Australian Broker Call

Citi rates ALG as Buy (1) -

Citi suspects the performance of Main Event has slowed slightly although sales remain strong and should more than offset cost pressures.

Significantly, sales growth should mean the net debt position improves and this may affect how much cash the company can receive, should RedBird exercise its option for an additional 27% stake.

Citi maintains a Buy rating and $1.80 target.

Target price is $1.80 Current Price is $1.49 Difference: $0.31
If ALG meets the Citi target it will return approximately 21% (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 BHP as No Rating (-1) -

Morgan Stanley notes the presentation on Jansen, with stage 1 having been approved, focused on the accretive potential of stages 2-4. The company expects these stages will have significantly lower capital intensity and this will translate into superior returns.

Moreover, future phases are largely de-risked because of the shaft capacity that is being put in place for the current stage. The broker notes the company is highly confident in its firmed up budget of US$5.7bn for the Jansen stage 1.

The broker aligns its base case with the budget and expects spending is likely to peak in 2025/26. Morgan Stanley does not have a rating or target at present. Industry view is Attractive.

Current Price is $40.26. Target price not assessed.

Current consensus price target is $47.23, suggesting upside of 16.3% (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: 0.3

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

Macquarie rates BPT as Neutral (3) -

Macquarie assesses the final investment decision on Moomba CCS is due shortly and, while Beach Energy has made good progress, real emission reductions will be harder to achieve.

That said, the broker considers the project a compelling opportunity and as Moomba is expanded the company may be able to apply offsets to emissions from other assets.

Moreover, when Otway and Waitsia are delivered the business will have a strong, resilient cash flow. Neutral maintained. Target is raised to $1.12 from $1.10.

Target price is $1.12 Current Price is $1.07 Difference: $0.05
If BPT meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.42, suggesting upside of 28.6% (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

Credit Suisse rates BXB as Outperform (1) -

In the second day of the investor briefing management has signalled the trial of 5,000 GPS-tagged pallets in Ireland achieved a tenfold return on the investment. Brambles is using GPS-tagged pallets to identify where the losses and unauthorised usage occur.

The company is trialling a plastic pallet conversion with Costco, which has 10% of the Brambles' pallet business in the US.

After the conclusion of the presentations, Credit Suisse downgrades FY22 and FY23 EBIT forecast by -5-6%. The broker retains an Outperform rating and reduces the target to $13.25 from $14.15.

Target price is $13.25 Current Price is $11.00 Difference: $2.25
If BXB meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $12.40, suggesting upside of 12.0% (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: 0.5

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

Morgans rates BXB as Hold (3) -

The Brambles investor briefing has focused on transformation that will require significant investment in both operating and capital expenditure. FY22 guidance is weaker than Morgans expected, with the company targeting constant FX revenue growth of 5-6%.

There will be US$50m spent in FY22 on the transformation, to drive a step change in earnings growth from FY23 onwards.

Morgans finds the business defensive and the balance sheet healthy yet highlights the uncertainty around the Costco plastic pallet trials and maintains a Hold rating. Target is reduced to $11.04 from $12.23.

Target price is $11.04 Current Price is $11.00 Difference: $0.04
If BXB meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $12.40, suggesting upside of 12.0% (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: 0.5

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

Morgan Stanley rates NEA as Overweight (1) -

Morgan Stanley highlights Nearmap as one of the stocks where it has become more bullish after the reporting season. Gross margin lifted to record levels in both geographies as new business accelerated. Sales efficiency has also improved with churn down to 7% from 10%.

The broker notes the company typically provides a trading update and guidance at its AGM in November and a clear message regarding FY23 operating leverage would be well received. Morgan Stanley retains an Overweight rating, $3.20 target and In-Line industry view.

Target price is $3.20 Current Price is $1.92 Difference: $1.28
If NEA meets the Morgan Stanley target it will return approximately 67% (excluding dividends, fees and charges).

Current consensus price target is $2.58, suggesting upside of 35.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Credit Suisse rates OSH as Neutral (3) -

Credit Suisse now considers the valuation of Oil Search tied to Santos ((STO)), with the latter now likely to emerge with growth across four geographical locations, namely PNG, Northern Territory, Western Australia and CCS/Alaska along with synergy upside.

