Australian Broker Call

Credit Suisse rates A2M as Upgrade to Outperform from Neutral (1) -

The company has indicated a solid start to the year, with revenue for the four months to October up 40.5%. Credit Suisse observes this is been driven by steady Australasian market share and progress on the Chinese infant formula business.

The company has also reaffirmed FY19 expectations. While the company's execution impresses the broker, risks remain with Chinese regulation. However, with the stock having sold off -20% from late August, Credit Suisse believes investors are being more than appropriately compensated.

Rating is upgraded to Outperform from Neutral. Target is raised to NZ$12.25 from NZ$12.20.

Current Price is $9.88. Target price not assessed.

Current consensus price target is $11.92, suggesting upside of 20.6% (ex-dividends)

The company's fiscal year ends in June.

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: 0.7

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

Citi rates BHP as Buy (1) -

BHP has emphasised more rigour in its capital allocation framework, a component of which, Citi points out, is moving the focus away from the typical mining strategy of following momentum and investing at the top of the cycle and, ultimately, destroying value.

The broker suggests, however, any investment decision still needs to be weighed against the return from further buybacks and the risk-weighted cost of capital.

Although there are a number of options in the portfolio, Citi suspects BHP would like more oil and copper, in particular. Citi maintains a Buy rating and $37.50 target.

Target price is $37.50 Current Price is $31.78 Difference: $5.72
If BHP meets the Citi target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $37.52, suggesting upside of 18.1% (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: 0.7

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

Credit Suisse rates BHP as Neutral (3) -

The company has outlined its new approach to capital allocation and how opportunities are assessed and Credit Suisse believes the outcome underscores the attractive organic options within the portfolio.

The broker suspects the market can have greater confidence in these options and that the process to realise value is now more methodical.

Credit Suisse maintains a Neutral rating and $35 target.

Target price is $35.00 Current Price is $31.78 Difference: $3.22
If BHP meets the Credit Suisse target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $37.52, suggesting upside of 18.1% (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: 0.7

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

Macquarie rates BHP as Outperform (1) -

The briefing on capital allocation highlighted a focus on stress testing downside cases to limit the potential for losses from capital investment. Macquarie is encouraged by the rigour while organic growth options present upside to its base case.

The broker suspects lessons have been learnt from the US shale investment and large-scale acquisitions such as shale are now considered unlikely. The most significant growth projects are the staged development of Jansen and the Olympic Dam BFX.

Macquarie is yet to be convinced on the economics of Jansen but already incorporates the BFX into forecasts. Outperform maintained. Target is steady at $40.

Target price is $40.00 Current Price is $31.78 Difference: $8.22
If BHP meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $37.52, suggesting upside of 18.1% (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: 0.7

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

Macquarie rates BKL as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage with an Outperform rating and $150 target. While the first quarter results underwhelmed the broker, the investment in growth should give momentum a boost.

The company has been successful in leveraging a strong domestic market to position itself in China for higher quality health food products. Macquarie's positive investment stance is underpinned by both company specific and structural factors.

While regulation-led sales dislocation is a risk for the near term, recent feedback suggests the daigou demand is resilient.

Target price is $150.00 Current Price is $133.49 Difference: $16.51
If BKL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $120.40, suggesting downside of -9.8% (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 BKL as Hold (3) -

China has announced that the period of grace associated with the list of certain foreign consumer products sold through cross-border e-commerce will be replaced with new regulations, effective in January.

The new rules allow Blackmores to continue to trade through these channels and resolve the significant uncertainty that faced the company during the period of grace.

The new rules also allow for an increase in the quantum of individual purchases made through the channel that attract a lower tax rate for Chinese consumers. Hold rating and $130 target maintained.

Target price is $130.00 Current Price is $133.49 Difference: minus $3.49 (current price is over target).
If BKL meets the Ord Minnett target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $120.40, suggesting downside of -9.8% (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 COH as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley estimates the current developed market penetration for Cochlear is around 5% and the capture of the annual incidence of severe hearing impairment is only 7%. The low penetration is explained by the weak relationship between hearing aid and cochlear implant audiology channels.

The broker believes Sycle will bridge this channel and sustain long-term market growth. Sycle is audiology practice management software used by around 7000 hearing aid clinics across the US, UK and Canada. This should increase the awareness of cochlear implants in retail channels by facilitating diagnosis of candidates.

