Australian Broker Call

Morgan Stanley rates 360 as Overweight (1) -

Morgan Stanley emphasises three conviction Overweight-rated stocks which still offer "mispriced optionality" or the ability to generate upside surprises relative to consensus expectations, including Life360, Eagers Automotive, and Temple & Webster.

The analyst explains Life360 has one of the fastest advancing user bases for a listed ASX company, with growth largely underpinned by 'word-of-mouth', which infers lower user acquisition costs compared to traditional awareness marketing exercises.

Management has displayed resilience during covid, and scaling of the business has been achieved with the improvement of user features and higher monetisation of services and products.

Overweight rating re-iterated. Target price raised to $40 from $33.30. Industry View: In-Line.

Target price is $40.00 Current Price is $32.07 Difference: $7.93
If 360 meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $35.63, suggesting upside of 9.9% (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: 1.0

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

Morgan Stanley rates APE as Overweight (1) -

Morgan Stanley emphasises three conviction Overweight-rated stocks which still offer "mispriced optionality" or the ability to generate upside surprises relative to consensus expectations, including Eagers Automotive, Temple & Webster and Life360.

The analyst details Eagers has multiple organic levers to improve the business and grow earnings over time, including lifting margins, optimising the network, retail joint ventures, offshore expansion, and acquisitions where synergies can be achieved.

The auto market is also at a cyclical low, and over the last one to two decades, new vehicle sales have grown at around 1%-1.5% per annum, with population growth likely to support the future.

Overweight rating re-iterated with a higher target price of $20 from $17. Industry view: In-Line.

Target price is $20.00 Current Price is $16.88 Difference: $3.12
If APE meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $17.29, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

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

Morgan Stanley rates ASX as Underweight (5) -

Morgan Stanley notes the June month-to-date interest rate futures contracts on ASX point to 26% y/y growth in 2H25 year-to-date. This compares with the consensus forecast of a 15% y/y rise in 2H.

The broker reminds futures volumes growth may not fully translate to equivalent growth in underlying net profit, and its own estimate suggests a 5% change in 2H25 total volumes would impact underlying net profit by 2%.

Underweight. Target unchanged at $57.10.

Target price is $57.10 Current Price is $67.73 Difference: minus $10.63 (current price is over target).
If ASX meets the Morgan Stanley target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $66.08, suggesting downside of -4.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.5

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

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

Boss Energy announced production at its Honeymoon project reached 851klbs, surpassing its FY25 guidance of 850klbs. This compares with Morgan Stanley's forecast for 853klbs and the consensus for 876klbs production.

While production will continue for the rest of the month, the company indicated the run-rate will be slower due to a short planned maintenance program.

No update on FY25 costs, with the broker looking forward to July 28 for FY26 production and cost guidance.

Equal-weight. Target unchanged at $2.70.

Target price is $2.70 Current Price is $4.66 Difference: minus $1.96 (current price is over target).
If BOE meets the Morgan Stanley target it will return approximately minus 42% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.16, suggesting downside of -10.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.9

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

Morgans rates BTL as Speculative Buy (1) -

Beetaloo Energy has commenced hydraulic stimulation of its key Carpentaria-5H well, the longest lateral drilled in EP187. The company has employed a large, powerful set of hydraulic fracturing equipment spread over 60 stages, explains Morgans.

The broker notes the program coincides with a strong IP30 flow result of 7.2mmcfpd from a neighbouring Falcon Oil & Gas/Tamboran Resources ((TBN)) joint venture  well, highlighting the potential of the Velkerri B shale.

Beetaloo’s C-5H is a material scale-up from prior pilots, highlights the analyst, designed to test enhanced completion techniques and deliverability, with flow test results due in the September quarter.

Cash of $40.5m provides a solid runway through the pilot, according to the broker, while approval from traditional owners could unlock further debt funding.

Morgans retains its Speculative Buy rating and lowers its target price to 73c from 74c.

