Australian Broker Call

Macquarie rates AFG as Outperform (1) -

Macquarie estimates the recent issuance of residential and commercial mortgage-backed securities (RMBS) will support lower funding costs and help negate pressure on the net interest margin from competitors.

With no changes to earnings forecasts or the $2.94 target price, the broker retains its Outperform rating.

Target price is $2.94 Current Price is $2.05 Difference: $0.89
If AFG meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges).

Current consensus price target is $2.88, suggesting upside of 36.5% (ex-dividends)

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 AKE as Buy (1) -

Realised spodumene and carbonate prices, revealed at Allkem's strategy day, were better than UBS had expected. The target rises to $15.10 from $13.80 after the analyst incorporated higher forecasts for near-term prices, higher Sal de Vida volumes, and higher capex.

The broker also allows for delayed starts at Sal de Vida, James Bay and Naraha in arriving at the target.

Management plans to be the number three global lithium supplier by obtaining an around 10% market share. Buy.

Target price is $15.10 Current Price is $12.81 Difference: $2.29
If AKE meets the UBS target it will return approximately 18% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Citi rates ALL as Buy (1) -

Citi reinitiates on Aristocrat Leisure, noting the company is a market leader in the social casino segment and offers exposure to continuing mobile game growth. The broker also expects acquisitional growth into the US$15m iGaming market to be likely following legalisation.

According to the broker the core social casino business offers a solid foothold for 16% compound annual earnings growth through to FY24, while hit titles outside of the social casino segment could offer further upside. 

The broker reinitiates with a Buy rating and a target price of $44.00

Target price is $44.00 Current Price is $33.41 Difference: $10.59
If ALL meets the Citi target it will return approximately 32% (excluding dividends, fees and charges).

Current consensus price target is $46.58, suggesting upside of 39.5% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.9

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

Credit Suisse rates APE as Neutral (3) -

The apparent global slowing of car sales for auto manufacturers in the first quarter of 2022 puts a shadow over Eagers Automotive's outlook for Credit Suisse, despite Australian sales looking broadly flat in the quarter. 

The broker expects Eagers Automotive to deliver profit similar to the $98m achieved in the first quarter of 2021, noting data from overseas manufacturers shouldn't be ignored but demand will likely outstrip supply for at least 18 months and sustain earnings margins in that time. 

The Neutral rating and target price of $14.60 are retained.

Target price is $14.60 Current Price is $13.41 Difference: $1.19
If APE meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $17.32, suggesting upside of 29.7% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates ASX as Underweight (5) -

Morgan Stanley is anticipating ASX to benefit from a trading volumes increase from FY23, driven by speculation around the rate path outlook. 

Rate future volumes fell -11% year-on-year in March, while options, up 32% year-on-year in the month, and electricity derivatives, up 63% year-on-year, continue to grow but the broker expects further potential is ahead. 

The Underweight rating and target price of $74.00 are retained. Industry view: Attractive.

Target price is $74.00 Current Price is $82.00 Difference: minus $8 (current price is over target).
If ASX meets the Morgan Stanley target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $81.62, suggesting downside of -1.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

Credit Suisse rates BOQ as Outperform (1) -

Ahead of Bank of Queensland's first half result release in the coming week, Credit Suisse reiterates its $252m cash earnings estimate, 7% ahead of consensus, and a 27 cent per share dividend estimate, 14% ahead of consensus.

The broker is anticipating balance sheet momentum and total loan growth in line with system, but above system housing growth, as well as a decline to net interest margins and higher expenses. 

The Outperform rating and target price of $11.40 are retained.

Target price is $11.40 Current Price is $8.42 Difference: $2.98
If BOQ meets the Credit Suisse target it will return approximately 35% (excluding dividends, fees and charges).

Current consensus price target is $10.17, suggesting upside of 21.0% (ex-dividends)

The company's fiscal year ends in August.

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 CHC as Outperform (1) -

After reviewing soft 1Q leasing data courtesy of  JLL Australia, and reviewing potential impacts from work from home, Macquarie assesses Charter Hall is a key pick in the office space. The Outperform rating and $23.10 target are retained.

While the work from home outlook is important, the broker points out underlying cyclicality of leasing markets movements in net
supply are of greater import.

Target price is $23.10 Current Price is $16.39 Difference: $6.71
If CHC meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges).

Current consensus price target is $21.76, suggesting upside of 33.5% (ex-dividends)

The company's fiscal year ends in June.

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

Ord Minnett rates CSL as Accumulate (2) -

Despite low US unemployment, which leads to staffing and donor challenges for CSL, Ord Minnett maintains its Accumulate rating and $295 target price. This follows a review of recent plasma collection data by the analyst showing collection volumes slowly edging up.

The company remains the broker's key preference in the Healthcare sector.

Target price is $295.00 Current Price is $266.58 Difference: $28.42
If CSL meets the Ord Minnett target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $317.42, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 0.9

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

Macquarie rates DXS as Outperform (1) -

After reviewing soft 1Q leasing data courtesy of  JLL Australia, and reviewing potential impacts from work from home, Macquarie feels Dexus is a key pick in the office space. The Outperform rating and $12.39 target are retained.

