Australian Broker Call

Morgan Stanley rates ANZ as Overweight (1) -

While risks have increased for Australian banks from the Russia/Ukraine crisis, Morgan Stanley believes this has already been captured in current trading multiples.

The broker feels the potential for higher funding costs is the largest risk and greatest source of uncertainty for Australian banks arising from the current environment. A 25bpt rise in term deposit rates relative to the cash rate is estimated to be a -3-4bpt drag on margins.

For ANZ Bank, the Overweight rating and $30 target are retained. Industry view: Attractive.

Target price is $30.00 Current Price is $25.85 Difference: $4.15
If ANZ meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $29.68, suggesting upside of 11.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Citi rates AX1 as Neutral (3) -

With Adidas expecting mono-brands to grow at twice the rate of multi-brands as consumer trends suggest a preference to buy direct from preferred brands, Citi notes Adidas' fourth quarter results highlight continuing direct-to-consumer sales risk for Accent Group.

Despite this Citi did note limited exposure left Accent Group at less risk than peers, with Adidas representing less than 10% of group sales and expected to further decline.

Looking ahead, Adidas expects supply challenges to significantly improve in the first quarter of 2022 but did guide to a mid to high single digit price increase in the second half of the year which it believes its consumer is prepared for. 

The Neutral rating and target price of $2.11 are retained.

Target price is $2.11 Current Price is $1.63 Difference: $0.48
If AX1 meets the Citi target it will return approximately 29% (excluding dividends, fees and charges).

Current consensus price target is $2.47, suggesting upside of 51.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

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

While risks have increased for Australian banks from the Russia/Ukraine crisis, Morgan Stanley believes this has already been captured in current trading multiples.

The broker feels the potential for higher funding costs is the largest risk and greatest source of uncertainty for Australian banks arising from the current environment. A 25bpt rise in term deposit rates relative to the cash rate is estimated to be a -3-4bpt drag on margins.

For Bendigo & Adelaide Bank, the Equal-weight rating and $9.60 target are retained. Industry view: Attractive.

Target price is $9.60 Current Price is $9.45 Difference: $0.15
If BEN meets the Morgan Stanley target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $10.14, suggesting upside of 4.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Macquarie rates BHP as Outperform (1) -

Macquarie raises EPS forecasts sharply for the major miners, including BHP, after upgrading its commodities deck.

The broker favours BHP and South32 ((S32)) over Fortescue Metals Group ((FMG)) and Rio Tinto ((RIO)).

Nickel forecasts rise 32% in the near term; aluminium forecasts rise 13% to 14% over 2022 to 2023; copper forecasts rise 7% to 16%, met coal prices rise 99% and 45%; iron ore price by 15% and 5% and gold by 9% and 1%.

Macquarie notes BHP is trading on an FY22 and FY24 free cash flow yield of 13%, which now increases to 15% and 27% in a spot price scenario.

Outperform rating retained. Target price rises to $60 from $48.49.

Target price is $60.00 Current Price is $47.69 Difference: $12.31
If BHP meets the Macquarie target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $48.54, suggesting upside of 2.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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 BOQ as Overweight (1) -

While risks have increased for Australian banks from the Russia/Ukraine crisis, Morgan Stanley believes this has already been captured in current trading multiples.

The broker feels the potential for higher funding costs is the largest risk and greatest source of uncertainty for Australian banks arising from the current environment. A 25bpt rise in term deposit rates relative to the cash rate is estimated to be a -3-4bpt drag on margins.

For Bank of Queensland, the Overweight rating and $10 target are retained. Industry view: Attractive.

Target price is $10.00 Current Price is $7.89 Difference: $2.11
If BOQ meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $10.23, suggesting upside of 27.7% (ex-dividends)

The company's fiscal year ends in August.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Macquarie rates BRG as Outperform (1) -

Breville Group has announced it will buy 100% of LELIT Group for E113m, through a half cash and half scrip offer, and core managers will join Breville. Settlement is expected by early July.

Macquarie notes Breville has not published LELIT's (an Italy-based specialty coffee group) financial metrics but says LELIT has proved a rapidly growing disruptor in the premium Italian-made espresso machine market and that it's acquisition is a good strategic fit for Breville.

Meanwhile, De'Longhi's FY21 result appears to have met Maquarie's expectations. Cost inflation and marketing eroded strong revenue growth, fourth-quarter margins falling to 8.9% from an average fourth-quarter margin of 15% across 2018-2020, notes the broker.

Management guided to steady organic revenue growth in 2022, with Russia and Ukraine (which constituted 4.9% of the FY21 revenue) expected to hit results.

Outperform rating and $34.80 target price retained.