Target price is $0.73 Current Price is $0.19 Difference: $0.545
If BTL meets the Morgans target it will return approximately 295% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Bell Potter rates CNI as Upgrade to Hold from Sell (3) -

Bell Potter has upgraded Centuria Capital to Hold from Sell following recent underperformance vs the REIT sector and peers like Charter Hall ((CHC)). 

The broker believes fears over Bass Capital's private credit risks are easing, and capital transaction markets, mainly in retail and New Zealand, are normalising.

The broker notes the market is wary about office exposure but is not assigning enough value to the FUM platform. 

The analyst expects FY25 results to be solid and the recent ResetData acquisition to be accretive from FY26. Target lifted to $1.80 from $1.70.

Target price is $1.80 Current Price is $1.67 Difference: $0.135
If CNI meets the Bell Potter target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.95, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

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

Bell Potter rates COF as Downgrade to Sell from Hold (5) -

Bell Potter believes Centuria Office REIT's share price rise over the last three months is out of step with market conditions for the suburban office sector. 

With 9% vacancy and 13% of portfolio expiry due in FY26, the broker reckons the risk is to the downside in the near term.

The broker increased its 12-month weighted average capitalisation rate by 60bps from 40bps to reflect market conditions.

Rating downgraded to Sell from Hold. Target cut to $1.10 from $1.20.

Target price is $1.10 Current Price is $1.23 Difference: minus $0.13 (current price is over target).
If COF meets the Bell Potter target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.13, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates CRN as Hold (3) -

Ord Minnett notes Coronado Global Resources' improved cash position following the refinancing of US$160m asset-based debt facility and a $75m prepayment from Stanwell for future thermal coal supply.

However, softer coal prices are expected to weigh on free cash flow with -US$210m forecast over 2H25-FY26. The broker is forecasting an improvement in FY27 to US$35m.

Hold retained. Target price cut to 15c from 20c on pre-payment of future coal revenue from FY27 and conservative production/cost forecast for the June quarter.

Target price is $0.15 Current Price is $0.14 Difference: $0.01
If CRN meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $0.17, suggesting upside of 21.4% (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: 0.0

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

Bell Potter rates CU6 as Speculative Buy (1) -

Clarity Pharmaceuticals upgraded its agreement with SpectronRX to commercial manufacturing from clinical, ahead of expected approvals for both SAR-bisPSMA and SARTATE for prostate cancer and neuroendocrine tumours.

Until now, SpectronRX was the supplier of 64Cu SAR bisPSMA for ongoing clinical studies in the US. The agreement is non-exclusive, allowing the company to contract additional doses from other manufacturers.

Bell Potter believes the two supply agreements for 64Cu, including with Nusano signed in April, will be more than enough to meet long-term demand.

Speculative Buy. Target unchanged at $4.90.

Target price is $4.90 Current Price is $2.18 Difference: $2.72
If CU6 meets the Bell Potter target it will return approximately 125% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Shaw and Partners rates CWP as Buy (1) -

Cedar Woods Properties purchased an 11,600 sqm site in Fairfield, Victoria, for -$50m, where it plans to build 300 apartments over FY29-31.

Shaw and Partners believes the location is excellent and the supply-demand imbalance of homes in Victoria works in favour of this development.

The broker estimates it added 25c/share to its valuation. Buy. Target rises to $7.40 from $7.15.

Target price is $7.40 Current Price is $6.64 Difference: $0.76
If CWP meets the Shaw and Partners target it will return approximately 11% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

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

Ord Minnett rates EOS as Downgrade to Accumulate from Buy (2) -

Ord Minnett notes Electro Optic Systems' share price doubled since last month when it announced a $53m contract for its Slinger Counter-Drone Remote Weapons System.

The broker remains positive on the counter-drone theme and expects more contract wins from the $1.5bn pipeline opportunity and NATO's mandate for higher defence spend.

The analyst lifted FY27 EBITDA forecast by 10% and adjusted the cost of debt, resulting in a rise in the target price to $2.30 from $1.80.

