Australian Broker Call

Bell Potter rates AAC as Buy (1) -

There has been sharp upward movement in cattle market indicators since Australian Agricultural Co reported on its first half. The Eastern States Young Cattle Indicator (EYCI) suggests prices have rallied around 87% since the end of the first half.

This rapid increase has led Bell Potter to review its average live price assumption over FY24-26, noting there is historically a 79% correlation between Australian Agricultural Co's received live cattle price and ECYI values. 

Northern grain pricing has also declined -14-17% since the first half result, and should benefit Australian Agricultural Co's feed costs.

The Buy rating is retained and the target price increases to $2.00 from $1.90.

Target price is $2.00 Current Price is $1.41 Difference: $0.59
If AAC meets the Bell Potter target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates AMC as Neutral (3) -

On Citi's assessment, Amcor's Q2 showed a larger-than-forecast decline in volumes, which weighed on the top line while net profit got some help from taxes and reduced expenses, and thus fell in line with expectations.

The broker does note management has stuck with FY24 guidance.

Neutral. Target $14.

Target price is $14.00 Current Price is $14.52 Difference: minus $0.52 (current price is over target).
If AMC meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.41, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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 AMC as Neutral (3) -

Amcor posted first half earnings per share of US31.3c versus Macquarie's US30.9c. Cost-outs helped to shore up weaker volumes, the broker notes.

Dec Q volumes fell a weaker than expected -12% year on year following -8% in the Sep Q. Macquarie estimates month of December volumes fell by -14%, exacerbated by end of year destock.

Amcor believes it has now moved past destocking in protein, coffee & confectionery categories but is seeing ongoing destocking in healthcare and North American beverages. More broadly, finished packaging demand remains weak.

The broker needs to see delivery of sequential volume recovery through the second half. Neutral retained. Target rises to $14.90 from $14.80.

Target price is $14.90 Current Price is $14.52 Difference: $0.38
If AMC meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $15.41, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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 AMC as Equal-weight (3) -

Following 1H results for Amcor, Morgan Stanley feels attaining the top-half of mangement's unchanged guidance will prove challenging.

Revenue and earnings (EBIT) missed the broker's expectation, while profit was in line due to a -23% fall in interest expense compared to the previous corresponding period.

Destocking accelerated in Q2 and demand remained soft, in the analysts' view.

Equal-Weight rating and $14.50 target price. Industry view: In-line.

Target price is $14.50 Current Price is $14.52 Difference: minus $0.02 (current price is over target).
If AMC meets the Morgan Stanley target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $15.41, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Morgans rates AMC as Add (1) -

Commenting after Amcor's 1H result, Morgans believes the earnings growth profile will gather momentum into Q4, after ongoing weak demand and customer de-stocking in Q3. Management expects de-stocking in global healthcare and North American beverages.

Underlying EPS was broadly in line with the broker's forecast in the 1H, while underlying earnings (EBIT) were a miss. Cost-out performance was considered strong though 2Q volumes were around -2% weaker than management expected.

Management reaffirmed FY24 guidance for EPS between US67-71cps and underlying free cash flow in the range of US$850-950m.

The Add rating is maintained and the target rises to $$15.65 from $15.20.

Target price is $15.65 Current Price is $14.52 Difference: $1.13
If AMC meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $15.41, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Ord Minnett rates AMC as Accumulate (2) -

Ord Minnett increases its target price for Amcor to $17.80 to reflect the time value of money.

Amcor's December first-half earnings (EBIT) missed Ord Minnett's estimates by -6% due to a -9% decline in volume due to customer inventory destocking as interest rates rose, pressuring households.

The broker expects that once this process is finalised, Amcor's performance will slowly rise thanks to single-digit organic sales growth, higher-margin products and reinvestment of free cash flow into emerging markets.

A 13c dividend was declared and the company's $70m buyback is underway. Accumulate rating retained.