While the work from home outlook is important, the broker points out underlying cyclicality of leasing markets movements in net
supply are of greater import.

Target price is $12.39 Current Price is $10.83 Difference: $1.56
If DXS meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $12.02, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in June.

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 GOR as Outperform (1) -

Gold Road Resources' 1Q production update revealed a production beat at Gruyere of 8% compared to Macquarie's prior estimate. Sales were 7% better than expected and realised pricing was a 2% beat.

While the broker lifts its 2022 EPS forecast by 2%, the $1.80 target price is unchanged. Outperform.

Target price is $1.80 Current Price is $1.50 Difference: $0.3
If GOR meets the Macquarie target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $1.80, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in December.

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 GOR as Buy (1) -

While FY22 production guidance for Gold Road Resources was maintained, March quarter production at Gruyere was an -8% miss versus the forecast by UBS.

In reviewing the off-market takeover offer for DGO Gold ((DGO)), the broker reiterates the scarcity and value the Mallina project presents. A successful takeover would give Gold Road Resources a say in the future of De Grey Mining ((DEG)), which owns Mallina.

The Buy rating and $2.00 target are maintained.

Target price is $2.00 Current Price is $1.50 Difference: $0.5
If GOR meets the UBS target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $1.80, suggesting upside of 14.6% (ex-dividends)

The company's fiscal year ends in December.

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 GPT as Outperform (1) -

After reviewing soft 1Q leasing data courtesy of  JLL Australia, and reviewing potential impacts from work from home, Macquarie assesses GPT Group is a key pick in the office space. The Outperform rating and $5.47 target are retained.

While the work from home outlook is important, the broker points out underlying cyclicality of leasing markets movements in net
supply are of greater import.

Target price is $5.47 Current Price is $5.16 Difference: $0.31
If GPT meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $5.48, suggesting upside of 7.0% (ex-dividends)

The company's fiscal year ends in December.

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

UBS rates IGO as Sell (5) -

UBS initiates coverage on IGO with a Sell rating and $12.65 target price. Shares are estimated to be trading at an around 15% premium to a discounted cash flow valuation.

Nonetheless, the analyst sees the company as the preferred battery raw material play, and notes the Nova operation and the 25% stake in Greenbushes are generating significant earnings at present spot nickel and spodumene prices.

The broker has upgraded near term spodumene prices again, and, while remaining bullish on the outlook for lithium and nickel, believes current prices are unsustainable. UBS feels a higher bid price for Western Area ((WSA)) will likely lead to a successful outcome.

Target price is $12.65 Current Price is $13.91 Difference: minus $1.26 (current price is over target).
If IGO 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 $13.33, suggesting downside of -2.6% (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 ILU as Outperform (1) -

The board of Iluka Resources has announced approval of Eneabba Rare Earths Refinery phase 3, and the final investment decision. 

Macquarie estimates material production upside from the refinery and raises its target price by 8% to $14.00 on a valuation upgrade for Eneabba. Outperform.

The broker believes the Eneabba project has been significantly de-risked following a risk-sharing agreement, including a non-recourse loan, with the Australian government.

Target price is $14.00 Current Price is $12.10 Difference: $1.9
If ILU meets the Macquarie target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $11.45, suggesting downside of -7.4% (ex-dividends)

The company's fiscal year ends in December.

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

Credit Suisse rates MFG as Neutral (3) -

While the -$1.3bn in outflows reported by Magellan Financial in the final three weeks of March proved lower than Credit Suisse's estimate, the broker notes it was the lowest outflow rate reported by the company in the last 2-3 months. 

Institutional flows were a key driver of the improvement, moderating to only -$0.8bn in outflows, but deeper retail outflows weighed. The broker does not expect the improvement to be a trend and expects further large outflows and weak fund performance ahead.

The Neutral rating and target price of $14.40 are retained.

Target price is $14.40 Current Price is $17.23 Difference: minus $2.83 (current price is over target).
If MFG 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 $13.80, suggesting downside of -18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

Macquarie rates MFG as Underperform (5) -

Following Magellan Financial's March quarter funds under management (FUM) update, Macquarie notes the rate of outflows has slowed in recent weeks. Nonetheless, outflows are expected well into FY23 as the investment performance still trails benchmarks.

To reflect forecast earnings adjustments and a recent sector re-rating by the broker, the target rises to $13.25 from $12.40. Underperform.

Target price is $13.25 Current Price is $17.23 Difference: minus $3.98 (current price is over target).
If MFG meets the Macquarie target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.80, suggesting downside of -18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

Ord Minnett rates MFG as Lighten (4) -

In an update for funds under management (FUM), Magellan Financial revealed a sharp slowing in fund outflows (particularly in the institutional business), assesses Ord Minnett.

Given a very short snapshot of performance (25 February to 11 March), the broker is cautious on calling a trend and retains its Lighten rating. The target price rises to $13.40 from $13.