Rating downgraded to Accumulate from Buy.

Target price is $2.30 Current Price is $2.77 Difference: minus $0.47 (current price is over target).
If EOS meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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

Citi rates FBU as Buy (1) -

Citi revised its view on the housing market in New Zealand, now expecting a more muted recovery, which translates to a similar view on Fletcher Building.

The broker previously expected interest rate cuts to drive a housing recovery, but notes house prices and consents in the Auckland market have underperformed the rest of New Zealand.

Buy retained to reflect a stabilising market. Target cut to NZ$3.75 from NZ$3.90.

Current Price is $3.02. Target price not assessed.

Current consensus price target is $3.04, suggesting upside of 4.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

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

Market Sentiment: 0.0

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

Citi rates KAR as Buy (1) -

Karoon Energy successfully bid for 100% interest in six blocks in Brazil's Santos Basin, with two blocks 17kms from the Neon fields and the remaining four deepwater blocks around 80kms from Bauna field.

Citi highlights this will provide an upside opportunity for future tie-backs. The company lifted the FY25 capex estimate to -US$120-140m from -US$105-125m to incorporate US$20.9m for signature bond payments and minimum work program guarantees.

The payments are likely in 4Q when the formal granting of the blocks is expected. Buy. Target unchanged at $2.20.

Target price is $2.20 Current Price is $2.02 Difference: $0.18
If KAR meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $2.17, suggesting upside of 6.6% (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

Ord Minnett rates KLS as Buy (1) -

Kelsian Group secured a workforce transportation contract via head contractor Worley ((WOR)) totalling US$59m for the construction phase of the CP2 LNG project.

The contract begins this month and runs until project completion in August 2028. Ord Minnett expects margins will be higher than the 23% average on the company's other US bus operations.

No change to FY25 EPS forecasts but FY26 trimmed by -0.9% on currency mark-to-market and higher costs, while FY27 forecast lifted by 4.2%.

Buy. Target unchanged at $3.80.

Target price is $3.80 Current Price is $3.24 Difference: $0.56
If KLS meets the Ord Minnett target it will return approximately 17% (excluding dividends, fees and charges).

Market Sentiment: 1.0

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

UBS rates KLS as Buy (1) -

Kelsian Group has secured a US$59m contract with Worley ((WOR)) to service the CP2 LNG project in Louisiana over three years. Meaningful contributions are expected in FY27–28 and initial capex of -US$13m in 1H26 for fleet deployment.

The broker highlights the contract's attractive margins and estimates it could add around 7% to FY26 All Aboard America! Holdings, Inc. (AAAHI) revenue forecasts on a run-rate basis.

It's though Kelsian is well positioned to win additional industrial and energy contracts.

Although earnings upgrades are modest in the near term, UBS lifts FY25–27 EPS forecasts by between 1-6% on improved trading momentum in AAAHI and stronger domestic bus margins.

The analysts list further catalysts including potential LNG wins, a renewal for Regional 6 in Sydney, and the outcome of the strategic review of tourism assets, which could help deleverage the balance sheet.

UBS retains a Buy rating and a $4.80 target price.

Target price is $4.80 Current Price is $3.24 Difference: $1.56
If KLS meets the UBS target it will return approximately 48% (excluding dividends, fees and charges).

Current consensus price target is $4.30, suggesting upside of 20.1% (ex-dividends)

The company's fiscal year ends in June.

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

Morgans rates NXT as Buy (1) -

Morgans highlights NextDC's signing of its first international cornerstone customer, a hyperscaler committing to 10MW at the upcoming KL1 data centre in Malaysia, which is due to commence operations in early 2026.

The broker sees the contract as strategically important, serving as an initial validation point for the company’s offshore expansion and acting as a likely catalyst for enterprise demand.

An additional 6MW of contracts in Australia brings total contracted capacity to 244MW, suggesting to the analyst stronger-than-expected domestic sales momentum in the second half of 2025.

