Australian Broker Call
September 08, 2016
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COMPANIES DISCUSSED IN THIS ISSUE
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Last Updated: 10:52 AM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Today's Upgrades and Downgrades
| APO - | APN OUTDOOR | Upgrade to Buy from Neutral | UBS |
| GPT - | GPT | Upgrade to Neutral from Underperform | Credit Suisse |
| ORE - | OROCOBRE | Upgrade to Buy from Hold | Deutsche Bank |
| TLS - | TELSTRA CORP | Downgrade to Sell from Neutral | Citi |
UBS rates APO as Upgrade to Buy from Neutral (1) -
UBS believes the market is implying in pricing the stock that the structural growth story is broken yet envisages a few reasons for earnings growth to return in the first half.
The company will cycle a period where only four new digital boards were constructed and additional earnings should be forthcoming from the Metrospace and iOM acquisitions.
UBS still finds room for the outdoor segment to grow its share of Australian media advertising spending, particularly against a backdrop of free-to-air TV audience declines. Rating is upgraded to Buy from Neutral and $5.50 target is maintained.
Target price is $5.50 Current Price is $4.90 Difference: $0.6
If APO meets the UBS target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $6.17, suggesting upside of 22.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
UBS forecasts a full year FY16 dividend of 18.00 cents and EPS of 30.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.1, implying annual growth of 15.8%. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 16.8. |
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 20.00 cents and EPS of 34.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.8, implying annual growth of 18.9%. Current consensus DPS estimate is 20.4, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates AWC as Neutral (3) -
Citi observes the share price has rallied now the AWAC JV agreement with Alcoa has been changed and removes some of the impediments to a takeover of Alumina Ltd.
The broker questions whether China is the most logical acquire of the stock and in turn whether it is cheaper for that country to build more alumina capacity or buy AWC.
While there are some advantages in the AWAC JV for China, the reality, Citi highlights, is that the stock has been a target ever since it was de-merged in 2002 from Western Mining, which was in response to an offer by Alcoa. Hence, a target can remain just that for an extended period of time.
Neutral rating retained. Price target unchanged at $1.30.
Target price is $1.30 Current Price is $1.43 Difference: minus $0.13 (current price is over target).
If AWC meets the Citi target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.39, suggesting downside of -1.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Citi forecasts a full year FY16 dividend of 6.68 cents and EPS of 3.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.1, implying annual growth of N/A. Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 34.3. |
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 4.77 cents and EPS of 3.55 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 5.5, implying annual growth of 34.1%. Current consensus DPS estimate is 6.8, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 25.6. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates COH as Underperform (5) -
Credit Suisse expects new products will drive a higher shift in share to cochlear implants. Modelling assumptions are upgraded to assume the company sustains high single digit unit sales growth. The total revenue contribution from processor upgrades is increased.
While the earnings growth profile is strong the broker considers the valuation is stretched and retains an Underperform rating. Target rises to $123.30 from $110.00.
Target price is $123.30 Current Price is $138.62 Difference: minus $15.32 (current price is over target).
If COH meets the Credit Suisse target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $118.46, suggesting downside of -14.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 272.00 cents and EPS of 387.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 384.0, implying annual growth of 16.2%. Current consensus DPS estimate is 270.8, implying a prospective dividend yield of 2.0%. Current consensus EPS estimate suggests the PER is 35.9. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 309.00 cents and EPS of 437.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 438.8, implying annual growth of 14.3%. Current consensus DPS estimate is 309.0, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 31.4. |
Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates EHE as Neutral (3) -
The broker has reviewed its sector forecasts in light of government clarification of additional service charges in aged care. Each of Estia Health, Japara Healthcare and Regis Healthcare suggested at their results the impact would be mitigated by capital refurbishment fees but the government has suggested otherwise.
The offset would have to be increased room fees which the broker does not see as being sufficient to avoid lower earnings. The broker has cut earnings forecasts accordingly.
Neutral retained on Estia, target falls to $4.00 from $5.50.