Morgan Stanley suggests the valuation of this market-leading stock with life changing technologies has become more attractive. Rating is upgraded to Overweight from Equal-weight. In-Line industry view. Target is $175.

Target price is $175.00 Current Price is $167.45 Difference: $7.55
If COH meets the Morgan Stanley target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $178.86, suggesting upside of 6.8% (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 COH as Sell (5) -

Having toted up Sep Q earnings reports from global competitors, the broker estimates Cochlear's market share rose to 55.9% in the quarter from 54.1% a year ago. That said, the broker has trimmed its expectations for longer term unit sales growth.

This leads to a target cut to $160 from $175. Despite the recent sell-off, Cochlear remains expensive on a PE basis relative to the broader market, the broker believes. Sell retained.

Target price is $160.00 Current Price is $167.45 Difference: minus $7.45 (current price is over target).
If COH meets the UBS target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $178.86, suggesting upside of 6.8% (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 COL as Initiation of coverage with Hold (3) -

Deutsche Bank believes Coles is likely to experience some challenges as a standalone entity, as convenience earnings are likely to fall sharply and this will be compounded by a need to invest in fuel prices, as the business has over-earned historically.

Moreover, supermarket sales momentum has slowed and both operating and capital expenditure needs are increasing.

However, the long-term prospects are reasonable and Deutsche Bank initiates coverage with a Hold rating and $13.00 target.

Target price is $13.00

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates COL as Initiation of coverage with Neutral (3) -

Macquarie believes, with an enviable market position, Coles will appeal to defensive investors. However, the broker suspects returns on the two new distribution centres will drag on the balance sheet over the next five years, although in the longer term this is a good use of capital.

Higher margin private-label sales currently comprise 29% of total sales for Coles and in the fresh category private label is 50% because of direct grower relationships. The company has a target to lift private label to 40% of total sales over time.

The broker initiates coverage with a Neutral rating and $13.48 target.

Target price is $13.48

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates CYB as Outperform (1) -

Macquarie was disappointed with the FY18 result, as it was overshadowed by near-term margin pressures from the Virgin Money acquisition.

The broker expects the funding mix will improve over the medium term and a sustainable return on tangible equity of around 12% will be achieved.

Still the absence of targets is likely to result in uncertainty and an information vacuum, and this is not conducive to a re-rating in the broker's view.

Outperform maintained as there is still material upside. Target is reduced to $5.50 from $6.30.

Target price is $5.50 Current Price is $3.60 Difference: $1.9
If CYB meets the Macquarie target it will return approximately 53% (excluding dividends, fees and charges).

Current consensus price target is $5.60, suggesting upside of 55.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

This company reports in GBP. 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

Morgans rates CYB as Add (1) -

FY18 results were better than Morgans expected, although results were assisted by a low effective tax rate in the second half. The net interest margin guidance for FY19 is significantly lower than the broker estimated. The softness is driven by the Virgin Money business.

With negative momentum in the margin, uncertainty about the extent of excess CET1 capital, more Brexit uncertainty and potential for legal action, Morgans reduces the target to $4.39 from $6.25. Add maintained.

Target price is $4.39 Current Price is $3.60 Difference: $0.79
If CYB meets the Morgans target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $5.60, suggesting upside of 55.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY19:

Forecast for FY20:

This company reports in GBP. 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

Macquarie rates EVN as Outperform (1) -

Evolution Mining has approved a plant upgrade at Cowal, 12 months ahead of plan, a positive development in Macquarie's view. The expansion is to 8.7mtpa from 7.5mtpa. Capital expenditure is estimated at $25-30m with $15-20m to be spent in FY19.

Increased milling capacity is expected to result in a steady production increase of 20,000 ozpa from FY22. The contract for the underground exploration drive is scheduled before the end of 2018, with underground drilling to commence in the first half.

Outperform retained. Target is $3.10.

Target price is $3.10 Current Price is $3.18 Difference: minus $0.08 (current price is over target).
If EVN 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 $3.03, suggesting downside of -4.8% (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 HSO as Hold (3) -

Ord Minnett lowers earnings estimates for the hospital division to allow for downward pressure on margin. The broker believes it is too early to judge whether the problems at the newly-opened Northern Beaches Hospital are 'teething problems'.

