Australian Broker Call

Credit Suisse rates APM as Outperform (1) -

Credit Suisse notes APM Human Services International has gained sizeable market share from contracts awarded for Workforce Australia, with the company winning 44 contracts across 27 regions and being appointed to sub-panels in all 51 regions.

With the transition away from jobactive, expected to account for 10-15% of company revenue in FY22, the broker notes the strong outcome should offset lower caseloads involved with Workforce Australia given easier to place candidates are directed to an online platform.

The Outperform rating and target price of $4.20 are retained.

Target price is $4.20 Current Price is $3.04 Difference: $1.16
If APM meets the Credit Suisse target it will return approximately 38% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

UBS rates APM as Buy (1) -

UBS feels the successful retendering by APM Human Services International for the Workforce Australia contract is strategically important as it materially de-risks the company's most profitable contract.

In addition, the company has gained market share which shows the government likes to reward strong performers, points out the analyst.

The company was awarded 44 Workforce Australia contracts across 27 Employment Regions in Australia and appointed to the sub-panel across all 51 Employment Regions. The target rises to $3.50 from $3.30. Buy.

Target price is $3.50 Current Price is $3.04 Difference: $0.46
If APM meets the UBS target it will return approximately 15% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 1.0

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

Macquarie rates GOR as Upgrade to Neutral from Underperform (3) -

As a result of recent share price weakness and the release of FY21 results, Macquarie upgrades its rating for Gold Road Resources to Neutral from Underperform, while retaining its $1.70 target price.

Profit was a $7.6m beat versus the broker's estimate mainly due to a positive move in inventory. The final fully-franked dividend of 0.5cps was also higher than Macquarie expected.

Target price is $1.70 Current Price is $1.62 Difference: $0.08
If GOR meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

UBS rates GOR as Buy (1) -

Production growth of around 60% by 2024 for the Gruyere mine places Gold Road Resources at a relative advantage to peers, according to UBS. The industry as a whole faces continued covid and cost pressures (labour and oil etc), points out the analyst.

Following FY21 results and allowing for a lift in the gold price outlook by the UBS strategy team, the broker maintains its Buy rating and eases its target price to $2 from $2.05.

FY21 profit was a slight miss versus the broker's estimate. Management's 2022 guidance for Gruyere remains unchanged.

Target price is $2.00 Current Price is $1.62 Difference: $0.38
If GOR meets the UBS target it will return approximately 23% (excluding dividends, fees and charges).

Current consensus price target is $1.77, suggesting upside of 6.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Morgan Stanley rates IPL as Overweight (1) -

Morgan Stanley notes Incitec Pivot is ideally positioned to benefit from the current fertiliser price boom.

CRU Group's price index, which provides a reference for Incitec Pivot's pricing, has increased contract Tampa ammonia pricing to US$1625 per tonne from US$490 per tonne for April, up 63% on the broker's second half forecast.

The company highlighted the elevated price implied a $550m boost to full year earnings. Morgan Stanley believes current spot pricing for all commodity inputs implies a circa 60% upgrade to its FY22 EBIT forecast to $2.4bn.

The Overweight rating and target price of $4.70 are retained. Industry view: In-Line.

Target price is $4.70 Current Price is $3.95 Difference: $0.75
If IPL meets the Morgan Stanley target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $3.95, suggesting downside of -1.3% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.8

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

Macquarie rates MIN as Outperform (1) -

Macquarie upgrades its base-case valuation for Lockyer Deep, situated in the Perth basin, to $420m from $300m reflecting recent strong testing results. Lockyer Deep is a joint venture with Northwest Energy ((NWE)) and gas is not expected for two years.

The analyst notes upside risk to the gas resource estimate from the testing results and strong flow rate. The Outperform rating and $77 target are unchanged.

The company may become self-sufficient in its gas needs, which helps de-risk the company's decarbonising plans at its mining operations in Western Australia, points out the broker.

Target price is $77.00 Current Price is $49.21 Difference: $27.79
If MIN meets the Macquarie target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $58.09, suggesting upside of 16.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.6

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

Credit Suisse rates MTS as Outperform (1) -

While market-wide factors are assumed to drive a decline to FY23 earnings forecasts for Metcash, Credit Suisse notes headwinds will also be felt by competitors and maintains a growth outlook for the company.

Credit Suisse predicts exposure to the high-growth Hardware sector will generate sufficient company-specific earnings to help offset industry pressure.

The broker expects market-wide factors to have a cumulative earnings impact of -$12m by FY25, while company-specific factors should deliver a $22-56m benefit.