Target price is $4.00 Current Price is $3.22 Difference: $0.78
If EHE meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $5.26, suggesting upside of 69.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 28.40 cents and EPS of 29.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.3, implying annual growth of 100.7%. Current consensus DPS estimate is 30.0, implying a prospective dividend yield of 9.7%. Current consensus EPS estimate suggests the PER is 10.2. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 27.80 cents and EPS of 28.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.8, implying annual growth of -1.7%. Current consensus DPS estimate is 28.9, implying a prospective dividend yield of 9.3%. Current consensus EPS estimate suggests the PER is 10.4. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates FXJ as Outperform (1) -
Fairfax will receive $55m in cash and a 41% shareholding, vending its NZ assets into the enlarged NZME. Credit Suisse believes the company is exposed to upside from emerged group synergies and this could drive share price upside.
The transaction reduces Fairfax's publishing exposure, improves the balance sheet and realises value from an asset to which the market attaches minimal valuation. Outperform rating and $1.10 target retained.
Target price is $1.10 Current Price is $0.98 Difference: $0.125
If FXJ meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $1.06, suggesting upside of 9.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.66 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.2, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 15.6. |
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 4.00 cents and EPS of 6.34 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.4, implying annual growth of 3.2%. Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgan Stanley rates FXJ as Overweight (1) -
The merger agreement between the company's New Zealand assets and NZME has now been signed. Morgan Stanley views the news as an incremental positive.
The broker envisages a re-rating of Fairfax shares is possible, if the company is able to reduce its exposure to print and increase the focus on digital and Domain.
Overweight rating and Attractive industry view retained. Target is $1.20.
Target price is $1.20 Current Price is $0.98 Difference: $0.225
If FXJ meets the Morgan Stanley target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $1.06, suggesting upside of 9.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgan Stanley forecasts a full year FY17 dividend of 3.30 cents and EPS of 6.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.2, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 15.6. |
Forecast for FY18:
Morgan Stanley forecasts a full year FY18 dividend of 3.80 cents and EPS of 7.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.4, implying annual growth of 3.2%. Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates FXJ as Neutral (3) -
The merger agreement with NZME has been signed with Fairfax vending its NZ operations into NZME. Fairfax will receive NZ$55m in cash, and scrip equivalent to 41% of the post-merger NZME shares outstanding.
UBS observes the deal crystalises the NZ asset value in line with its estimates. The bulk of the stock's value is ascribed to Domain and the broker is positive on the growth outlook.
UBS retains a Neutral rating and $1.00 target.
Target price is $1.00 Current Price is $0.98 Difference: $0.025
If FXJ meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $1.06, suggesting upside of 9.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 4.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.2, implying annual growth of N/A. Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 4.0%. Current consensus EPS estimate suggests the PER is 15.6. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 4.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.4, implying annual growth of 3.2%. Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 15.1. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Credit Suisse rates GPT as Upgrade to Neutral from Underperform (3) -
Post the results, Credit Suisse upgrades to Neutral from Underperform given the stock's recent underperformance. Target lifts to $5.21 from $5.00.
Target price is $5.21 Current Price is $5.01 Difference: $0.2
If GPT meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $5.07, suggesting upside of 1.6% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Credit Suisse forecasts a full year FY16 dividend of 24.00 cents and EPS of 30.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.9, implying annual growth of -38.6%. Current consensus DPS estimate is 23.4, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 17.3. |
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 25.00 cents and EPS of 31.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 1.7%. Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 17.0. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates IAG as Neutral (3) -
The broker has reviewed Personal Lines by channel across the general insurance industry. IAG and Suncorp are overweight the largest channels, the broker notes, which also happen to be the ones under the most competitive pressure.
Due to valuation and lesser exposure to Commercial and NZ, the broker prefers Suncorp over IAG.
Neutral and $5.80 target retained for IAG.
Target price is $5.80 Current Price is $5.42 Difference: $0.38
If IAG meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $5.56, suggesting upside of 3.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 30.00 cents and EPS of 34.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.3, implying annual growth of 33.0%. Current consensus DPS estimate is 26.5, implying a prospective dividend yield of 4.9%. Current consensus EPS estimate suggests the PER is 15.6. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 29.00 cents and EPS of 33.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.3, implying annual growth of 2.9%. Current consensus DPS estimate is 27.5, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 15.2. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates JHC as Neutral (3) -
The broker has reviewed its sector forecasts in light of government clarification of additional service charges in aged care. Each of Estia Health, Japara Healthcare and Regis Healthcare suggested at their results the impact would be mitigated by capital refurbishment fees but the government has suggested otherwise.