Target price is $17.80 Current Price is $14.52 Difference: $3.28
If AMC meets the Ord Minnett target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $15.41, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

UBS rates AMC as Neutral (3) -

Despite soft consumer demand and ongoing destocking driving a slight first half group earnings miss from Amcor, relative to UBS's forecasts, the company reported earnings per share 2% ahead of the broker.

Volumes in the half did decline -9% year-on-year, but solid cost control from the company offset the weaker volumes. UBS notes more than US$200m in costs were removed in response to the fall in demand.

Full year guidance for earnings of US61-71 cents per share was retained.

The Neutral rating is retained and the target price increases to $15.60 from $15.40.

Target price is $15.60 Current Price is $14.52 Difference: $1.08
If AMC meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $15.41, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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

Ord Minnett rates AMI as Speculative Buy (1) -

Aurelia Metals' December-quarter result fell shy of Ord Minnett's forecasts due to delays (which affected grades) at Peak. Federation was in line.

The company closes the quarter with $109m in cash and $160m in liquidity.

The broker appreciates Aurelia Metals' strong balance sheet believing it provides plenty of flexibility to bring Federation on line and deliver on Cobar opportunities.

Speculative Buy rating retained. Target price rises to 21c from 20c.

Target price is $0.21 Current Price is $0.11 Difference: $0.1
If AMI meets the Ord Minnett target it will return approximately 91% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Morgan Stanley rates AUB as Overweight (1) -

ASX-listed insurance brokers are set to grow earnings, in Morgan Stanley's opinion, despite some moderation in commercial pricing. It's felt they offer strong operating leverage with no balance sheet risk and capital-light business models.

The broker prefers AUB Group in the space, due to potential for margin upside over the medium-term, and material upside earnings risk should management execute upon FY25 targets.

Morgan Stanley retains an Overweight rating and raises the target price to $38.30 from $37.55. Industry view is In-Line.

Target price is $38.30 Current Price is $30.83 Difference: $7.47
If AUB meets the Morgan Stanley target it will return approximately 24% (excluding dividends, fees and charges).

Current consensus price target is $34.35, suggesting upside of 11.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates BLX as Buy (1) -

Despite indications of subdued hardware demand from the trading update by Metcash ((MTS)) this week, Citi still expects Beacon Lighting will deliver double-digit growth in trade in the 1H. The company's long-term growth prospects are also considered positive.

Beacon's trade offer is later-cycle than Metcash, explains the broker, and lately management has been investing more in trade with a focus on marketing and range.

The Buy rating and $2.65 target are maintained.

Target price is $2.65 Current Price is $2.38 Difference: $0.27
If BLX meets the Citi target it will return approximately 11% (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

Ord Minnett rates BWP as Hold (3) -

BWP Trust's December-half flat result appears to have met Ord Minnett's forecasts, the broker retaining its Hold rating and $3.60 target price.

CPI increases were offset by higher interest costs and the broker considered rent reviews to be favourable, but likely to be short-lived as rising vacancies hamper rental growth.

Distribution growth was steady for the fourth consecutive year and the broker doubts an increase will materialise for several years.

On the upside, the broker appreciates the trust's strong balance sheet, low gearing and "modestly undervalued" share price.

Target price is $3.60 Current Price is $3.49 Difference: $0.11
If BWP meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 1.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.8

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

Morgans rates CBL as No Rating (-1) -

Morgans is moving a number of early-stage-development companies, including Control Bionics, to a new 'Keeping Stock' format, enabling regular updates but no forecasts, target or rating.

The broker belives Control Bionics is now funded into 2024 following its recent $2.7m rights issue, and assesses solid revenue growth (despite NDIS delays) after reviewing 1H results.

Management expects a pick-up in 2H sales in the US after revealing flat 1H sales.

Current Price is $0.04. Target price not assessed.

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

Bell Potter rates CIP as Hold (3) -

Centuria Industrial REIT has managed a small beat to Bell Potter's funds from operations forecast for the first half, reporting a final 8.5 cents per share result. The company is now guiding to full year funds from operations of 17.2 cents per share, from a previous 17.0 cents.