Target price is $34.80 Current Price is $26.24 Difference: $8.56
If BRG meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $33.03, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

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

While risks have increased for Australian banks from the Russia/Ukraine crisis, Morgan Stanley believes this has already been captured in current trading multiples.

The broker feels the potential for higher funding costs is the largest risk and greatest source of uncertainty for Australian banks arising from the current environment. A 25bpt rise in term deposit rates relative to the cash rate is estimated to be a -3-4bpt drag on margins.

For CommBank, the broker doesn't have a rating or price target at present. Industry view: Attractive.

Current Price is $99.38. Target price not assessed.

Current consensus price target is $91.56, suggesting downside of -10.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

Citi rates CSL as Buy (1) -

Market data suggest plasma collections are on a path to recovery, and Citi expects plasma market demand and settlement of the Vifor acquisition to drive share price strength for CSL in coming months. 

The broker expects plasma collections to grow 10% on 2019 levels in the first half of 2022, but predicts CSL's gross margin to bottom. Elsewhere, Vifor's FY21 results were largely in line and pipeline launches remain on track. 

The Buy rating and target price of $335 are retained. 

Target price is $335.00 Current Price is $256.53 Difference: $78.47
If CSL meets the Citi target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $317.42, suggesting upside of 20.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Morgan Stanley rates CSL as Overweight (1) -

Morgan Stanley still expects CSL's collections to reach pre-pandemic levels by this March quarter.

The broker notes the US FDA has cleared a new plasma collection device from a third party that should aide a return to collection centers by enhancing the patient experience.

The $302 target price and Overweight rating are maintained. Industry view: In-Line.

Target price is $302.00 Current Price is $256.53 Difference: $45.47
If CSL meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).

Current consensus price target is $317.42, suggesting upside of 20.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Macquarie rates DCN as Downgrade to Underperform from Outperform (5) -

Macquarie has upgraded its commodities forecasts, with base metals and coal proving the winners and precious metals also receiving a leg up.

The broker's gold price assumption rises an average of 9% in FY22, and 1% in 2023. 

But the broker downgrades Dacian Gold to Underperform from Outperform in light of recent share price strength, and expects smaller producers will gain less leverage from the increase.

Macquarie's EPS forecasts rise sharply across the gold stocks, including Dacian Gold. Target price steady at 25c.

Target price is $0.25 Current Price is $0.24 Difference: $0.01
If DCN meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -1.0

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

Morgan Stanley rates DDR as Initiation of coverage with Overweight (1) -

Morgan Stanley initiates coverage of IT hardware and software distributor Dicker Data with an Overweight rating and $16 target price. Industry View: In-Line.

The broker believes the company can sustain elevated medium-term growth as it benefits from secular IT tailwinds. It's thought a current opportunity arises as the business is incorrectly viewed as a low margin and cyclical business.

The analyst points out Dicker Data has a leading competitive position with one of the largest vendor and product portfolios, complemented by leading technical capabilities. The valuation is estimated to be undemanding relative to key peer Data#3 ((DTL)).

Target price is $16.00 Current Price is $13.36 Difference: $2.64
If DDR meets the Morgan Stanley target it will return approximately 20% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates EVN as Downgrade to Underperform from Neutral (5) -

Macquarie has upgraded its commodities forecasts, with base metals and coal proving the winners and precious metals also receiving a leg up.

The broker's gold price assumption rises an average of 9% in FY22, and a 1% increase in 2023. 

But the broker downgrades Evolution to Underperform from Neutral in light of recent share price strength.

Macquarie's EPS forecasts rise sharply across the gold stocks, including Evolution Mining, albeit less than higher cost producers. Target price steady at $4.30.

Target price is $4.30 Current Price is $4.43 Difference: minus $0.13 (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 $4.31, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

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

Morgan Stanley advocates selective gold exposure for investors given recent geopolitical concerns and a gold sector that has corrected significantly since an early 2021 peak.

Of the four gold stocks that the broker covers in the sector, Evolution Mining is third ranked, behind Newcrest Mining ((NCM)) and Northern Star Resources ((NST)). The price target rises to $5.05 from $4.05. Equal-weight.

Target price is $5.05 Current Price is $4.43 Difference: $0.62
If EVN meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $4.31, suggesting downside of -3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.1

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

Macquarie rates GOR as Downgrade to Underperform from Outperform (5) -

Macquarie has upgraded its commodities forecasts, with base metals and coal proving the winners and precious metals also receiving a leg up.

The broker's gold price assumption rises an average of 9% in FY22, and 1%  in 2023. 