The offset would have to be increased room fees which the broker does not see as being sufficient to avoid lower earnings. The broker has cut earnings forecasts accordingly.
Neutral retained on Japara, target falls to $2.10 from $2.85.
Target price is $2.10 Current Price is $1.94 Difference: $0.165
If JHC meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $2.55, suggesting upside of 34.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 EPS of 12.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.0, implying annual growth of 12.7%. Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 6.8%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY18:
Macquarie forecasts a full year FY18 EPS of 11.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.2, implying annual growth of 1.5%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Morgans rates JHC as Add (1) -
The Department of Health has stated that refurbishment fees and asset replacement contributions in residential aged care are not supported by the legislation where the fee does not provide a direct benefit to the individual.
Morgans observes the comments have created confusion among listed aged care operators and seems to be a result of poor communication between the government and operators.
The broker remains positive on the medium term outlook for operators and believes the underlying demand is strong and a sensible compromise will be reached.
Morgans maintains an Add rating but lowers the target to $2.47 from $2.77, noting significant upside exists and there is an attractive yield on offer.
Target price is $2.47 Current Price is $1.94 Difference: $0.535
If JHC meets the Morgans target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $2.55, suggesting upside of 34.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 12.00 cents and EPS of 13.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.0, implying annual growth of 12.7%. Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 6.8%. Current consensus EPS estimate suggests the PER is 14.7. |
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 13.00 cents and EPS of 14.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.2, implying annual growth of 1.5%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 7.0%. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates JHX as Buy (1) -
After its survey of US builders Deutsche Bank is surprised it revealed that only 9% of respondents considered price to be the determining factor for choice of siding.
The broker notes ease of installation and appearance comprised more than 60% of considerations. Despite the relatively high share of fibre cement in the southern siding market the broker observes the greatest opportunity for James Hardie remains in this region.
The broker factors in a 3% increase to fibre cement prices in FY18 for James Hardie. Buy retained. Target rises to $22.43 from $21.60.
Target price is $22.43 Current Price is $21.15 Difference: $1.28
If JHX meets the Deutsche Bank target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $21.84, suggesting upside of 4.0% (ex-dividends)
The company's fiscal year ends in March.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 62.71 cents and EPS of 85.89 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 81.1, implying annual growth of N/A. Current consensus DPS estimate is 57.0, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 25.9. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 70.89 cents and EPS of 109.07 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 99.2, implying annual growth of 22.3%. Current consensus DPS estimate is 65.0, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 21.2. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates NXT as Buy (1) -
The announcement of plans to build the second Sydney facility and the major contract win for S1 underscores the strong demand prevailing for data centre capacity, Deutsche Bank notes.
Deutsche Bank believes the risk profile increases because of the significant amount of development being undertaken over FY17/18 but this is offset by the company's strong record of execution.
The broker retains a Buy rating and raises the target to $4.60 from $4.30.
Target price is $4.60 Current Price is $4.10 Difference: $0.5
If NXT meets the Deutsche Bank target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $4.41, suggesting upside of 0.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 0.00 cents and EPS of 7.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 5.3, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 82.8. |
Forecast for FY18:
Deutsche Bank forecasts a full year FY18 dividend of 0.00 cents and EPS of 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 5.5, implying annual growth of 3.8%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 79.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Deutsche Bank rates ORE as Upgrade to Buy from Hold (1) -
After attending an analyst's briefing Deutsche Bank now expects short-term pricing momentum will continue in lithium, with the demand outlook remaining very strong.
The broker's rating is upgraded to Buy from Hold on valuation. Target unchanged at $4.40.