Nevertheless, with costs likely to be running ahead of expectations and penalties for missed performance targets, the broker believes the hospital is performing well behind plan. Target is raised to $2.30 from $2.10, a -5% discount to the bid price from Brookfield Capital Partners. Hold rating maintained.

Target price is $2.30 Current Price is $2.28 Difference: $0.02
If HSO meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $2.26, suggesting downside of -1.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Macquarie rates MIN as No Rating (-1) -

FY19 operating earnings guidance (EBITDA) of $280-320m has been advised at the AGM, well below Macquarie's forecasts. Mining services guidance is marginally lower, lithium shipments are weaker than expected and iron ore shipments are broadly in line.

Macquarie attributes the miss on forecasts to a number of factors, including wider discounting on iron ore fines, higher operating costs at Mt Marion, lower lithium DSO & spodumene shipments and higher start-up cost at Koolyanobbing.

Macquarie is currently on research restrictions and cannot advise a rating or target.

Current Price is $15.77. Target price not assessed.

Current consensus price target is $18.83, suggesting upside of 19.4% (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

Ord Minnett rates MIN as Accumulate (2) -

The company will create a 50-50 joint venture with US-listed Albemarle to own and operate the Wodgina lithium operation and co-develop integrated lithium hydroxide facilities. Albemarle will pay US$1.15bn for the stake.

Ord Minnett believes the deal is clean and fair and Mineral Resources has galvanised the value of the downstream option, underpinning Wodgina as a tier-1 strategic asset.

The broker maintains an Accumulate rating and raises the target to $21 from $18. The joint venture will look to commence construction on the plant as soon as necessary licenses and approvals are in place.

Target price is $21.00 Current Price is $15.77 Difference: $5.23
If MIN meets the Ord Minnett target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $18.83, suggesting upside of 19.4% (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

Credit Suisse rates NCM as Neutral (3) -

SolGold's updated Alpala resource estimates indicate the high grade core is of similar scale, albeit lower value, to the Golpu mine plan. Credit Suisse suspects the lower Alpala ore value is likely to be offset by the lower Ecuador tax rate versus PNG.

Credit Suisse surmises, if the end point is a joint Newcrest/BHP ((BHP)) acquisition of SolGold, this could mean Newcrest's caving expertise de-risks BHP's caving deficiency. Newcrest could also take the gold production to secure its gold rating as it transitions to copper from gold dominance, in the broker's view.

Credit Suisse maintains a Neutral rating and $20.30 target.

Target price is $20.30 Current Price is $21.08 Difference: minus $0.78 (current price is over target).
If NCM meets the Credit Suisse target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $21.22, suggesting upside of 0.7% (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: 0.2

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

Macquarie rates NSR as Underperform (5) -

Macquarie notes the company is preparing for growth, looking to deploy $100m in capital for acquisitions per annum and with a long-term target of increasing the number of assets towards 300.

Nevertheless, the broker warns new deals could be on lower yields versus historical levels as the most favourable assets have already been acquired. Development will also help lift earnings.

Still, the broker considers the equity expensive and retains concerns that further capital may be required from investors. Underperform maintained. Target is $1.29.

Target price is $1.29 Current Price is $1.72 Difference: minus $0.43 (current price is over target).
If NSR meets the Macquarie target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.66, suggesting downside of -3.5% (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 NSR as Accumulate (2) -

Ord Minnett considers the next 2-3 years promising, providing the housing market downturn is contained. The company has provided a comprehensive update on its internal processes and growth opportunities.

The company intends to expand six existing centres in 2019 at a cost of $30-50m. National Storage will also look to sell 80% of its NZ portfolio, while retaining management.

Ord Minnett maintains an Accumulate rating and $1.95 target.

Target price is $1.95 Current Price is $1.72 Difference: $0.23
If NSR meets the Ord Minnett target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $1.66, suggesting downside of -3.5% (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 NWH as Buy (1) -

NRW Holdings has upgraded earnings guidance by 18%, leading the broker to follow suit. Revenue guidance meets expectation but margins are much higher than thought. Favourable conditions and strong operational productivity across a number of key mining contracts and civil business lead the broker to suggest NRW's stars have aligned.

The next catalyst will be upcoming iron ore contract tenders but the broker also warns labour capacity is getting tight in the space, suggesting a headwind in FY20. Buy retained, target rises to $2.35 from $2.15.