But the broker downgrades Gold Resources to Underperform from Outperform after recent share price strength and expects smaller caps may have less leverage to the run.

Target price steady at $1.70.

Target price is $1.70 Current Price is $1.78 Difference: minus $0.08 (current price is over target).
If GOR meets the Macquarie target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.75, suggesting upside of 1.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 0.3

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

Morgan Stanley rates JIN as Overweight (1) -

Morgan Stanley takes another look at Jumbo Interactive after shares have underperformed versus the overall market despite a 1H result in late February that beat on revenue.

In spite of feared competition from Australian lotteries brand The Lott (improved digital product and news agent incentives) the broker reminds investors that Jumbo Interactive has a younger audience. It also grows faster and plays more in periods of higher jackpots.

The analyst expects further strength from investment in 1H marketing, a strong start to 2H jackpots and OzLotto game changes.

The Overweight rating and $22 target are retained. Industry view: In-line.

Target price is $22.00 Current Price is $16.48 Difference: $5.52
If JIN meets the Morgan Stanley target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $20.17, suggesting upside of 13.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

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

While risks have increased for Australian banks from the Russia/Ukraine crisis, Morgan Stanley believes this has already been captured in current trading multiples.

The broker feels the potential for higher funding costs is the largest risk and greatest source of uncertainty for Australian banks arising from the current environment. A 25bpt rise in term deposit rates relative to the cash rate is estimated to be a -3-4bpt drag on margins.

For National Australia Bank, the analyst retains the Equal Weight rating and $31 target. Industry view: Attractive.

Target price is $31.00 Current Price is $29.94 Difference: $1.06
If NAB meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $31.50, suggesting upside of 3.7% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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

Morgan Stanley rates NCM as Overweight (1) -

Morgan Stanley advocates selective gold exposure for investors given recent geopolitical concerns and a gold sector that has corrected significantly since an early 2021 peak.

The broker likes Newcrest Mining for the long term given its potential to initiate growth with several projects progressing to a final investment decision. The target price rises to $34.20 from $29.60. Overweight. Industry View: Attractive.

Target price is $34.20 Current Price is $26.85 Difference: $7.35
If NCM meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $29.39, suggesting upside of 10.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

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

Macquarie has upgraded its commodities forecasts, with base metals and coal proving the winners, and downgrades Nickel Mines to Neutral from Outperform.

Macquarie's EPS forecasts rise sharply across the miners, one of the exceptions being Nickel Mines, the broker expecting coal costs will more than offset nickel price upgrades for the company in FY22.

Target price falls to $1.30 from $1.70.

Target price is $1.30 Current Price is $1.20 Difference: $0.1
If NIC meets the Macquarie target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $1.54, suggesting upside of 33.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Morgan Stanley rates NST as Upgrade to Overweight from Equal-weight (1) -

Morgan Stanley advocates selective gold exposure for investors given recent geopolitical concerns and a gold sector that has corrected significantly since an early 2021 peak.

The broker upgrades its rating for Northern Star Resources to overweight from Equal-weight and raises its target to $13.20 from $9.35. Industry View: Attractive.

Morgan Stanley lists many positives including the highest free cash flow yield for gold stocks under its coverage. Moreover, the stock provides the most earnings (EBITDA) leverage to a 10% higher gold price.

In addition, hedging provides one of the lowest downside sensitivities to gold price moves, explains the analyst.

Target price is $13.20 Current Price is $10.80 Difference: $2.4
If NST meets the Morgan Stanley target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $12.12, suggesting upside of 13.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

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

Macquarie has upgraded its commodities forecasts, with base metals and coal proving the winners and precious metals also receiving a leg up.

The broker's gold price assumption rises an average of 9% in FY22, and a 1% increase in 2023. 

But the broker downgrades Perseus Mining to Neutral from Outperform in light of recent share price strength - the assumptions do not include Orca Gold.

Macquarie's EPS forecasts rise sharply across the gold stocks, including Perseus Mining. Target price rises to $2 from $1.90.

Target price is $2.00 Current Price is $1.90 Difference: $0.1
If PRU meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $2.00, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates PSI as Neutral (3) -

PSI Insurance Group has announced an $80m capital raising to fund acquisitions at $4.50 a share (-5.3% to the previous closing price) and Macquarie says this should leave the company with $108m in its acquisition coffers.

Management expects the funds will be deployed in a similar fashion to its 2020 raising, which was largely dominated by UK purchases.

Macquarie notes the scarcity of UK brokerages has amped prices and cuts EPS forecasts -0.7% for FY22; -4.1% for FY23; and -3% thereafter.

Neutral rating retained. Target price falls to $4.65 from $4.80.