Target price is $4.40 Current Price is $4.13 Difference: $0.27
If ORE meets the Deutsche Bank target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $4.32, suggesting upside of 4.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY16:
Deutsche Bank forecasts a full year FY16 dividend of 0.00 cents and EPS of minus 47.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -21.1, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A. |
Forecast for FY17:
Deutsche Bank forecasts a full year FY17 dividend of 0.00 cents and EPS of minus 11.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.5, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 23.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates REG as Neutral (3) -
The broker has reviewed its sector forecasts in light of government clarification of additional service charges in aged care. Each of Estia Health, Japara Healthcare and Regis Healthcare suggested at their results the impact would be mitigated by capital refurbishment fees but the government has suggested otherwise.
The offset would have to be increased room fees which the broker does not see as being sufficient to avoid lower earnings. The broker has cut earnings forecasts accordingly.
Neutral retained on Regis, target falls to $4.15 from $5.20.
Target price is $4.15 Current Price is $3.88 Difference: $0.27
If REG meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $5.27, suggesting upside of 38.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 20.30 cents and EPS of 20.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 20.5, implying annual growth of 33.6%. Current consensus DPS estimate is 20.2, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 18.5. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 20.70 cents and EPS of 20.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.6, implying annual growth of 10.2%. Current consensus DPS estimate is 22.6, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 16.8. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates RMD as Buy (1) -
UBS notes results from the trial for Chronic Obstructive Pulmonary Disorder found that at-home, non-invasive ventilation used in conjunction with oxygen reduced the need for hospitalisation and the chance of death by a factor of 4.3 months versus 1.4 months for oxygen alone.
COPD remains a leading cause of hospital re-admission and death. The broker also acknowledges it was wrong about expecting N20 and F20 pricing to fall. It appears unlikely the company will release its new mask at a lower price.
The mask opportunity has precedent as an inflection point for gross margin and the broker observes there could be upside earnings risk as its forecast only consider modest upside in 2017.
Buy rating and US$77.60 target retained.
Current Price is $8.84. Target price not assessed.
Current consensus price target is $9.92, suggesting upside of 12.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
UBS forecasts a full year FY17 dividend of 19.22 cents and EPS of 37.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 37.1, implying annual growth of N/A. Current consensus DPS estimate is 17.1, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 23.7. |
Forecast for FY18:
UBS forecasts a full year FY18 dividend of 20.97 cents and EPS of 42.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 39.1, implying annual growth of 5.4%. Current consensus DPS estimate is 19.8, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 22.5. |
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
Citi rates SGM as Buy (1) -
Citi's Buy rating is effectively based upon the fact that consensus forecasts seem too low. The analysts are on their own assessment positioned some 20% above consensus for FY17.
This suggests the market will be forced to upscale forecasts, suggest the analysts. Price target $11.20 (was $10.70).
Target price is $11.20 Current Price is $9.14 Difference: $2.06
If SGM meets the Citi target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $9.55, suggesting upside of 4.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 32.00 cents and EPS of 59.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 49.0, implying annual growth of -8.7%. Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 18.7. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 40.00 cents and EPS of 75.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.4, implying annual growth of 29.4%. Current consensus DPS estimate is 32.9, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 14.4. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates STO as Outperform (1) -
Cost cuts to date and a rebound in the oil price have benefitted Santos, the broker notes, but not by enough to offset debt repayment obligations. The broker suggests more measures are required to shore up the balance sheet.
A three-pronged attack of further cost cuts, more substantial asset sales and a capital raising would do the trick, and given the broker has faith in new management's resolve, Outperform retained. Target rises to $5.60 from $5.50.
Target price is $5.60 Current Price is $4.20 Difference: $1.4
If STO meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $5.22, suggesting upside of 24.7% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Macquarie forecasts a full year FY16 dividend of 0.00 cents and EPS of minus 4.77 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 2.7, implying annual growth of N/A. Current consensus DPS estimate is 1.3, implying a prospective dividend yield of 0.3%. Current consensus EPS estimate suggests the PER is 155.0. |
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 5.32 cents and EPS of 13.36 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.0, implying annual growth of 714.8%. Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 19.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SUN as Outperform (1) -
The broker has reviewed Personal Lines by channel across the general insurance industry. IAG and Suncorp are overweight the largest channels, the broker notes, which also happen to be the ones under the most competitive pressure.
Due to valuation and lesser exposure to Commercial and NZ, the broker prefers Suncorp over IAG.