Target price is $2.35 Current Price is $1.99 Difference: $0.36
If NWH meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting upside of 8.0% (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

Morgans rates ORE as Add (1) -

After visiting the company's lithium carbonate project Morgans is more confident in the Salar de Uyuni operation and its ability to expand to 42,500tpa by 2022/23. The broker is impressed with the high-quality and technical management of the operation.

Morgans lowers production estimates for FY19 to 14,190t of lithium carbonate. Add rating maintained. Target is lowered to $5.61 from $5.68.

Target price is $5.61 Current Price is $4.50 Difference: $1.11
If ORE meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $5.40, suggesting upside of 20.0% (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

Morgan Stanley rates PSQ as Overweight (1) -

Pacific Smiles has reaffirmed FY19 guidance for operating earnings growth of 10% and total patient fee growth of 10-15%. Morgan Stanley observes momentum has been strong and the rolling out of centres also appears on track.

The company delivered more than 5.1% comparable sales growth in FY18. Overweight rating, In-Line industry view and target is $1.90.

Target price is $1.90 Current Price is $1.34 Difference: $0.56
If PSQ meets the Morgan Stanley target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

UBS rates SHL as Neutral (3) -

Sonic reiterated FY19 guidance at its AGM, albeit with a slight tick-up on an A$ adjustment, expecting a typical second half earnings skew. Guidance nonetheless depends on no further regulatory changes outside those already known for the US and Germany.

The broker considers geographic diversity a key positive for the stock, but has made slight valuation model adjustments which see its target fall to $23.50 from $23.90. Neutral retained.

Target price is $23.50 Current Price is $22.58 Difference: $0.92
If SHL meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $26.19, suggesting upside of 16.0% (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

Ord Minnett rates SLK as Buy (1) -

Ord Minnett considers Sealink Travel an appropriate stock to own in the current environment, where the market is de-rating high PE stocks, particularly those facing the consumer.

The company's earnings are likely to remain relatively defensive, with around 50% derived from transport as opposed to tourism. Ord Minnett believes the stock represents value at current levels and retains a Buy rating. Target is raised to $5.09 from $4.96.

Target price is $5.09 Current Price is $4.25 Difference: $0.84
If SLK meets the Ord Minnett target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 1.0

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

Citi rates TME as Buy (1) -

The company has received a preliminary offer from Apax Partners to acquire the stock at NZ$6.40 a share. Exclusive due diligence has been granted until December 12.

Citi notes the business is now generating strong cash flow and, while preferring to grow via acquisition, the company's most recent target was blocked by the NZ Commerce Commission.

Buy rating and $5.20 target maintained.

Target price is $5.20 Current Price is $5.62 Difference: minus $0.42 (current price is over target).
If TME meets the Citi target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.20, suggesting downside of -7.5% (ex-dividends)

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: 0.2

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

Macquarie rates TME as Neutral (3) -

The company has received a preliminary non-binding proposal from Apax Partners at NZ$6.40 a share. Macquarie believes this is a credible suitor, noting due diligence has been provided on an exclusive basis until December 12.

Trade Me has enjoyed a strong start to FY19 but guidance signals to the broker that momentum will slow over the remainder of the year.

Macquarie would not rule out other likely bidders for the business. Neutral rating and NZ$4.91 target.

Current Price is $5.62. Target price not assessed.

Current consensus price target is $5.20, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in June.

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: 0.2

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

Morgan Stanley rates TME as Overweight (1) -

Trade Me has received a preliminary proposal from Apax Partners at NZ$6.40 per share. Morgan Stanley retains a positive outlook for the company, given its leading position in the three online classified verticals in New Zealand and the migration of advertising dollars to online.

The broker estimates just 60% of NZ advertising dollars are online in FY19 versus a more mature Australian market at 90%, which underpins the earnings growth trajectory.

Overweight rating. Industry view is Attractive. Price target is NZ$5.40.

Current Price is $5.62. Target price not assessed.

Current consensus price target is $5.20, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in June.

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: 0.2

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

UBS rates TME as Neutral (3) -

Trade Me has received an indicative bid from private equity at NZ$6.40 per share cash which represents a 30% premium to November VWAP, the broker notes. This compares with recent successful takeovers of NZ companies at 44% over VWAP, the broker points out, incorporating a control premium and potential synergies. It is not clear what synergies private equity can garner.

