Australian Broker Call

Macquarie rates AIZ as Outperform (1) -

Macquarie observes the airline is actively offsetting headwinds from fuel, increasing prices by 3-5% across most of the network. The broker suggests the market has become too negative on FY19 given the capacity growth and pricing increases.

Outperform rating maintained. Target is NZ$3.80.

Current Price is $2.90. Target price not assessed.

Current consensus price target is N/A

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

This company reports in NZD. 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 CGR as Add (1) -

The company has upgraded FY18 underlying operating earnings guidance to "in excess of $17m". Morgans suggests the drivers are in place for strong growth into FY19-20.

The broker acknowledges the share price has appreciated strongly over the past year but continues to envisage solid returns. Add rating maintained. Target is raised to $0.69 from $0.63.

Target price is $0.69 Current Price is $0.60 Difference: $0.09
If CGR meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Morgans rates FDV as Add (1) -

The company has indicated that five of its 15 portfolio companies were close to breaking even in the June quarter because of rapid growth in revenue. The June quarter is normally the weakest of the four.

Morgans retains a positive view on the stock as it offers exposure to growth in online advertising in newly emerging economies with large populations.

Because of the greater number of shares on issue since the recent capital raising the broker reduces the valuation and target to $0.95 from $0.97. Add maintained.

Target price is $0.95 Current Price is $0.67 Difference: $0.28
If FDV meets the Morgans target it will return approximately 42% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

Macquarie rates GOR as Outperform (1) -

Gold Road has updated on its exploration at Yamarna and its tenements in the Gruyere joint venture. Smokebush Camp has extended the strike of mineralisation at Yarmarna to more than 1.3km and remains open along strike.

Macquarie observes the company is working hard to maintain the momentum of its exploration agenda. Outperform rating and $0.95 target maintained.

Target price is $0.95 Current Price is $0.74 Difference: $0.21
If GOR meets the Macquarie target it will return approximately 28% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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

UBS rates GTY as Downgrade to Neutral from Buy (3) -

Hometown has come back with a $2.30 ($2.35 pre-dividend) bid for Gateway, gazumping Brookfield's bid which gazumped Hometown's initial bid. Hometown now holds 18.2% of the company, UBS notes.

UBS does not rule out another counter from Brookfield, or someone else, but believes an even higher price is pushing into overvalued territory. Hence a downgrade to Neutral from Buy, given the share price is aligned with the latest bid. Target rises to $2.30 from $2.10.

Target price is $2.30 Current Price is $2.30 Difference: $0
If GTY meets the UBS target it will return approximately 0% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Credit Suisse rates IGO as Underperform (5) -

Production in the June quarter at Nova was in line with Credit Suisse expectations. A stronger quarter had been expected at Tropicana after a soft March quarter.

The FY19 budget signals to Credit Suisse a desire to discover more nickel and invest material capital to improve nickel payability.

Credit Suisse retains its Underperform rating. Target price is $4.20.

Target price is $4.20 Current Price is $4.99 Difference: minus $0.79 (current price is over target).
If IGO meets the Credit Suisse target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.84, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Macquarie rates IGO as Underperform (5) -

June quarter production at Nova was weak and Macquarie expects the mine will miss FY18 guidance on cash costs as a result. Tropicana also disappointed the broker.

Incorporating these results translates to a -20% reduction to the broker's FY18 earnings estimates. No changes are made for FY19 and beyond. Target is reduced to $5.00 from $5.10. Underperformed maintained.

Target price is $5.00 Current Price is $4.99 Difference: $0.01
If IGO meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

UBS rates IGO as Neutral (3) -

Independence Group's Nova mine missed June quarter production guidance due to a processing issue that will be sorted during a scheduled maintenance outage. Nova missed in March, too, but the broker always saw guidance as optimistic and has a forecast at the lower end of the range.

The broker is very keen on the nickel story, based on the EV growth story, but retains Neutral on valuation. Target unchanged at $5.20.

Target price is $5.20 Current Price is $4.99 Difference: $0.21
If IGO meets the UBS target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $4.84, suggesting downside of -3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: -0.2

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

Morgans rates IPH as Add (1) -

Based on analysis of the company's filings, Morgans calculates growth of 1.4% in the patent filings market in the second half. IPH strongly outperformed the market, with growth of 5.1%.

The broker increases operating earnings forecasts for FY18 by 1.0% and FY19 by 5.5%. Add rating maintained. Target is raised to $5.13 from $4.82.