The broker envisages, while there is upside to valuation, much of the growth is priced in and there are risks on the political front, particularly in PNG. The broker retains a Neutral rating and raises the target to $4.38 from $3.89.

Target price is $4.38 Current Price is $3.82 Difference: $0.56
If OSH meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $4.60, suggesting upside of 17.9% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

This company reports in USD. 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

Macquarie rates RHC as Outperform (1) -

Macquarie reviews the valuation of Ramsay Health Care and finds hidden value. The broker highlights the Australian property portfolio as well as upside to the operations which it believes are not reflected in the current share price.

Medium-term, the outlook is favourable with the deployment of capital into growth initiatives expected to support an improved market position over the longer term. Outperform rating and $75.50 target maintained.

Target price is $75.50 Current Price is $68.15 Difference: $7.35
If RHC meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $69.54, suggesting upside of 0.2% (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

Citi rates S32 as Buy (1) -

As also reported yesterday, commodity analysts at Citi have responded to rapidly changing market dynamics for aluminium by raising their price forecasts.

Citi's aluminium price forecasts are now for an average of US$2,475/t in 2021 and US$3,010/t in 2022, from respectively US$2,450/t and US$2,765/t prior.

Also noteworthy, the analysts believe spot aluminium prices can touch US$2,900/t in 0-3 month and US$3,100/t in 6-12 months as structural supply constraints spur on traders and speculators.

On revised forecasts, South32 remains a Buy while the price target moves to $3.80 from $3.50.

Target price is $3.80 Current Price is $3.37 Difference: $0.43
If S32 meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).

Current consensus price target is $3.66, suggesting upside of 4.2% (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

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

Silver Lake Resources has posted a strong 18% increase in reserves albeit from lower grade Mount Monger. Nevertheless, Morgan Stanley expects FY22 will present more opportunity to extend resources and reserves at Deflector, which is higher grade.

Equal-weight rating retained. Industry view: Attractive. Target is $1.75.

Target price is $1.75 Current Price is $1.40 Difference: $0.35
If SLR meets the Morgan Stanley target it will return approximately 25% (excluding dividends, fees and charges).

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

Credit Suisse rates STO as Neutral (3) -

Credit Suisse believes Santos will have a higher-quality asset base after its merger with Oil Search and ample upside for synergies. The company could also be differentiated by LNG and its weighting to Asia-Pacific compared with its global peers.

The main catalysts are more detail on the progress of Papua LNG, exploration results in Northern Territory, and any implications from the possible carve-out of infrastructure. Credit Suisse retains a Neutral rating and reduces the target to $6.98 from $7.08.

Target price is $6.98 Current Price is $6.26 Difference: $0.72
If STO meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $8.01, suggesting upside of 25.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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 STX as Outperform (1) -

Strike Energy has signed an MOU with Infinite Blue and ATCO to secure additional hydrogen for Project Haber urea. Macquarie observes the company is pursuing a net zero plan that will enhance its ESG profile and reduce dependence on imported urea.

Strike Energy requires 141,000tpa of hydrogen to run its urea plant in the Perth Basin and initially this will largely be sourced from Greater Erregulla natural gas feedstock.

Over time, as green hydrogen becomes available at lower prices from operators nearby, the company should be able to increase its green hydrogen ratio to 70% and Project Haber would become one of the largest industrial consumers of green hydrogen in Australia.

Macquarie retains an Outperform rating and $0.60 target.

Target price is $0.60 Current Price is $0.30 Difference: $0.3
If STX meets the Macquarie target it will return approximately 100% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY21:

Forecast for FY22:

Market Sentiment: 1.0

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

Credit Suisse rates WPL as Outperform (1) -

Credit Suisse believes Woodside Petroleum is likely to emerge with a fully funded growth profile after the merger with BHP Group's ((BHP)) petroleum division. This could mean the business attracts more investors into Australia as a viable alternative energy exposure to Santos ((STO)).

The primary driver of the merger is also the de-risking of Scarborough. Credit Suisse continues to envisage value in Woodside Petroleum and maintains an Outperform rating, reducing the target to $27.65 from $27.95.

Target price is $27.65 Current Price is $20.53 Difference: $7.12
If WPL meets the Credit Suisse target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $25.91, suggesting upside of 23.0% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY21:

Forecast for FY22:

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