For the broker, a key takeaway of the result was the evident top line growth, while like-for-like growth was up 6.0%, which is likely to continue in the strong domestic market.

The broker expects rent growth to taper ahead, but notes that will take some time to work through the portfolio's WALE.

The Hold rating is retained and the target price increases to $3.35 from $3.25.

Target price is $3.35 Current Price is $3.35 Difference: $0
If CIP meets the Bell Potter target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $3.43, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

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

As part of the 1H result release, management at Centuria Industrial REIT upgraded FY24 funds from operations (FFO) guidance to 17.2cpu from 17.0cpu (consensus 17.1cpu).

First half FFO of 8.5cpu beat Morgan Stanley's 8.2cpu forecast. The result was considered positive overall, and highlighted the reslience of the industrial market.

The broker explains upgraded guidance was driven by strong like-for-like growth of 6%, with leasing spreads coming in at an impressive 51%, compared to the 30% average in FY23.

Target $3.30. Equal-weight. Industry view: In-Line. 

Target price is $3.30 Current Price is $3.35 Difference: minus $0.05 (current price is over target).
If CIP meets the Morgan Stanley target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.43, suggesting upside of 2.2% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Ord Minnett rates CIP as Hold (3) -

Centuria Industrial REIT's flat December half funds from operations appears to have pleased Ord Minnett, the broker observing a 6% jump in like-for-like rental growth, which was offset by rising debt costs and asset sales.

The broker observes strong tenant demand in Sydney, Melbourne and Brisbane Industrial market and low vacancy rates, and management advised portfolio rents were roughly -30% below market rates, leaving a strong runway for rental growth in the medium term as leases renew; and that gearing is in the bottom half of the target range.

Ord Minnett expects higher debt costs to continue to weigh in the medium term given the company's development pipeline is likely to incur -$500m in capital expenditure over five years, putting covenants at risk without an equity raising or major asset sales.

Therefore the broker factors in a $300m equity raising into its valuation. Hold rating retained. Target price rises 6% to $3.30.

Target price is $3.30 Current Price is $3.35 Difference: minus $0.05 (current price is over target).
If CIP meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.43, suggesting upside of 2.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Citi rates CLW as Neutral (3) -

At first glance, Charter Hall Long WALE REIT's December-half earnings (EPS) nosed out consensus forecasts but fell -1.5% shy of Citi's forecast due to lower than expected net property income.

Management reiterated FY24 EPS and DPS guidance, a slight miss on both consensus and Citi's forecast.

Look-through gearing rose to 41.2% from 40.1% at June 30 and net tangible assets fell -9% in the half to $5.14.

Citi observes the company is now trading at a -27% discount to net assets, and that any asset sale announcements would likely be well received.

Neutral rating and $4 target price retained.

Target price is $4.00 Current Price is $3.75 Difference: $0.25
If CLW meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates CLW as Neutral (3) -

At first glance, Charter Hall Long WALE REIT's December-half result met UBS's forecast and management has retained guidance.

UBS turns its focus to the balance sheet observing gearing of 43% compares with its covenant of 50%.

Assuming asset sales of $500m are completed, the broker expects gearing to fall to 39%, giving the REIT wiggle room as cap-rates adjust back through 2024. This view was reinforced, says UBS, by support from lenders, which have extended $820m in debt.

Neutral rating and $4.10 target price retained for now.

Target price is $4.10 Current Price is $3.75 Difference: $0.35
If CLW meets the UBS target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.90, suggesting upside of 0.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgans rates CSR as Downgrade to Hold from Add (3) -

Settlement of Stage 3B at CSR's Horsley Park industrial estate has occurred a few months earlier than expected due to faster completion of development works resulting in lower site development costs, explains management.

Over the development's lifespan, Morgans notes CSR has achieved a 74% increase in the average sale rate.

This news suggests to Morgans the business could be delivering around 60% earnings (EBIT) margins at West Schofields and Badgerys Creek, when they are developed in coming years.