The Outperform rating is retained and the target price increases to $4.70 from $4.55.

Target price is $4.70 Current Price is $4.49 Difference: $0.21
If MTS meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges).

Current consensus price target is $4.68, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.7

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

Macquarie rates PRU as Neutral (3) -

Perseus Mining's updated life-of-mine-plan for Sissingue contains higher near-term production though at higher all-in sustaining costs than Macquarie's prior forecasts.

The broker reduces FY23 and FY24 EPS estimates -6% and -4% respectively, with a 6% lift in FY25. The $2 target and Neutral rating are retained.

Target price is $2.00 Current Price is $1.93 Difference: $0.07
If PRU meets the Macquarie target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.00, suggesting upside of 2.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Citi rates QUB as Buy (1) -

In an agreement with the Federal government, Qube Holdings now has an option to purchase 200 hectares of the Beveridge site at a future date.

The inland rail is expected to commence full operations by 2027 and Beveridge may be used as a development site for a rail freight terminal.

Citi feels this allows the company exposure to future upside from any development, while also affording time for greater certainty to emerge. The Buy rating and $3.58 target are retained.

Target price is $3.58 Current Price is $3.10 Difference: $0.48
If QUB meets the Citi target it will return approximately 15% (excluding dividends, fees and charges).

Current consensus price target is $3.32, suggesting upside of 6.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.5

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

Morgan Stanley rates RIO as Overweight (1) -

Reuters has reported the Guinean government has reached an agreement with Rio Tinto and SMB-Winning to resume the Simandou iron ore project, but Morgan Stanley notes the company is yet to provide commentary.

While Rio Tinto has guided to its Simandou holding producing 100m tonnes per annum, a starting run-rate could be closer to 40m tonnes per annum. The Guinean government expects first ore in 2025, but Morgan Stanley expects 2028 is more realistic.

The Simandou value is not included in the broker's base case for Rio Tinto.

The Overweight rating and target price of $130.50 are retained. Industry view: Attractive.

Target price is $130.50 Current Price is $118.47 Difference: $12.03
If RIO meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $119.50, suggesting upside of 2.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.4

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

Citi rates SBM as Neutral (3) -

St. Barbara feels the recent covid outbreak is now under control and revises FY22 Simberi guidance to 25-30koz at an all-in sustaining cost (AISC) of $3200-3600/oz.

Both Citi's forecast and the consensus estimate was for 38koz at US$1886. Hence, the broker revises down its estimated FY22 Simberi production to 27koz at $3312/oz. The Neutral rating and $1.70 target are maintained.

Target price is $1.70 Current Price is $1.47 Difference: $0.23
If SBM meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $1.50, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Macquarie rates SBM as No Rating (-1) -

St. Barbara expects a slower ramp-up at Simberi from recent covid disruption and lack of access to an expatriate work force. The company has reinstated guidance at 25-30koz at $3,200-3,600/oz.

As a result, Macquarie reduces its estimated output at Simberi and lifts the all-in sustaining costs (AISC) at the mine. The broker's FY22 EPS forecast falls by -76%.

The broker is currently on research restriction.

Current Price is $1.47. Target price not assessed.

Current consensus price target is $1.50, suggesting upside of 3.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.0

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

Credit Suisse rates SYR as Neutral (3) -

While Syrah Resources continues to suffer shipping constraints at Nacala, shipments through Pemba may offer compensation. Credit Suisse notes the company has loaded its first shipment via Pemba and confirmed plans for further shipments through 2022.

The broker further noted following Nacala recovery the addition of Pemba could see an additional 210,000 tonnes in shipments in 2022. While near-term cash burn, estimated at US$15m monthly, may linger, the broker notes a $250m equity raising provides a buffer.

The Neutral rating is retained and the target price decreases to $1.65 from $1.75.

Target price is $1.65 Current Price is $1.55 Difference: $0.1
If SYR meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.0

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

Morgan Stanley rates VCX as Underweight (5) -

Morgan Stanley's recent modeling indicates that even if the temporary covid impacts cease today, Vicinity Centres's FFO may still be -12-14% below pre-covid levels.

The broker finds limited upside risk to its forecast for Vicinity Centres, despite retail offering good exposure to reopening trade, given higher interest rates, lasting impacts of the online retail shift, and likely higher capital expenditure in its future.

The Underweight rating and target price of $1.82 are retained. Industry view: In-Line.

Target price is $1.82 Current Price is $1.87 Difference: minus $0.05 (current price is over target).
If VCX meets the Morgan Stanley target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $1.93, suggesting upside of 3.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.2

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