Target price is $4.65 Current Price is $4.62 Difference: $0.03
If PSI meets the Macquarie target it will return approximately 1% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

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

Macquarie has upgraded its commodities forecasts, with base metals and coal proving the winners and precious metals also receiving a leg up.

The broker's gold price assumption rises an average of 9% in FY22, and a 1% increase in 2023. 

But the broker downgrades Regis Resources to Neutral from Outperform in light of recent share price strength.

Macquarie's EPS forecasts rise sharply across the gold stocks, including Regis Resources. Target price rises to $2.40 from $2.20.

Target price is $2.40 Current Price is $2.14 Difference: $0.26
If RRL meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $2.27, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Morgan Stanley rates RRL as Downgrade to Equal-weight from Overweight (3) -

Morgan Stanley advocates selective gold exposure for investors given recent geopolitical concerns and a gold sector that has corrected significantly since an early 2021 peak.

Despite this, the broker downgrades its rating for Regis Resources to Equal-weight from Overweight as the stock looks expensive on some valuation multiples. Moreover, the Tropicana acquisition was considered expensive and there have been production hiccups at Duketon.

The target rises to $2.35 from $2.10. Industry view: Attractive.

Target price is $2.35 Current Price is $2.14 Difference: $0.21
If RRL meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $2.27, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.2

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

Macquarie rates S32 as Outperform (1) -

Macquarie raises EPS forecasts sharply for the major miners, including South32 ((S32)) (up 51% for FY22 and 95% for FY23) , after upgrading its commodities deck.

The broker favours BHP ((BHP)) and South32 over Fortescue Metals Group ((FMG)) and Rio Tinto ((RIO)).

Nickel forecasts rise 32% in the near term; aluminium forecasts rise 13% to 14% over 2022 to 2023; copper forecasts rise 7% to 16%, met coal prices rise 99% and 45%; iron ore price by 15% and 5% and gold by 9% and 1%.

Macquarie notes South32 experiences an increase in forecast free cash flow yield to 45% in FY22 and 34% in FY23, and spies upside to capital management and shareholder returns.

Outperform rating retained. Target price rises to $7 from $4.81.

Target price is $7.00 Current Price is $4.89 Difference: $2.11
If S32 meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $5.38, suggesting upside of 10.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

Citi rates SFR as Buy (1) -

Volatile gas pricing in Europe looks likely to impact costs at Sandfire Resources' recently acquired MATSA project in Spain, with Citi noting the project is 100% exposed to elevated spot pricing. 

While the company did flag a US$0.30 per pound processing cost increase at the first half result, two thirds of the increase due to power costs, Citi notes this equates to a US$25m annual cost impact. The broker extends impacts of higher costs into the second half of FY23.

The Buy rating and target price of $8.30 are retained.

Target price is $8.30 Current Price is $5.50 Difference: $2.8
If SFR meets the Citi target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $7.24, suggesting upside of 31.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.6

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

Citi rates TWE as Buy (1) -

Improvement in both on-premise and cellar door sales from Duckhorn Vineyards in the January quarter despite continuing covid disruptions could suggest Treasury Wine Estates may exceed Citi's forecast for second half trading to be similar to first half results.

The broker noted on-premise sales account for 9% of the company's net service revenue, and better than expected recovery could present a tailwind for earnings margins. 

The Buy rating and target price of $13.78 are retained. 

Target price is $13.78 Current Price is $11.54 Difference: $2.24
If TWE meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $13.34, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

UBS rates TWE as Buy (1) -

An on-premise improvement revealed in 2Q results for US-peer The Duckhorn Portfolio supports UBS's estimate for margin expansion by Treasury Wine Estates in the Americas.

Covid had previously constrained these higher earnings margin channels which are now reopening, explains the analyst.

In addition, the overseas peer has been accelerating price rises, which the broker also sees as a positive for the Treasury Wine Estates' Americas division. The Buy rating and $13.50 target are maintained.

Target price is $13.50 Current Price is $11.54 Difference: $1.96
If TWE meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $13.34, suggesting upside of 14.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

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

While risks have increased for Australian banks from the Russia/Ukraine crisis, Morgan Stanley believes this has already been captured in current trading multiples.

The broker feels the potential for higher funding costs is the largest risk and greatest source of uncertainty for Australian banks arising from the current environment. A 25bpt rise in term deposit rates relative to the cash rate is estimated to be a -3-4bpt drag on margins.

For Westpac, the Equal-Weight rating and $22 target are retained. Industry view: Attractive.

Target price is $22.00 Current Price is $22.67 Difference: minus $0.67 (current price is over target).
If WBC 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 $24.90, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.4

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