Australian Broker Call

Citi rates BAP as Neutral, High Risk (3) -

After a full review of Bapcor's trading update, Citi lowered FY26-28 net profit forecasts by -16% to -31%. The broker warns gearing is a growing risk, with the company needing to negotiate a higher FY26 covenant with its lenders.

Target cut to $2.28 from $3.10. Neutral/High Risk maintained.

Early comments follow:

Citi flagged a possible downgrade might be in the wings for Bapcor post the AGM, and today's 1H26 downgrade is disappointing given guidance for FY26 was given in October. It is surprising to the analyst, given five directors purchased shares on market post-AGM.

The company has lowered 1H26 net profit after tax guidance to a net loss of -$5m to -$8m versus $3m-$7m profit previously, with FY26 guidance for net profit after tax downgraded by -33% at the midpoint.

Bapcor expects some improvements in 2H26, as trading conditions in October and November have been below expectations.

Target price is $2.28 Current Price is $1.85 Difference: $0.43
If BAP meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

Macquarie rates BAP as Neutral (3) -

Bapcor downgraded FY26 net profit after tax guidance by around -17% at the midpoint vs the AGM update on Oct 20. This follows disappointing trading in Oct and Nov , mainly in the trade segment with falls in tools and equipment, Macquarie observes.

The trade division continues to be challenged with management's operational review continuing as it invests to win back market share.

The broker also points to discussions with lenders since Oct 20 as Bapcor looks to raise its leverage covenant for FY26.

Macquarie lowers EPS estimates by -24% for FY26 and -17% for FY27 post the guidance downgrade. Target price is also lowered by -29% to $2.05. No change to Neutral rating.

Target price is $2.05 Current Price is $1.85 Difference: $0.2
If BAP meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

Morgan Stanley rates BAP as No Rating (-1) -

Bapcor’s core Trade division, previously seen as resilient and the main value driver, has weakened in Oct-Nov, with price cuts to rebuild share also squeezing margins, Morgan Stanley notes.

In a guidance update, the company has flagged 1H26 statutory net profit will now be a -$5-8m loss and underlying net profit is seen at $5-8m vs consensus of $18.8m. FY26 underlying net profit guided at $44-49m vs consensus of $56.6m.

The broker reckons the balance sheet will come under focus as the company seeks a higher FY26 leverage covenant.

The broker is currently under research restriction. Industry view is In-Line.

Current Price is $1.85. Target price not assessed.

Current consensus price target is $2.15, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

Morgans rates BAP as Hold (3) -

Bapcor downgraded FY26 net profit after tax guidance by around -17% and 1H26 net profit after tax by around -60%, from weaker trading in October and November.

Management continues to be more positive about the outlook for 2H26, but Morgans cautions that the extent of the downgrade poses possible downside risks to 2H26 forecasts.

The company is seeking operational improvements in 2H, the analyst explains, which should support top-line growth, as well as pre-tax savings from the cost program of around $20m.

Morgans downgrades EPS estimates by -23.5% for FY26 and -20.5% for FY27. Target price falls to $1.95 from $2.75.

Target price is $1.95 Current Price is $1.85 Difference: $0.1
If BAP meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

Ord Minnett rates BAP as Hold (3) -

Bapcor cut FY26 net profit guidance to $44-49m from $51-61m after softer 1H26 trading, mainly due to weaker Trade performance and margin pressure from price cuts to regain share.

Ord Minnett notes Retail (Autobarn) improved with 1.3% sales growth in Oct-Nov, while Specialised Networks and New Zealand are tracking to plan.

Management is renegotiating FY26 debt covenants with net leverage likely raised to over 3.0x, the broker observes. FY26 earnings forecast cut by -16% and FY27 by -10%. 

Hold remains. Target cut to $2.30 from $3.02.

Target price is $2.30 Current Price is $1.85 Difference: $0.45
If BAP meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $2.15, suggesting upside of 18.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

UBS rates BAP as No Rating (-1) -

Bapcor issues another downgrade on weaker Oct-Nov trading, now expecting 1H26 underlying net profit of $5-8m vs $14-18m before, marking a -59% downgrade at midpoint, UBS observes.