Target price is $5.13 Current Price is $4.78 Difference: $0.35
If IPH meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $4.46, suggesting downside of -6.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Credit Suisse rates MFG as Outperform (1) -

Credit Suisse observes the stock is trading at one of its cheapest points and reiterates an Outperform rating. Net inflows continue, with $880m attracted in the second half, predominantly driven out of the institutional channel.

This highlights, in the broker's view, the capacity reserved for existing investors, despite the soft close of some products at the end of 2017. Target is $28.

Target price is $28.00 Current Price is $23.98 Difference: $4.02
If MFG meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $26.40, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Morgan Stanley rates MFG as Underweight (5) -

Funds under management at the end of June were $69.5bn, with retail experiencing -$56m in outflows and institutional $1.3bn in inflows over the second half.

June flows were stronger than Morgan Stanley expected for both retail and institutional business. Underweight maintained. Target is $20. Industry view: In-Line.

Target price is $20.00 Current Price is $23.98 Difference: minus $3.98 (current price is over target).
If MFG meets the Morgan Stanley target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $26.40, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

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

The company reported funds under management of $69.51bn, up 3.2% in June. Flows weakened over the second half, as expected. Morgans believes the balance sheet and the acquisition of Airlie provide options for growth.

Airlie is expected to raise retail funds in the near term which can add some growth, although Morgans believes the US low-carbon strategies need to attract meaningful flows, or further acquisitions may be required.

Rating is downgraded to Hold from Add. Target is reduced to $26.05 from $28.30.

Target price is $26.05 Current Price is $23.98 Difference: $2.07
If MFG meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $26.40, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

UBS rates MFG as Buy (1) -

Magellan recorded positive flows in the June quarter, led by institutional but with retail flows stabilising, the broker notes. Stronger markets, alongside the Airlie acquisition, provided support, and suggest performance fees above the broker's earlier estimate.

The stock is trading at its lowest forward PE on record and hence the broker finds value compelling, despite the business maturing. Buy and $28 target retained.

Target price is $28.00 Current Price is $23.98 Difference: $4.02
If MFG meets the UBS target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $26.40, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.3

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

Citi rates MHJ as Neutral (3) -

The June quarter trading update featured a decline in implied like-for-like sales growth across all regions. Citi suspects this was caused by the distractions associated with the closure of the US business and Emma & Roe as well as a new promotional strategy.

The weak consumer environment in Australia and competition in Canada may also be affecting sales. The broker envisages a need to improve execution before the stock can be recommended. Neutral maintained. Target is reduced to $0.92 from $1.00.

Target price is $0.92 Current Price is $0.97 Difference: minus $0.05 (current price is over target).
If MHJ meets the Citi target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.09, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Morgans rates MHJ as Hold (3) -

FY18 sales growth was 3.3%. A full exit from Emma & Roe is positive, Morgans believes, in terms of the removal of losses and the ability to fully focus on the core.

The broker remains cautious, nonetheless, given a deteriorating sales performance in the fourth quarter and the requirement for investment in the near to medium term. Hold rating maintained. Target is reduced to $1.04 from $1.16.

Target price is $1.04 Current Price is $0.97 Difference: $0.07
If MHJ meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $1.09, suggesting upside of 12.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.5

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

Deutsche Bank rates NXT as Downgrade to Sell from Hold (5) -

Deutsche Bank has downgraded to Sell from Hold, arguing the market is ignoring the risks that are attached to the company's significant expansion. The broker also points at the valuation premium vis-a-vis offshore peers.

The current significant increase in capex will weigh on NextDC's free cash flow generation, point out the analysts. Their negative stance is centred around the prediction that greater demand driven by hyperscale service providers is likely to lead to a deterioration in pricing. Target $6.50 (was $7.10).

Target price is $6.50 Current Price is $7.01 Difference: minus $0.51 (current price is over target).
If NXT meets the Deutsche Bank target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $7.95, suggesting upside of 13.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 0.4

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

Morgans - Cessation of coverage

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

Macquarie rates URW as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage of Unibail-Rodamco-Westfield with an Outperform rating and $18.39 target.

The business has EUR62bn in assets under management and its largest regions comprise France and the US, post the acquisition of Westfield. Macquarie believes the business is well-placed to handle the structural and macro headwinds.

Target price is $18.39 Current Price is $14.88 Difference: $3.51
If URW meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY18:

Forecast for FY19:

Market Sentiment: 1.0

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