Target price is $13.40 Current Price is $17.23 Difference: minus $3.83 (current price is over target).
If MFG meets the Ord Minnett target it will return approximately minus 22% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.80, suggesting downside of -18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

UBS rates MFG as Sell (5) -

A 3Q funds under management (FUM) update by Magellan Financial revealed growth of 1.3% since its last update on March 11, providing relief from recent sharp declines, notes UBS.

Nonetheless, the analyst points out the net outflow for the quarter was in-line with market expectations and points to a raft of metrics indicating fundamentals remain poor.

In the absence of a sustained turnaround, the broker's Sell rating is kept. The target slips to $13 from $13.50.

Target price is $13.00 Current Price is $17.23 Difference: minus $4.23 (current price is over target).
If MFG meets the UBS target it will return approximately minus 25% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $13.80, suggesting downside of -18.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.7

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

Macquarie rates MIN as Outperform (1) -

Macquarie assesses the restart of train 2 at Wodgina and the earlier restart of train 1 are positive for Mineral Resources.

This comes as management announced the company and joint venture partners have agreed to increase spodumene production from the Mt Marion and Wodgina operations.

The broker's medium-term earnings forecasts lift due to higher spodumene production from Mt Marion and Wodgina, resulting in a target price of $83, up from $77. Outperform. The earnings outlook increases by more than 15% for FY25 and beyond.

Target price is $83.00 Current Price is $60.01 Difference: $22.99
If MIN meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges).

Current consensus price target is $64.29, suggesting upside of 4.9% (ex-dividends)

The company's fiscal year ends in June.

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 NGI as Outperform (1) -

Macquarie adjusts its EPS forecasts for FY22-24 by 0%, 1.4% and 15.8% following an EPS accretive strategic investment in real estate  investor Marble Capital for -$100m.

After also allowing for a fully underwritten $47m placement and a $10m shareholder purchase plan, the broker raises its target to $2.35 from $2.14. Outperform.

Target price is $2.35 Current Price is $1.75 Difference: $0.6
If NGI meets the Macquarie target it will return approximately 34% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

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

Market Sentiment: 1.0

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

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

Morgans lowers its rating for Origin Energy to Hold from Add due to the rising potential negative exposure in the electricity market and after the share price moved past the broker's target price.

The Eraring plant is important for management to manage its average pool price exposure, according to the analyst. Should there be a need to buy financial contracts to manage this physical exposure, earnings this half and next financial year could be suppressed.

The target price falls to $6.42 from $6.44.

Target price is $6.42 Current Price is $6.54 Difference: minus $0.12 (current price is over target).
If ORG meets the Morgans target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $6.33, suggesting downside of -3.3% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: 0.3

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

Credit Suisse rates PTM as Neutral (3) -

Larger than expected outflows of -$222m in March saw Platinum Asset Management report an -8% month-on-month funds under management decline to $19.4bn. Credit Suisse notes the retail channel contributed -$175m to outflows and institutional -$45m.

With few signs of improvement ahead, Credit Suisse downgrades earnings per share forecasts -3-5% through to FY24.

The rating is downgraded to Underperform from Neutral and the target price decreases to $1.90 from $2.20.

Target price is $1.90 Current Price is $2.23 Difference: minus $0.33 (current price is over target).
If PTM meets the Credit Suisse target it will return approximately minus 15% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.27, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

Ord Minnett rates PTM as Hold (3) -

Ord Minnett lowers its target price for Platinum Asset Management to $2.15 from $2.60. This comes after incorporating a weaker-than-expected funds under management (FUM) figure at March 31 (mainly due to weak markets) and reduced expectations for flows.

The broker remains cautious around the fund manager's poor investment performance and maintains its Hold rating.

Target price is $2.15 Current Price is $2.23 Difference: minus $0.08 (current price is over target).
If PTM meets the Ord Minnett target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.27, suggesting upside of 19.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY22:

Forecast for FY23:

Market Sentiment: -0.4

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

Ord Minnett rates TPG as Buy (1) -

Ord Minnett now expects TPG Telecom to expand its wholesale business to a greater number of fibre-to-the-basement apartment buildings, without impacts upon the retail business. 

This follows ACCC approval for the proposed functional separation of the company's wholesale and retail businesses. The Buy rating and $7.25 target price are unchanged.

Should management's target of up to 500,000 apartment premises be achieved, the analyst estimates additional annual operating earnings (EBITDA) of $145m.

Target price is $7.25 Current Price is $6.11 Difference: $1.14
If TPG meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $6.87, suggesting upside of 10.1% (ex-dividends)

The company's fiscal year ends in December.

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

Macquarie rates VUK as Neutral (3) -

Macquarie sees short term value in Virgin Money UK though is cognisant of longer-term risks. Falling mortgage spreads are expected to offset any margin benefits from high positive leverage to rising bond yields.

The broker forecasts structural hedge benefits in FY22 and FY23 though lowers its target to $3.95 from $4.35 mainly due to adjustments to the forecast foreign exchange rate.

Target price is $3.95 Current Price is $2.89 Difference: $1.06
If VUK meets the Macquarie target it will return approximately 37% (excluding dividends, fees and charges).

The company's fiscal year ends in September.

Forecast for FY22:

Forecast for FY23:

This company reports in GBP. 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