Outperform and $13.49 target retained for Suncorp.
Target price is $13.49 Current Price is $12.76 Difference: $0.73
If SUN meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $13.34, suggesting upside of 6.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 77.00 cents and EPS of 96.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 94.8, implying annual growth of 16.4%. Current consensus DPS estimate is 75.8, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 13.2. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 77.00 cents and EPS of 95.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 97.5, implying annual growth of 2.8%. Current consensus DPS estimate is 78.3, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 12.9. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates TLS as Downgrade to Sell from Neutral (5) -
Citi analysts have looked into the future of telecom services in Australia beyond the NBN. Their expectation is that by 2022 Telstra will be forced to cut its dividend to 21c from an until then stable 31c annual payout.
It's not a prospect that looks particularly enticing and the analysts have decided to cut their price target to $4.50 from $5.72. Their rating moves down one notch too, to Sell from Neutral.
Note: Citi has dressed up today's "initiation" as a fesh start, signalling active coverage had been interrupted since our last update available from mid Ferbruary. Estimates are lower than they were in February.
Target price is $4.50 Current Price is $5.14 Difference: minus $0.64 (current price is over target).
If TLS meets the Citi target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.21, suggesting upside of 1.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 31.00 cents and EPS of 36.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.4, implying annual growth of -27.4%. Current consensus DPS estimate is 31.5, implying a prospective dividend yield of 6.2%. Current consensus EPS estimate suggests the PER is 14.9. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 31.00 cents and EPS of 39.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.9, implying annual growth of 4.4%. Current consensus DPS estimate is 32.3, implying a prospective dividend yield of 6.3%. Current consensus EPS estimate suggests the PER is 14.2. |
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates TPM as Initiation of coverage with Buy rating (1) -
Citi analysts have looked into the future of telecom services in Australia beyond the NBN. It is their view TPG Telecom is best positioned to deal with changing market dynamics once the NBN levels the competitive landscape for broadband connection.
It is the analysts' view, the negative impact on the Consumer division should be more than offset by iiNet synergies and growth in Corporate. Buy. Price target $14.50.
Note: today's update is being presented as a fresh "initiation" which can be justified as we hadn't seen an update on the company from Citi since October last year.
Target price is $14.50 Current Price is $12.11 Difference: $2.39
If TPM meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $11.54, suggesting downside of -4.0% (ex-dividends)
The company's fiscal year ends in July.
Forecast for FY16:
Citi forecasts a full year FY16 dividend of 14.50 cents and EPS of 42.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.5, implying annual growth of 50.7%. Current consensus DPS estimate is 14.9, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 28.3. |
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 15.60 cents and EPS of 49.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 48.5, implying annual growth of 14.1%. Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 24.8. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates VOC as Initiation of coverage with Neutral rating (3) -
Citi analysts have looked into the future of telecom services in Australia beyond the NBN. Their Neutral rating on Vocus is related to their risk assessment.
It is the analysts' view that integrating four large, separate businesses carries above average risk. They would like to see more evidence of tangible achievement and progress, before turning more comfortable/positive.
As further evidence of their caution, the analysts' EBITDA estimates are 6% and 10% below consensus in FY17 & FY18. Citi analysts acknowledge management's admirable track record, but they warn investors should not underestimate the task at hand.
Target price is $8.00 Current Price is $7.52 Difference: $0.48
If VOC meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $9.14, suggesting upside of 22.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 20.00 cents and EPS of 39.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.5, implying annual growth of 114.7%. Current consensus DPS estimate is 20.2, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.4. |
Forecast for FY18:
Citi forecasts a full year FY18 dividend of 23.00 cents and EPS of 43.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.9, implying annual growth of 5.9%. Current consensus DPS estimate is 21.5, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 17.4. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates WES as Outperform (1) -
The hard coking coal price has shot up over 100% in 2016 and were the broker to apply spot prices to forecasts for Wesfarmers' coal division, a 12% earnings upgrade would follow.
However the broker does not see such prices as being sustained so until there is some stability, the broker will stick to its forecasts for now. Outperform and $44.01 target retained on the basis of the rest of the business.