FY26 underlying net profit downgraded to $44-49m from $51-61m previously. The broker reckons 1H26 looks materially weaker, forcing a much bigger 2H rebound.

The guidance midpoint implies an unusually back-ended 1H/2H 20%/80% split for FY26 net profit, the broker highlights. Balance sheet concerns have risen as FY26E ND/EBITDA drifts from 2.6x to 2.95x, though lender talks on higher covenants are progressing.

The broker has a research restriction, so no forecasts, target price or rating. 

Current Price is $1.85. Target price not assessed.

Current consensus price target is $2.15, suggesting upside of 18.5% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.0

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

Ord Minnett rates BHP as Accumulate (2) -

BHP Group has struck a US$2bn sale-and-leaseback deal with BlackRock’s GIP (Global Infrastructure Partners), selling 49% of WAIO’s inland power assets into a new trust.

The company will have a 51% stake and full control, and completion is expected by end-FY26, Ord Minnett notes.

BHP will pay a 25-year electricity tariff to the trust, with estimates implying US$130m per year and an NPV benefit of about US$800m. Although the tariff could theoretically lift WAIO costs by US$0.50/t, the broker expects BHP to absorb this centrally so unit costs could stay broadly unchanged.

The transaction points to further infrastructure monetisation, supporting a higher dividend payout outlook toward 60% by FY30. The broker highlights Rio Tinto ((RIO)) is pursuing similar asset-recycling moves.

No change to forecasts. Accumulate retained and target unchanged at $45.

Target price is $45.00 Current Price is $44.30 Difference: $0.7
If BHP meets the Ord Minnett target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $45.32, suggesting upside of 1.4% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

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

Bell Potter rates BPG as Initiation of coverage with Speculative Buy (1) -

Bell Potter has initiated coverage of Black Pearl with a Speculative Buy rating and a target price of $1.45.

The company runs the Pearl Engine platform and its own LLM (large language model) to turn anonymous web traffic into identifiable, high-intent sales leads, supporting SME marketing.

The broker notes the company has pivoted from legacy email tools to AI-driven prospecting, lifting annual recurring revenue (ARR) to NZ$19.5m as of September from NZ$4.6m the year before.

The broker is modelling NZ$50m ARR by 3Q31, supported by expanding Pearl Diver/Engine into wholesale DaaS/PaaS, the B2BRocket acquisition and bot-traffic elimination that improves ad efficiency.

Upside potential is seen from a huge North American SME market, plus strong unit economics that could accelerate ARR and bring forward EBITDA breakeven.

Target price is $1.45 Current Price is $0.85 Difference: $0.6
If BPG meets the Bell Potter target it will return approximately 71% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Bell Potter rates CAR as Buy (1) -

Bell Potter has re-affirmed its positive view on CAR Group after the tech sell-off, re-iterating its platform roadmap should unlock value across its leading marketplaces.

The broker believes key growth levers remain expansion of C2C payments in Australia, a pay-per-lead model to gain share in North American marine, adjacencies in Latin America, and stronger dealer CRM tools.

The dealer subscription model smooths earnings versus cyclical peers, supporting a historically steady EPS profile, in the broker's view.

No change to forecasts. Buy retained with unchanged target of $42.20.

Target price is $42.20 Current Price is $32.38 Difference: $9.82
If CAR meets the Bell Potter target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $42.15, suggesting upside of 31.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Bell Potter rates CHN as Speculative Buy (1) -

Chalice Mining delivered a key milestone for its 100%-owned Gonneville project near Perth, releasing a pre-feasibility study (PFS) plus maiden ore reserve estimate.

Bell Potter notes it supports progress toward DFS targeted for 1H2027, final investment decision for 1H2028, and financing.

The PFS outlines a staged 23-year open-pit mine with processing lifting to 12 Mtpa in Stage 2 from 5Mtpa in Stage 1 via conventional crush-grind and sulphide flotation.

The broker updated its model to align with the PFS settings and long-term prices, resulting in a slight cut to its valuation as cost and price benefits are outweighed by weaker grades, recoveries, and output.

Speculative Buy. Target trimmed to $4.00 from $4.10.

Target price is $4.00 Current Price is $1.66 Difference: $2.34
If CHN meets the Bell Potter target it will return approximately 141% (excluding dividends, fees and charges).

