current Price is $10.27 Difference: $3.48
If TWE meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $13.03, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

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

Citi rates WHC as Buy (1) -

Second quarter run-of-mine coal production for Whitehaven Coal fell by -6% quarter-on-quarter (due to lower production at the Narrabri operations), though still exceeded Citi's forecast by 10%. 

After an initial glance at today's announcement, the broker highlights Narrabri experienced both geological complications and equipment issues.

Management's FY24 ROM and sales guidance are unchanged, but the production mix is anticipated to lean towards open-cut operations, explains Citi. Narrabri’s FY24 ROM production guidance was revised down to 5.1-5.7mt from 6.0-6.7mt.

The higher expected contribution from open-cut operations, means FY24 costs are headed towards the top end of the guidance range of US$103-113/t, explains the broker.

Target $9.40. Buy.

Target price is $9.40 Current Price is $7.81 Difference: $1.59
If WHC meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $7.81, suggesting downside of -3.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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