Morgans lifts its FY27 earnings (EBITDA) forecast by 4% to $292m and raises FY26 capex by 30% to -$2bn to reflect accelerated build-outs in Kuala Lumpur and Melbourne.

The broker retains its Buy rating and $18 target price.

Target price is $18.80 Current Price is $14.01 Difference: $4.79
If NXT meets the Morgans target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $19.57, suggesting upside of 39.4% (ex-dividends)

The company's fiscal year ends in June.

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

Bell Potter rates PTM as Upgrade to Hold from Sell (3) -

The merger terms between Platinum Asset Management and L1 Capital ((LSF)) have been renegotiated in favour of the latter, which hasn't surprised Bell Potter, given the -$2bn decline in FUM in Platinum between March and May.

Under the revised terms, L1 Capital shareholders will own 74% of the merged business vs 75% in the initial agreement. But the combined entity will receive performance fees for the first 3.0% of absolute returns vs 5.0% before.

Overall, this means L1 Capital has taken -$100m off the table, which is roughly equivalent to performance fees for $1bn of institutional mandate loss, the broker estimates.

Rating upgraded to Hold from Sell. Target cut to 49c from 52c.

Target price is $0.49 Current Price is $0.51 Difference: minus $0.015 (current price is over target).
If PTM meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.5

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

Citi rates SEK as Buy (1) -

Citi views the May employment report from Seek as showing additional signs that the rate of decline in new job ads is stabilising.

New job ads for 2H25 in Australia slipped -8%, which meets the analyst's forecast for A&NZ, 2H25, with the NZ data not yet released.

In May, new Australian job ad volumes fell -6% on a year earlier. This is the slowest rate of decline in two years, the broker explains, while Australian advertised salaries rose 3.6% on the previous period.

Buy rated with $28.50 target price.

Target price is $28.50 Current Price is $23.91 Difference: $4.59
If SEK meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $27.91, suggesting upside of 17.8% (ex-dividends)

The company's fiscal year ends in June.

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

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

Bell Potter has initiated coverage of Sonic Healthcare with a Buy rating and target price of $33.70.

Following a significant decline in EBITDA margins post-covid, the broker expects recovery over the medium term on moderation in inflation and company initiatives. The forecast is for a 110bps improvement over FY25-27.

The analyst expects revenue to grow to a three-year compounded annual rate of 7.3% on structural drivers, including an ageing population, higher healthcare spending and technological advances. Genetic testing, currently less than 10% of total revenue, is expected to increase in line with growing global demand.

The broker believes the company has sufficient balance sheet capacity to fund growth, with cash reserves of over $800m forecast at the end of FY25, and total free cash flow of $2bn expected over FY25-27. 

The broker highlights the stock typically trades at a 27% premium to XJO but that premium has narrowed to 13%.

Target price is $33.70 Current Price is $26.22 Difference: $7.48
If SHL meets the Bell Potter target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $29.34, suggesting upside of 11.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

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

Morgan Stanley rates TPW as Overweight (1) -

Morgan Stanley emphasises three conviction Overweight-rated stocks which still offer "mispriced optionality" or the ability to generate upside surprises relative to consensus expectations, including Temple & Webster, Eagers Automotive, and Life360.

Temple & Webster's homewares and furniture business is the most crucial factor to underpin the analyst's rating on the stock.

The broker details the factors including long-term tailwinds from migration of consumers to an online platform (market share at 18% in 2023), the benefits of scaling the business, rising market share, and ongoing margin expansion.

The company also has a robust balance sheet with the benefits of AI to flow through. Overweight rating re-iterated. Target price hoisted to $28 from $18. Industry View: In-Line.

Target price is $28.00 Current Price is $21.85 Difference: $6.15
If TPW meets the Morgan Stanley target it will return approximately 28% (excluding dividends, fees and charges).

Current consensus price target is $20.53, suggesting downside of -6.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.2

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