Current consensus price target is $2.73, suggesting upside of 64.2% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Macquarie rates COL as Outperform (1) -

Coles Group offered a tour of its main manufacturing facilities in NSW where it showed its vertically integrated fresh food production sites post major investments in supply chain assets.

Macquarie noted the meat facility processes both red and white meat with "trusted" livestock producers and operates 24/7, processing 5,500 tonnes of product per month which supplies over 600 stores.

The Fresh Milk Co NSW site was acquired from Saputo in 2024 and operates five days a week for 16 hour days with over 200m litres of milk processed every year from two facilities.

Convenience meals (Chef Fresh) site has capacity to manufacture 970 tonnes of cooked products and 1.5m meals per week, the analyst outlined.

The stock remains Outperform rated with a $26.10 target price.

Target price is $26.10 Current Price is $21.79 Difference: $4.31
If COL meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $24.90, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

UBS rates COL as Buy (1) -

UBS attended a tour of Coles Group's Erskine Park meat and fresh milk plants plus the Chef Fresh meals site.

They underpin the company's vertical integration in key food categories, sitting close to major NSW/VIC distribution hubs to cut transport, waste and markdowns, the broker remarks.

These facilities supply a large share of Coles’ own-label meat, poultry, milk and ready-to-eat meals, enabling faster innovation and longer shelf life in high-traffic, high-trust categories.

Strategic gains include best-in-class availability and quality, stronger supply security, growth in own brand, lower end-to-end costs, quicker product innovation, and broader supply-chain efficiency, the broker highlights.

No change to forecasts. Buy retained, with unchanged target of $25.

Target price is $25.00 Current Price is $21.79 Difference: $3.21
If COL meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $24.90, suggesting upside of 14.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Macquarie rates DBI as Outperform (1) -

Macquarie notes Dalrymple Bay Infrastructure has refinanced the 2020 US private placement (USPP) debt via $1.07bn of facilities (not fully drawn). It has a net neutral impact on the net present value as the USPP reflected the value of yield spreads declining to 156bps from 326bps.

The analyst explains cashflow is improved by around $15m p.a over the next five years and adds a possible 3cpa to the dividend per share.

There is ongoing potential for Dalrymple to refinance the residual USPPs to further enhance cash flow.

Target price is raised to $5.33 from $4.91 previously. Outperform rating retained.

Target price is $5.33 Current Price is $4.54 Difference: $0.79
If DBI meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Morgans rates DBI as Accumulate (2) -

The announced restructuring of Dalrymple Bay Infrastructure's debt suggests the cost of the new debt is significantly lower. This underpins Morgans' upgrade of share price target to $5.10 from $4.73 previously.

New debt facilities of $1.07bn were announced, offered by a group of Australian and offshore banks, and will be used to repay US$644m of 2020 US private placement notes that had 2027, 2030 and 2032 maturities.

The weighted margin for the new debt facilities at 1.56% compares to a total average of 3.26% p.a. average margin for the USPP, the broker highlights.

Dalrymple is now well funded for its capex commitments to non-expansionary projects.

Morgans "endorses" the Accumulate rating with a "call to action" on the stock.

Target price is $5.10 Current Price is $4.54 Difference: $0.56
If DBI meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $5.21, suggesting upside of 8.3% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

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

Macquarie rates GNE as Underperform (5) -

The NZ government is about to release the outcome of its ROI for an LNG import terminal to be commissioned by 2027, at the end of next week, and Macquarie believes it is likely the terminal will be operated by the private sector.

The analyst estimates around 200MW of gas peaker capacity would be required to support the long term capacity challenges.

Target price lifts to NZ$2.14 from NZ$2.03 with no change in Underperform rating. No change to the broker's earnings forecasts.

Current Price is $2.09. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

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

Market Sentiment: -0.5

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

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

Morgan Stanley believes Australian insurers are poised for outperformance on support from falling reinsurance prices into the January 2026 renewals.

Suncorp Group is best positioned in the broker's view, with Insurance Australia Group seen as having room to optimise, and QBE Insurance having scope to tighten reinsurance.