As the share price has rallied by around 18% since last-November, the broker lowers its rating to Hold from Add. The target rises to $6.90 from $6.75.

Target price is $6.90 Current Price is $6.53 Difference: $0.37
If CSR meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $6.14, suggesting downside of -6.8% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Bell Potter rates DXI as Sell (5) -

Despite being a slight miss to Bell Potter's forecasts, Dexus Industria REIT has benefitted from a positive share price reaction to its first half result, with funds from operations of 8.6 cents a beat to consensus expectations.

As per Bell Potter, the update showcased a strong headline result and the company left the period with a well positioned balance sheet. While the broker sees room for improvement, it would be to the detriment of earnings. Full year guidance was maintained.

The Sell rating is retained and the target price increases to $2.80 from $2.70.

Target price is $2.80 Current Price is $2.88 Difference: minus $0.08 (current price is over target).
If DXI meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.99, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Macquarie rates DXI as Outperform (1) -

Dexus Industria REIT posted a strong first half result with funds from operations 5% ahead of Macquarie, driven by higher net property income and lower expenses. FY24 FFO guidance is is reaffirmed.

The key positive from the result was a 10ppt increase in occupancy at Brisbane Technology Park to 95.7%. The broker estimates this is around a 2% tailwind to annualised FFO.

The REIT has re-stocked its development pipeline with the commencement of a $46m development at Moorebank, and remains attractive, Macquarie suggests, at 6% yield and -13% discount to NTA, with a strong balance sheet.

Target rises to $3.00 from $2.87, Outperform retained.

Target price is $3.00 Current Price is $2.88 Difference: $0.12
If DXI meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.99, suggesting upside of 3.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.3

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

Shaw and Partners rates GTK as Buy (1) -

Shaw and Partners considers Gentrack Group's -$12m investment in Australian technology company and energy retailer Amber Energy to be sensible.

The broker believes it will help Gentrack to integrate its customer care and billing solution with the latter's SmartShift technologies, which controls and automates household batteries, solar and electric vehicles to reduce energy bills.

The broker also observes Amber is growing fast and is relatively low risk, offering a good risk-reward equation.

Gentrack clarified it was not a venture capital investor nor a retailer and, given Amber was strongly outpacing the competition and not burning cash, the broker concludes that Gentrack's acquisition rationale is that Amber is likely to help it drive opportunity and stronger win rates for the core business.

Buy rating reiterated. Target price rises to $6.90 from $6.50 target.

Target price is $6.90 Current Price is $6.60 Difference: $0.3
If GTK meets the Shaw and Partners target it will return approximately 5% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in NZD. 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

Bell Potter rates LOV as Buy (1) -

It is Bell Potter's opinion that the Chinese market remains the biggest opportunity for Lovisa Holdings amid its ongoing global rollout, and following the opening of the brand's first retail space in the country in December.

The Chinese fashion jewellery market value is estimated at US$13bn, and the broker believes consumers in this market are looking for a trendy fashion jewellery brand.

With its US market blueprint, Bell Potter expects Lovisa Holdings can open 100 stores in mainland China in just 4-6 years, adding a potential $40-50m to group revenues.

The Buy rating is retained and the target price increases to $26.50 from $25.00.

Target price is $26.50 Current Price is $23.64 Difference: $2.86
If LOV meets the Bell Potter target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $23.24, suggesting downside of -6.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Citi rates MGR as Buy (1) -

At first glance, Mirvac Group's December-half profit and earnings (EPS) missed consensus and Citi forecasts by a decent clip as higher interest rates and weaker commercial development earnings (EBIT) took their toll.

On the upside, investment EBIT offset the C&D miss. Management retained guidance (in line with consensus).

Gearing rose to the middle of the target range during the half, debt costs were stable, weighted average cap rates rose, and hedging rose to 73% from 60% at June 30.

Neutral rating and $2.20 target price retained ahead of an investor conference call this morning.

Target price is $2.20 Current Price is $2.14 Difference: $0.06
If MGR meets the Citi target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $2.47, suggesting upside of 9.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

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) -

Andrew Irvine, who is currently the Group Executive for Business and Private Banking at National Australia Bank, will become CEO after Ross McEwan has announced he will retire in April.