The bid does not preclude Trade Me from considering other offers. The broker retains Neutral and does not include any takeover premium in its unchanged NZ$4.85 target.

Current Price is $5.62. Target price not assessed.

Current consensus price target is $5.20, suggesting downside of -7.5% (ex-dividends)

The company's fiscal year ends in June.

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: 0.2

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

Morgan Stanley rates TRS as Underweight (5) -

The Reject Shop has received a takeover bid from Allensford. The on-market offer is $2.70 a share and the bidder will seek to purchase all shares through to the close of trading on January 7, 2019.

The bidder currently has a relevant interest in 2.72% of the stock. Morgan Stanley believes the takeover bid could represent a positive outcome for shareholders, given the recent trading conditions.

Underweight rating, $2.10 target and In-Line industry view.

Target price is $2.10 Current Price is $2.77 Difference: minus $0.67 (current price is over target).
If TRS meets the Morgan Stanley target it will return approximately minus 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.46, suggesting downside of -11.2% (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

UBS rates VRT as Neutral (3) -

Virtus' AGM revealed trading for the first four months of FY19 has been below management expectation, due to disruption from moving clinics but also on an ongoing client preference for low-cost rather than full-service options, which has diluted margins.

Which suggests to the broker the company's outlook appears "bleak". Valuation is undemanding hence Neutral retained. Target falls to $5.05 from $5.60.

Target price is $5.05 Current Price is $4.89 Difference: $0.16
If VRT meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $6.11, suggesting upside of 24.9% (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 WEB as Upgrade to Outperform from Neutral (1) -

After the strong FY18 result and even stronger run up in the share price, Credit Suisse believed Webjet was fully priced and downgraded to Neutral. Since then, the stock has materially underperformed and Webjet has also acquired Destinations of the World.

The trading update for FY19 has confirmed momentum is strong and the growth outlook attractive, hence Credit Suisse moves the rating back to Outperform. Target is reduced to $14.40 from $16.00.

Target price is $14.40 Current Price is $11.98 Difference: $2.42
If WEB meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $16.42, suggesting upside of 37.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.6

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

Macquarie rates WES as Resume Coverage with Outperform (1) -

After the de-merger of Coles ((COL)) more than 50% of the company's operating earnings (EBIT) will come from Bunnings. Macquarie's survey indicates a slowing residential market may ultimately lead to slower sales for Bunnings and weak seasonal conditions in NSW also impinge.

Nevertheless, activity remains high and the business is supported by price leadership and an increasing addressable market. Macquarie resumes coverage of Wesfarmers with an Outperform rating and $36.51 target.

Target price is $36.51 Current Price is $31.34 Difference: $5.17
If WES meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $45.38, suggesting upside of 44.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Morgan Stanley rates WES as Underweight (5) -

Morgan Stanley notes Coles ((COL)) has begun trading with an initial share price of $12.50. The broker calculates the current Wesfarmers share price implies a PE of 19x FY19 for Bunnings based on its valuation and earnings estimates.

The broker assumes notional PEs of 10x for Kmart, 10x for Target, 16x for Officeworks and 16x for the industrial and safety division.

Underweight rating, $45 target and Cautious industry view maintained.

Target price is $45.00 Current Price is $31.34 Difference: $13.66
If WES meets the Morgan Stanley target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $45.38, suggesting upside of 44.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY19:

Forecast for FY20:

Market Sentiment: 0.0

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

Credit Suisse rates WPL as Outperform (1) -

Woodside has signed a domestic gas supply agreement with Perdaman for 125 TJ/d over 20 years beginning in 2023-25, to be mostly supplied by Scarborough. Credit Suisse believes WA prices will tighten from the mid 2020s but would need to be below $5/GJ for the economics of the new urea plant to stack up.

The broker suspects there may have been strong political pressure for Woodside to address domestic gas supply obligations and underpin new manufacturing jobs, which the deal will relieve. The broker raises the issue that political support for Scarborough/Browse could easily be worth more than a price cut on some domestic gas volumes. Outperform rating and $43.42 target maintained.

Target price is $43.42 Current Price is $31.89 Difference: $11.53
If WPL meets the Credit Suisse target it will return approximately 36% (excluding dividends, fees and charges).

Current consensus price target is $37.92, suggesting upside of 18.9% (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: 0.3

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