The broker notes Insurance Australia Group already benefits from $1.6bn CET1 relief via quota-share reinsurance and runs higher gearing. But it could still lift capital by adding 30ppt quota-share to commercial lines or trimming personal quota-share to give shareholders more earnings exposure.

Equal-weight maintained as near-term earnings visibility and extra capital potential look largely priced in. Target unchanged at $8.80 and Industry View remains In-Line.

Target price is $8.80 Current Price is $7.92 Difference: $0.88
If IAG meets the Morgan Stanley target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $9.03, suggesting upside of 14.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.2

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

Bell Potter rates IMM as Speculative Buy (1) -

Immutep has licensed the development and commercialisation of Efti to Dr Reddy’s Laboratories for Emerging Markets (countries excluding NA/EU/Japan/China).

It will earn US$20m upfront, up to US$350m in milestones, and double-digit royalties, while keeping manufacturing and key Phase 3 lung-cancer responsibilities plus rights in major markets, Bell Potter observes.

The broker sees the deal as strong validation and providing non-dilutive funding, while preserving the high-value US/EU/Japan rights for future partnerships and potentially prompting more interest (e.g., Merck).

Target rises to 60c from 46c as forecasts are updated to reflect contributions from this deal in FY26-27. Speculative Buy retained.

Target price is $0.60 Current Price is $0.32 Difference: $0.28
If IMM meets the Bell Potter target it will return approximately 87% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Citi rates LIC as Buy (1) -

Lifestyle Communities will roll out the New DMF (deferred management fee) Model to all existing homeowners after a successful trial, even while continuing its VCAT appeal, Citi notes.

Because the DMF for existing residents was written down to zero in FY25, the broker reckons a win could lift the DMF carrying value by up to $117m. This would boost NTA about 19% to $6.13/share from $5.17 at 30 Jun 2025.

The broker sees Lifestyle Communities as well-placed for a recovering Melbourne market with near-term upside to NTA and sales as referrals improve. Buy maintained with unchanged target of $7.

Target price is $7.00 Current Price is $5.44 Difference: $1.56
If LIC meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $6.48, suggesting upside of 19.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.5

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

Macquarie rates LOT as Outperform (1) -

Lotus Resources is experiencing sulfuric acid shortages from its Zambian supplier which has tempered throughput for Kayelekera in the December quarter. Macquarie notes management has secured additional supply from South Africa (10-day drive) which should help.

The analyst has deferred the initial export to the June quarter next year due to the acid issues and the time to achieve product accreditation.

Due to lower production from Kayelekera, the push back in first sale, the broker lowers FY26 EPS estimate by -1.6c per share with less downgrades to FY27/FY28.

No change to Outperform rating and 28c target price.

Target price is $0.28 Current Price is $0.17 Difference: $0.11
If LOT meets the Macquarie target it will return approximately 65% (excluding dividends, fees and charges).

Current consensus price target is $0.34, suggesting upside of 98.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 1.0

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

Citi rates MGR as Buy (1) -

Mirvac Group, with Infrastructure NSW, has been named the preferred developer for the 3.6-ha old Sydney Fish Market site in Blackwattle Bay to create a major mixed-use precinct.

Citi notes the plan includes over 1,400 homes, with student housing via Scape, plus commercial/retail space and a 26,000sqm public domain.

The project lifts Mirvac’s development pipeline and medium-term earnings visibility, adding more Sydney residential exposure across build-to-sell and build-to-rent, the broker highlights.

With the pipeline now clearer, the broker sees scope for earnings upside and a re-rating in valuation multiples. The news is, however, slightly negative for Lendlease Group ((LLC)) as it was also competing for the project.

Buy maintained for Mirvac, with unchanged target of $2.60.

Target price is $2.60 Current Price is $2.04 Difference: $0.56
If MGR meets the Citi target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $2.48, suggesting upside of 23.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.4

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

Shaw and Partners rates MMI as Buy (1) -

Metro Mining posted a November shipping record of 783k wmt of bauxite, taking year-to-date shipments to 5.6m wmt and keeping it on track to meet 6.2-6.6m wmt guidance, Shaw and Partners highlights.

The broker notes the company also set a vessel-loading record, filling 178kt onto the Zhi NV Star in 5.6 days.