Given Mr McEwan's strong leadership, Morgan Stanley believes the announcement will act as a near-term drag on the bank's share price. 

The rating for National Australia Bank is Equal-weight. Target $30.30. Industry View: In-Line.

Target price is $30.30 Current Price is $32.13 Difference: minus $1.83 (current price is over target).
If NAB meets the Morgan Stanley target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $28.44, suggesting downside of -12.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.3

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

Macquarie rates PLL as Outperform (1) -

The fact that Piedmont Lithium is preserving its cash and value through cost-cutting initiatives and capital spending delays is a positive in Macquarie's view. The constrained balance sheet presents a risk to the additional 27.5% earn-in interest at Ewoyaa project level.

The North American Lithium JV operation with Sayona Mining ((SYA)) saw a strong Dec Q mining performance and solid production, however, total shipments were -13% below the broker due to a delay of a cargo.

Higher sales to Piedmont from North American Lithium are expected in 2024, which should support near-term cash flow generation. A funding solution for Ewoyaa remains a key focus in the near term, in Macquarie's view.

Outperform and 49c target retained.

Target price is $0.49 Current Price is $0.21 Difference: $0.285
If PLL meets the Macquarie target it will return approximately 139% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

Market Sentiment: 1.0

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

Citi rates PLS as Neutral (3) -

Prior to Pilbara Minerals reporting 1H results on February 22, Citi massages its earnings forecasts lower after marking-to-market for lower near-term lithium prices. 

The broker also factors into forecasts yesterday's announcement of an extended offtake agreement with lithium chemical converter Chengxin Lithium.

The Neutral rating and $3.60 target are unchanged.

Target price is $3.60 Current Price is $3.57 Difference: $0.03
If PLS meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $3.68, suggesting upside of 1.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Morgan Stanley rates PLS as Underweight (5) -

Following recent offtake announcements, Morgan Stanley notes tonnes contracted for FY25 now sit at around 54%. Despite this, the broker still urges caution on Pilbara Minerals due to ongoing lithium price weakness and a premium valuation for the company's shares.

Yesterday's offtake announcement is an amendment to an existing offtake agreement with Chengxin Lithium, whereby Pilbara Minerals will supply a further 60kt of spodumene concentrate, taking total 2024 supply to 85kt, explains the broker.

Underweight. Target $3.00. Industry view: Attractive.

Target price is $3.00 Current Price is $3.57 Difference: minus $0.57 (current price is over target).
If PLS 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 $3.68, suggesting upside of 1.5% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Macquarie rates PMT as Outperform (1) -

Patriot Battery Metals has reported assay results from 12 drill holes at CV5, noting strong grades. The strike length of CV5 has now been traced to some 4.4km with assay results for an additional 0.2km of prospective strike length still outstanding.

There could be a material resource upside in the March Q update, Macquarie suggests, due to additional drilling which has been highly successful in extending mineralisation.

Outperform and $2.10 target retained.

Target price is $2.10 Current Price is $0.75 Difference: $1.35
If PMT meets the Macquarie target it will return approximately 180% (excluding dividends, fees and charges).

The company's fiscal year ends in March.

Forecast for FY24:

Forecast for FY25:

This company reports in CAD. 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 PSI as Overweight (1) -

ASX-listed insurance brokers are set to grow earnings, in Morgan Stanley's opinion, despite some moderation in commercial pricing. It's felt they offer strong operating leverage with no balance sheet risk and capital-light business models.

While the broker prefers AUB Group in the space, PSC Insurance also has an Overweight rating given prospects for attractive medium-term growth.

The analysts see positives on various fronts including potential growth by acquisition, best-in-class margins and proven offshore capabilities.

The target slips to $5.85 from $5.90. Industry view:  In-Line. 