Target price is $44.01 Current Price is $43.04 Difference: $0.97
If WES meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $41.88, suggesting downside of -3.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 210.00 cents and EPS of 232.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 234.9, implying annual growth of 548.9%. Current consensus DPS estimate is 199.9, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 18.4. |
Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 240.00 cents and EPS of 266.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 255.9, implying annual growth of 8.9%. Current consensus DPS estimate is 215.1, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 16.9. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Citi rates WPL as Buy (1) -
The acquisition of a 25% stake in Scarborough field and 50% of Thebe/Jupiter is the opportunity Citi foresees for Woodside to encourage the JV partners to explore the back fill of North West Shelf as an option.
Scarborough needs a final investment decision by 2020 or facing losing the resource.
Citi maintains a Buy rating and raises the target to $34.20 from $34.15. The analysts see this latest deal as yet more evidence Woodside is busy shedding its ex-growth label.
Target price is $34.20 Current Price is $28.46 Difference: $5.74
If WPL meets the Citi target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $29.96, suggesting upside of 7.0% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY16:
Citi forecasts a full year FY16 dividend of 128.15 cents and EPS of 164.96 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 134.7, implying annual growth of N/A. Current consensus DPS estimate is 106.0, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 20.8. |
Forecast for FY17:
Citi forecasts a full year FY17 dividend of 136.33 cents and EPS of 171.23 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 156.6, implying annual growth of 16.3%. Current consensus DPS estimate is 125.6, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 17.9. |
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
Summaries
| APO - | APN OUTDOOR | Upgrade to Buy from Neutral - UBS | Overnight Price $4.90 |
| AWC - | ALUMINA | Neutral - Citi | Overnight Price $1.43 |
| COH - | COCHLEAR | Underperform - Credit Suisse | Overnight Price $138.62 |
| EHE - | ESTIA HEALTH | Neutral - Macquarie | Overnight Price $3.22 |
| FXJ - | FAIRFAX MEDIA | Outperform - Credit Suisse | Overnight Price $0.98 |
| Overweight - Morgan Stanley | Overnight Price $0.98 | ||
| Neutral - UBS | Overnight Price $0.98 | ||
| GPT - | GPT | Upgrade to Neutral from Underperform - Credit Suisse | Overnight Price $5.01 |
| IAG - | INSURANCE AUSTRALIA | Neutral - Macquarie | Overnight Price $5.42 |
| JHC - | JAPARA HEALTHCARE | Neutral - Macquarie | Overnight Price $1.94 |
| Add - Morgans | Overnight Price $1.94 | ||
| JHX - | JAMES HARDIE | Buy - Deutsche Bank | Overnight Price $21.15 |
| NXT - | NEXTDC | Buy - Deutsche Bank | Overnight Price $4.10 |
| ORE - | OROCOBRE | Upgrade to Buy from Hold - Deutsche Bank | Overnight Price $4.13 |
| REG - | REGIS HEALTHCARE | Neutral - Macquarie | Overnight Price $3.88 |
| RMD - | RESMED | Buy - UBS | Overnight Price $8.84 |
| SGM - | SIMS METAL MANAGEMENT | Buy - Citi | Overnight Price $9.14 |
| STO - | SANTOS | Outperform - Macquarie | Overnight Price $4.20 |
| SUN - | SUNCORP | Outperform - Macquarie | Overnight Price $12.76 |
| TLS - | TELSTRA CORP | Downgrade to Sell from Neutral - Citi | Overnight Price $5.14 |
| TPM - | TPG TELECOM | Initiation of coverage with Buy rating - Citi | Overnight Price $12.11 |
| VOC - | VOCUS COMMUNICATIONS | Initiation of coverage with Neutral rating - Citi | Overnight Price $7.52 |
| WES - | WESFARMERS | Outperform - Macquarie | Overnight Price $43.04 |
| WPL - | WOODSIDE PETROLEUM | Buy - Citi | Overnight Price $28.46 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 14 |
| 3. Hold | 8 |
| 5. Sell | 2 |
Thursday 08 September 2016
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the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe
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This document is provided for informational purposes only. It does not
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base their work on information believed to be reliable and accurate, though
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