Despite strong FY25 records, Metro missed early-year volume expectations, so the broker conservatively downgraded its FY26 forecast to 6.8Mt and FY27 to 7.0Mt, from 7.5Mt each.

The broker also trimmed its price forecast for bauxite, resulting in a -14% cut to FY25 EBITDA forecast and a -32% downgrade to FY26.

Buy retained. Target cut to 15c from 17c, but the broker still calls the company its top pick.

Target price is $0.15 Current Price is $0.07 Difference: $0.079
If MMI meets the Shaw and Partners target it will return approximately 111% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

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

Macquarie rates MP1 as Outperform (1) -

Macquarie explains that there is a significant Latitude indirect sales opportunity for Megaport, although it is not included in the acquisition assumptions.

The Latitude product complements Megaport's offering and offers a direct position to a large, and rapidly growing, end market via Stripe, Mercado Libre and Grok via compute. Latitude also offers compute use cases in blockchain and stablecoins.

The analyst's model infers the return on invested capital varies by Latitude product, but over the life of the asset, the SKUs (stock keeping units) are over 100% with a double-digit internal rate of return.

Macquarie's EPS forecasts are upgraded meaningfully by 9% for FY26, 101% for FY27 and 106% for FY28. Target price is also upgraded to $21.70 from $18.50. Outperform rating retained.

Target price is $21.70 Current Price is $13.29 Difference: $8.41
If MP1 meets the Macquarie target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $15.53, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.3

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

Bell Potter rates MSB as Speculative Buy (1) -

Bell Potter highlights 2025 has been a standout year for Mesoblast. Ryoncil won FDA approval in late Dec 2024 and launched strongly, helped by universal Medicare cover from 1 Jul 2025 and a dedicated J-code from 1 Oct that effectively assures reimbursement.

The reimbursement clarity drove rapid uptake, resulting in the company guiding to the 2Q26 quarter gross revenue of at least US$30m at the AGM update. That was effectively a 50% upgrade vs 1Q26’s US$21.9m.

The broker lifted FY26 revenue forecast by 11% but operating expenses were also raised, leading to a -19% downgrade to FY26 EPS estimate. Speculative Buy maintained with unchanged target of $4.

Target price is $4.00 Current Price is $2.82 Difference: $1.18
If MSB meets the Bell Potter target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

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

Morgan Stanley rates QBE as Overweight (1) -

Morgan Stanley believes Australian insurers are poised for outperformance on support from falling reinsurance prices into the January 2026 renewals.

Suncorp Group is best positioned in the broker's view, with Insurance Australia Group seen as having room to optimise, and QBE Insurance having scope to tighten reinsurance.

QBE has less direct margin upside from cheaper reinsurance and fewer capital levers, the broker highlights, but its CAT cost management and stronger CAT budget aren’t fully recognised. Clearer event-cover limits or added aggregate cover could help, the broker reckons.

It could also bolster confidence with extra targets, and at 9.5x FY26E P/E the broker believes the stock looks attractively valued. Target trimmed to $23.00 from $23.50.

Overweight retained. Industry View: In-Line.

Target price is $23.00 Current Price is $19.25 Difference: $3.75
If QBE meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $23.62, suggesting upside of 23.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.8

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

Morgan Stanley rates SUN as Overweight (1) -

Morgan Stanley believes Australian insurers are poised for outperformance on support from falling reinsurance prices into the January 2026 renewals.

Suncorp Group is best positioned in the broker's view, with Insurance Australia Group seen as having room to optimise, and QBE Insurance having scope to tighten reinsurance.

Suncorp's CAT budget is weakest vs peers, so upgrading cover could lift earnings quality and drive a 2-3x P/E re-rating despite higher costs. The broker reckons it could use a quota share to fix its capital mix, potentially freeing $1.5bn CET1 for shareholders.

With the fastest benefit from lower reinsurance costs and the option to strike an early renewal, the broker lifted Suncorp's target to $24.40 from $24.15.

Overweight retained. Industry View: In-Line.

Target price is $24.40 Current Price is $16.92 Difference: $7.48
If SUN meets the Morgan Stanley target it will return approximately 44% (excluding dividends, fees and charges).

Current consensus price target is $21.53, suggesting upside of 26.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.4

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