Target price is $5.85 Current Price is $4.66 Difference: $1.19
If PSI meets the Morgan Stanley target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $5.73, suggesting upside of 22.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

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

Citi rates PTM as Sell (5) -

Citi highlights funds under management (FUM) for Platinum Asset Management fell by -1.7% during January, as net outflows of -$166m and China exposure impacted.

The find manager's allocation includes a large exposure to the weakening China markets, explains the broker. The Platinum International Fund continues to experience declining FUM, down by -$100m in January.

The investment performance continued to decline in January, which is expected to weigh on future net flows, suggest the analysts.

The $1.00 target and Sell rating are unchanged.

Target price is $1.00 Current Price is $1.15 Difference: minus $0.145 (current price is over target).
If PTM meets the Citi target it will return approximately minus 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.28, suggesting upside of 21.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: -0.5

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

Citi rates REA as Neutral (3) -

At first glance, REA Group's December-half earnings (EBITDA) outpaced consensus forecasts due to a cost beat, and met Citi's estimates. Revenue was in line as was net profit after tax (due to a higher than forecast tax rate).

Highlights included: a beat on Commercial and Developer and Financial Services revenue; stronger than forecast residential listing yield growth; higher rent revenue thanks to price rises; and margin expansions.

Low lights included: a weaker than forecast dividend, a -$120m impairment for PropertyGuru due to a poor outlook; and slowing revenue growth in India. Operating expenditure was also a miss.

Citi's eye will be peeled to costs for the balance of FY24. Neutral rating and $185.80 target price.

Target price is $185.80 Current Price is $184.13 Difference: $1.67
If REA meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $168.69, suggesting downside of -4.6% (ex-dividends)

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

UBS rates REA as Neutral (3) -

At a glance, REA Group's top-line December-half result outpaced UBS's forecasts on revenue, earnings and costs, thanks in part to a beat on national listing volumes. Australian residential listing yields proved a miss due to a timing issue (-3% deferral impact).

Revenue rose across residential, commerical and developer, finance services and Elara.

January National Listings proved the big surprise, up 12% on the previous December half.

Neutral rating and $167 target price.

Target price is $167.00 Current Price is $184.13 Difference: minus $17.13 (current price is over target).
If REA meets the UBS target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $168.69, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.0

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

Ord Minnett rates RED as Buy (1) -

Ord Minnett considers Red 5's proposed merger with Silver Lake Resources ((SLR)) to be sensible given the Red 5's tight balance sheet and Silver Lake Resources' mine life constraints.

Ord Minnett spies an arbitrage opportunity to gain an exposure to the merged entity, which it expects to trade more in line with larger cap peers, over the next five months, before the discount unwinds.

Red 5 will issue 3.434 shares for every outstanding Silver Lake Resources shares, taking to a 51.7% holding, and cancelling (or monetising) the latter's 11.9% stake in Red 5.

Ord Minnet does not yet include the merger in its valuation, awaiting shareholder approval. The broker considers Red 5 to be a better exposure to the merger than Silver Lake Resources.

Buy rating and 37c target price.

Target price is $0.37 Current Price is $0.32 Difference: $0.05
If RED meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

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

ASX-listed insurance brokers are set to grow earnings, in Morgan Stanley's opinion, despite some moderation in commercial pricing. It's felt they offer strong operating leverage with no balance sheet risk and capital-light business models.

While Steadfast Group is the domestic market leader, the current valuation keeps the analysts Equal-weight rated. It's noted the recent ISU Group acquisition could unlock inorganic growth in the US, if management can replicate the Australian business model

AUB Group is the broker's preferred exposure in the space.

Equal-Weight rating. Target price slips to $6.20 from $6.30. Industry view: In-Line. 

Target price is $6.20 Current Price is $5.95 Difference: $0.25
If SDF meets the Morgan Stanley target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $6.30, suggesting upside of 5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.6

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

Macquarie rates STO as Outperform (1) -

Santos' merger talks with Woodside Energy have concluded, likely due principally the share price ratio blowing out over the period, Macquarie suggests. "Sufficient combination benefits were not identified," said Santos.

The broker now expects Santos to accelerate restructuring initiatives, which had been previously flagged, and reinstate a buyback program.

The broker retains Outperform, seeing considerable unrecognised value in Santos' assets, and expecting this to be better recognised over time. Target unchanged at $9.95.

Target price is $9.95 Current Price is $7.41 Difference: $2.54
If STO meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $9.44, suggesting upside of 28.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Citi rates TCL as Buy (1) -

At first glance, Transurban Group's December-half result missed consensus' and Citi's traffic and revenue forecasts with an increase in average traffic falling short of higher expectations.

On the upside, earnings (EBITDA) were only a touch shy of forecasts due to lower than expected costs.

Dividend guidance was retained (also a miss on forecasts). Balance sheet fundamentals improved and the broker considers Transurban to be well placed to pursue committed project capital expenditure.

Buy rating and $15.90 target price retained for now, although the broker expects initial share price weakness ahead of the company's investor call.

Target price is $15.90 Current Price is $13.32 Difference: $2.58
If TCL meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $14.02, suggesting upside of 6.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

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

Citi rates VUK as Buy (1) -

Virgin Money UK's quarterly updates don't provide all nitty gritty details but Citi analysts have been pleased to note higher-margin products are growing faster than the contraction in mortgages and deposit balances are ahead.

The net interest margin is stable, in line with expectations at 1.89%. And management has left FY24 guidance unchanged.

Overall, opines the broker, it was an uneventful market update. Cost messaging by management did not suggest any disasters are on the horizon either.

Citi analysts believe market consensus will be comfortable, with little in the way of adjustments expected. Buy/High Risk retained. Target is GBP1.80.

Forecasts have noticeably been lowered over the past months.

Current Price is $3.08. Target price not assessed.

Current consensus price target is $3.85, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in GBP. 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 VUK as Accumulate (2) -

Virgin Money UK's December-quarter trading update met Ord Minnett's forecasts, the company reporting flat net interest margins and a steady loan book. Rising personal lending offset a decline in mortgages (which suffered from rising competition from the majors).

The broker says that while bad debts remain a temporary risk, the company's balance sheet is strong enough to carry it through. 

Ord Minnett expects net interest margins will continue to ease and spies little room for cost savings.

Accumulate rating and $4 target price retained.

Target price is $4.00 Current Price is $3.08 Difference: $0.92
If VUK meets the Ord Minnett target it will return approximately 30% (excluding dividends, fees and charges).

Current consensus price target is $3.85, suggesting upside of 24.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

This company reports in GBP. 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

Macquarie rates WDS as Neutral (3) -

Woodside Energy has withdrawn from Santos merger talks, principally due to less favourable scrip ratio terms and the premium required, Macquarie suggests.

Start-up at Sangomar is now a key near-term event, the broker notes, and Scarborough project progress has now significantly improved with drilling underway.

Value has emerged, but so have several key headwinds, including declining legacy free cash flow, weaker gas prices, and LNG capacity starts, keeping the broker on Neutral. Target unchaged at $31.

Target price is $31.00 Current Price is $32.46 Difference: minus $1.46 (current price is over target).
If WDS 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 $35.53, suggesting upside of 9.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY23:

Forecast for FY24:

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

Citi rates WTC as Neutral (3) -

Recent data highlight air and ocean freight volumes are now up year-on-year, notes Citi. It's thought industry volume growth will likely provide a tailwind to Wisetech’s 2H revenue growth.

De-stocking and a soft macroeconomic backdrop was a 1H headwind, explain the analysts.

New products are the key for organic growth acceleration, in the broker's view, with Citi's 2H forecasts assuming around 32% year-on-year growth, driven by new product releases.

The broker notes Red Sea shipping issues will likely have little impact, either positively or negatively, on WiseTech's earnings.

The Neutral rating and target of $71.75 are retained.

Target price is $71.75 Current Price is $73.77 Difference: minus $2.02 (current price is over target).
If WTC meets the Citi target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $76.39, suggesting upside of 0.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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